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SOA for verticals drives IBM's purchase of Webify

With Webify acquisition, Big Blue gains software and expertise in insurance and healthcare for its industry-specific SOA strategy.

IBM announced the purchase of privately held Webify Solutions Inc. yesterday and gained immediate access to the Austin, Texas-based startup company's technology designed specifically for service-oriented architecture implementations in insurance and healthcare.

The most important thing to note about the acquisition is that it opens more widely industry discussion about a new way to think about packaged application.
Randy Heffner
Vice PresidentForrester Research, Inc.

SOA components specifically designed for those two industries, including support for regulatory compliance will be integrated into IBM WebSphere, said Robert LeBlanc, general manager for IBM WebSphere Software.

"Webify combines the understanding of not only SOA, but the industry-specific things, the semantics, the frameworks, the adapters," he said during a teleconference yesterday to announce the purchase at an undisclosed price. LeBlanc characterized IBM's vertical focus as the next generation of SOA.

Whether it proves right or wrong, IBM vertical strategy is likely to recast the discussion about SOA marketing and implementation, according to Randy Heffner, vice president at Forrester Research, Inc.

"The most important thing to note about the acquisition is that it opens more widely industry discussion about a new way to think about packaged applications," the analyst said. "Whether the new model will take hold is still very much an open question, but in essence, the Webify acquisition throws IBM's weight more firmly behind a model where the most valuable thing to buy off-the-shelf is not some application package that knows how to do order entry transactions or whatever, but, in a sense, the definition of the business itself -- vertical industry specific business services and process flows."

Beyond the strategic play, at the bits and bytes level, IBM gets some additional technology out of the deal, Heffner said. "IBM gets new pieces of middleware functionality that it can integrate into its various lines of software," he explained.

Peggy Vaughan, global consulting services leader for IBM Global Services, said the focus on a vertical strategy is driven by customer demand.

"We're seeing an amazing uptick in our customers' requests for industry specific expertise in regard to creating SOAs," she said during the teleconference. To help meet that demand, she said the acquisition will provide IBM services consultants with Webify's technology. "We'll gain immediate access to their extensive library of composite business modules and suites," she said.

She said Webify's technology for insurance and healthcare will complement the work being done at the IBM Global Business Solutions Center, which was launched this past March in India to develop industry-specific technology for "SOA-based composite business services."

Prior to the acquisition, the two companies were not strangers, she explained. IBM and Webify had an existing technology partnership and were working together on projects including a major SOA implementation now underway at Fireman's Fund Insurance Company, Vaughan said.

Webify's software and integration services integrated with WebSphere are being used to consolidate as many as 70 percent of the insurance giant's applications in areas such as policy administration and billing, she said.

"This will reduce costs while making resources available for new IT projects that generate new revenue," Vaughan said.

Beyond the SOA technology it has developed, Webify business software is designed to handle specific regulatory issues, including HIPAA compliance for healthcare companies and ACORD standards in the insurance industry, said Manoj Saxena, Webify chairman and CEO.

Explaining the specific technology Webify will add to IBM's WebSphere mix, he said, Webify offers two basic products.

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"First, there's the Webify Industry Fabric," he said. "Think of that as a baseplate on which the different development and runtime software is implemented to start development and assembly of these composite business applications. The second offering is composite business services (Webify Healthcare and Webify Insurance). Those can be seen as Lego blocks that make SOA more scaleable and consumable. Webify's composite business applications that we provide to insurance and healthcare cover some of the core business processes in insurance and healthcare such as benefits and eligibility."

Besides the partnership with IBM, Webify also has partnerships with Oracle Corp. and BEA Systems Inc. to run these products on those platforms, Saxena said. Now that Webify is an IBM company, he said it will continue to support customers that chose to do their SOA implementation on the Oracle or BEA platforms.

Saxena told reporters that he will continue to run Webify and also will concentrate on advancing IBM's vertical SOA strategy, including work his company has begun in banking and telecom. He will report to LeBlanc. Webify's 120 employees, based in Austin and Mumbai, India will become IBM employees as part of the acquisition.

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