Progress buys Neon

Progress has just announced that it will acquire Neon Systems and merge that company with its DataDirect operating division. Simple question: why?

For those of you not familiar with either DataDirect or Neon, a brief exposition may be appropriate. First: DataDirect.

DataDirect started life as SequeLink which, a decade ago, was the major rival to what was then Information Builders’ (now iWay’s) EDA/SQL. That is, it was one of the earliest providers of connector technology. However, more recently it has specialised in providing optimised connectors using ODBC, JDBC, ADO and .NET. DataDirect also includes the Stylus Studio product that Progress acquired when it bought eXcelon, which provides XQuery capability.

In other words, DataDirect specialises in standards-based connectivity.

Neon Systems, on the other hand, is a specialist in mainframe connectivity and, although it uses ODBC and JDBC in some instances, its strength (in connectivity terms) has historically been its deep understanding of the environments it was communicating with and its native connectors thereto. Looked at from this point of view, the two companies do not seem a natural fit. The best way to access CICS, for example, is probably not via ODBC!

However, where Neon Systems does have important capability is in its ability to service-enable mainframe environments. That is, it can enable an existing mainframe application as a provider of web services. Moreover, unlike the approaches proposed by some other vendors, it can also enable mainframe applications to become consumers of web services.

As an aside it is worth noting that Neon Systems has been talking about SOA-enabling the mainframe for a year or more. However, the company reports that there has been a significant growth in interest since IBM released CICS 3.1, which provides SOA support within CICS for the first time. In other words, the concept has now been endorsed by IBM so it must be OK. This says something about both users and about IBM’s claims at its recent analyst conference that it does not want to tell the market what to do: the fact is that IBM is in a leadership position and people respond to that leadership.

Going back to the subject in hand: in other words, the acquisition of Neon means that Progress (not just DataDirect but also its Sonic and Real-Time divisions) can expand its SOA message to the mainframe whereas previously it was limited to open systems. Given that most of the companies that are in the forefront of the SOA movement tend to be large enterprises, and that most large enterprises have mainframes, then this acquisition makes excellent sense.

What I am not sure about is whether the current organisation of Progress can be sustained. There seems to be too much overlap between Sonic, the Real-Time division and, now, DataDirect for this structure to be retained. For SOA, in particular, you need elements from each and a rethink of the current divisions may make sense, otherwise users are likely to get confused (if they are not already).