What Does Progress' Takeover Mean for Iona’s Open Source Strategy?

Includes: IONA, PRGS
by: Dennis Byron

Carnac the Magnificent has answered the question in the last envelope in the independent middleware market: Progress Software (NASDAQ:PRGS) will acquire Iona (IONA). My prediction that it would most likely be another so-called closed source software provider pairing up with an open source provider turned out to be correct. My prediction that it would be IBM (NYSE:IBM), Sun (JAVA), TIBCO (NASDAQ:TIBX), Novell (NASDAQ:NOVL), a Telco or a packaged app supplier (as in Workday acquiring Iona spinout Cape Clear)? Not so good.

Effectively this means little to the independent middleware market which had already collapsed in upon itself when BEA was folded into Oracle (NASDAQ:ORCL). Some might still count Axway but it is really a spinout from Sopra [Euronext Paris: SOP] and Sopra is acquiring Tumbleweed (TMWD) via Axway so it doesn’t meet my admittedly arbitrary definition of independent from two perspectives. Other than being the last man standing.

Iona had ceased to be a major factor in the market early this decade, struggling to turn it around from a plateau one-third the size of its 2001 peak of $180 million in revenue. Iona has some loyal customers among the telcos and financial services firms that Progress will appreciate.

The question is “what does this mean for Iona’s open source strategy?” I don’t see any mention of open source in a quick reading of the non-transaction-boilerplate part of the press release. If Iona was last man standing in the independent middleware market, Progress can be thought of as last man standing in the closed-source culture (which is why I didn’t list them in my earlier prediction). One way Iona was trying to get things going again as an independent was through its embrace of the open source culture, development model and terms and conditions.  Not coincidentally, all three are particularly important in telcos and among financial services providers.

Progress says, “IONA would become an indirect wholly owned subsidiary of Progress Software” but that is the way Progress has treated other acquisitions this decade for marketing reasons (which I have never really understood) and isn’t really a viable strategic position for so small a company as Iona. After making the “wholly owned” statement in the press release, Progress goes on to say,

 “The combination of Progress Software and IONA creates the industry choice for truly independent, heterogeneous Service Oriented Architecture [SOA] infrastructure. IONA products complement the Progress SOA Portfolio with leading edge, best-in-class technology now with the widest variety of heterogeneous deployment options and interoperability.”

That doesn’t sound too independent of a position to me. It just sounds like Progress wants to add another middleware choice to its Apama/DataDirect/Sonic line-up along with the classic middleware associated with its heritage OpenEdge fourth generation language. I don’t see a big place in this lineup for the former LogicBlaze which appears to compete with the Sonic enterprise service bus [ESB].