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Analysis: SaaS Firm Workday Buys ESB-Maker Cape Clear
02/14/2008
By Joe McKendrick, Contributing Editor and Research Consultant, ebizQ

Editor's note: This article is reprinted with permission from the author.

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Acquisitions are a dime a dozen (okay, make that a billion a dozen) in the SOA space, and we've seen plenty of specialized SOA vendors get swept up by larger infrastructure players over the past couple of years. But the latest acquisition has a funky aspect to it -- the acquirer is a Web 2.0 SaaSy company, Workday, which is acquiring Cape Clear, an ESB company. (ZDNet colleagues Dan Farber, Dana Gardner, Phil Wainewright have weighed in on the news as well.)

Workday offers ERP applications via the SaaS model, and has been quite an interesting story over the past year or so. They call themselves the "on-demand alternative to ERP." (SAP seems to have taken note, as they announced they plan to offer SaaS-based ERP via "Business By Design") How does Cape Clear fit into this picture? According to CEO Annrai O'Toole, this reflects something he's been talking about for some time -- a movement away form Big IT and Big SOA to the delivery of software-based services on an as-needed basis:

"For those of you who may be a little surprised at a hosted applications company buying an SOA and Enterprise Service Bus company, you shouldn't be. This is really the logical outcome of many of the things I've written about ...over the last several years... 1. SOA needs to be kept simple and focus on the business side of the house, 2. SOA is about enabling applications, not technology, 3. The future of SOA is tied up with the whole phenomena of 'On Demand.'"

Workday is leveraging its Cape Clear purchase as "Integration on Demand," (thank goodness they're not calling it Integration as a Service, or IaaS), which addresses one of the thorniest obstacles to SaaS -- the ability to tie on-demand applications and data with existing on-premise systems. With Cape Clear ESB, Workday says it "can offer both packaged and custom integrations that can be designed and deployed much more quickly than on-premise approaches." Not everyone looks upon the acquisition so positively, though.

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