Axway/Vordel Deal Could Be Greater Than the Sum of Its Parts


Archived Published: 13 November 2012 ID: G00246368

Analyst(s):

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Summary

Acquiring Vordel could enable Axway to mix integration, governance and cloud functions in a B2B infrastructure offering with API management capabilities. But its success depends on deep integration and effective marketing.

News Analysis

Event

On 6 November 2012, Axway, a software vendor that focuses on integration and management of business interaction networks, announced that it plans to acquire Vordel, which offers service-oriented architecture (SOA) gateways and application programming interface (API) management. Axway did not disclose financial terms of the deal, but said that it expects to close on the transaction by the end of 4Q12.

Analysis

This acquisition brings together varied technologies that could potentially be combined to create a powerful offering with a high level of competitive differentiation. The deal could enable Axway to exploit synergies between its application-to-application (A2A) and business-to-business (B2B) integration, managed file transfer capabilities, and a nascent integration brokerage business, with Vordel's application program interface (API) management, SOA governance technology with advanced security policies, a nascent cloud services brokerage (CSB) role and cloud integration capabilities. As the set of functions that this acquisition assembles could span several markets, Axway could leverage it to:

  • Extend its strategy to mobile, cloud-based application integration and API management projects.

  • Realize the power of policy management in running a B2B service, which Gartner has long asserted.

  • In the application infrastructure areas we have described, offer a powerful Europe-based alternative to offerings that are primarily North America-based. This could appeal not only to the North American market, but also to European customers, mainly for privacy reasons (see "In a Diverse Europe, Cloud Adoption Will Be Slower" ), as well as customers in other geographies.

Axway's history of successful acquisitions could help it exploit these new functions. The company's growth has led to yearly revenue in excess of €200 million; despite a healthy growth rate, Vordel is several orders of magnitude smaller. However, tight integration of the synergistic technologies of the two companies will be key, especially in competing with IBM.

Axway has the advantage of its deep B2B knowledge and skills, but relatively little experience with cloud computing. To win business against IBM, Software AG and Oracle —which have much stronger marketing arms and much greater mind share, particularly in the U.S. — and specialists like GXS and Liaison, Axway must step up its marketing efforts and emphasize the competitive advantage of its nascent integration brokerage and its API management capabilities.

If Axway succeeds, vendors of B2B infrastructure and API management solutions will need to be wary of the joint Axway/Vordel offering, which will constitute a powerful competitive argument. With the possible exception of IBM, even the megavendors have not assembled this breadth of functions. The speed at which current offerings will be integrated is also key. For example, right now enterprises are looking for flexible security policies on their multienteprise B2B processes, which are moving into the cloud. If Axway promptly assembles and effectively markets integrated functionality like this, this deal could be greater than the sum of its parts.

Recommendations

Enterprises: If you are seeking a modern B2B infrastructure, especially in conjunction with API management, evaluate the new Axway offerings; however, keep in mind that the real power will come from deep integration of the two companies' technologies.

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