Shakeout Seen in Web Services Market Securities firm expects demise of smaller players in 2004 By Yvonne L. Lee Software Development Times January 15, 2004 Web services specializations will begin to disappear in 2004 as the larger development companies swallow up the smaller fries, according to merger and acquisitions adviser Martin Wolf Securities LLC. "We think there will be less than a handful [of specialist firms remaining]," said founder and president Martin Wolf. "There will be three or four transactions of note, and the rest will go away or they'll have to transmogrify themselves into something else." In a qualitative report of the Web services field, the firm identified BEA, Borland, IBM, Microsoft and Sun as the big fish that will seek to acquire smaller firms in the areas of Web services security, management and development tools. Oracle analyzed the field and decided it would build its own specialty applications, said associate managing director Scott Messier. Which companies become acquired or otherwise remain afloat will depend on the partnerships and integrations they form with the larger firms, said Messier. "Blue Titan has integrated its product line with BEA," said Messier. "AmberPoint's very tight with Microsoft, but what's smart about what AmberPoint's doing is they're playing both sides of the fence. They're close with IBM as well." He said companies that integrated with more than one development system would have greater leverage during negotiations and identified Actional, AmberPoint, Blue Titan and Confluent as having the strongest position. A report on Web Services by Martin Wolf Securities LLC talkes a look at the "big fish" in the market. Click here for full report. Martin Wolf Securities admits to representing a Web services firm that is seeking to sell itself, although neither Wolf nor Messier would disclose the firm. Martin Wolf Securities' Web site lists confidentiality as a service to its clients. The company's predictions should be interpreted in light of this potential conflict of interest. The Web services study compared the anticipated shakeout with a similar contraction in Web portals, where such software became a part of the major vendors' suites; Martin Wolf said that only Plumtree Software Inc. remains of the more than 80 pure-play companies that were around at the niche's zenith in the late 1990s. The survey concluded that Web services will be engulfed by the enterprise software niches of systems management, overall application development and integration. Those three sectors have already experienced significant consolidation. Martin Wolf Securities admits to representing a Web services firm that is seeking to sell itself, although neither Wolf nor Messier would disclose the firm. Martin Wolf Securities' Web site lists confidentiality as a service to its clients. The company's predictions should be interpreted in light of this potential conflict of interest. The Web services study compared the anticipated shakeout with a similar contraction in Web portals, where such software became a part of the major vendors' suites; Martin Wolf said that only Plumtree Software Inc. remains of the more than 80 pure-play companies that were around at the niche's zenith in the late 1990s. The survey concluded that Web services will be engulfed by the enterprise software niches of systems management, overall application development and integration. Those three sectors have already experienced significant consolidation.