Tibco buys competitor Talarian

Real-time messaging middleware pioneer Tibco Software has agreed to buy smaller competitor Talarian Corp. in a cash and stock deal valued at $115 million. The acquisition is expected to be completed by June, 2002.

AMR Research analyst Robert Bois said the deal provides Tibco with two primary assets: access to almost 300 Talarian customers, many in the financial services and aerospace and defense industries; and to Talarian's SmartSockets messaging family of products.

Bois said the deal provides Talarian customers a more economically stable supplier. "Although Talarian offers a good high-end messaging product, it competes with Tibco, IBM, and Microsoft for market share. Talarian's customers now graduate from a vendor with less than $15 million (in annual revenue) to a company with more than $300 million in annual revenue."

Giga analyst Mike Gilpin sees Tibco gaining other advantages, as well.

"Tibco also gains access to engineering talent, together with the fruits of its recent efforts, including a very advanced implementation of the Java Message Service (JMS)," he said. "The acquisition of Talarian also helps to gird Tibco more effectively for an impending battle with IBM, which has never successfully challenged Tibco's hold on this (technical) part of the market, although recent indications are that IBM would like to do so with some of its newer offerings based on WebSphere's JMS and MQSeries."

Originally a developer of command and control software to the aerospace industry, Los Altos, CA-based Talarian in recent years began selling communications applications. Its SmartSockets app ties together existing software and systems, allowing users to share information across disparate platforms. Talarian also provides consulting, design, and maintenance services.

The acquisition extends Tibco's offerings in the fast-growing business integration market, analysts said. The Palo Alto, Calif.-based company is best known for its ActiveEnterprise software, said to enable businesses to connect resources with customers and deliver event-driven information in real-time. The addition of Talarian's products and services further extends the breadth of Tibco's integration messaging solutions, observers said.

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John K. Waters is a freelance writer based in Silicon Valley. He can be reached at [email protected].