Mercator, BEA Systems Team Up on Integration

By Maria Trombly | Securities Industry News | June 24, 2002

Mercator Software and BEA Systems, two leading technology providers, have teamed up to offer Wall Street customers a set of integration tools-and to defend their turf against other vendors. BEA Systems, based in San Jose, Calif., is best known for its WebLogic platform, an infrastructure for developing Web services and Web-based applications. Mercator, headquartered in Wilton, Conn., focuses on integration tools-including data extraction and transformation.

The Mercator-BEA tool set will allow Wall Street firms to jump start their Web services conversion efforts, as well as help solve other integration problems, executives from the two vendors said.

The new alliance draws on the strengths of each company, said Damon Kovelsky, a senior analyst at Newton, Mass.-based Meridien Research. Although he said was surprised by the deal, given that the companies overlap somewhat in the area of middleware, Kovelsky added: "It will have some nice benefits for their clientele."

In fact, part of the inspiration for the deal is that customers who used both Mercator integration tools and the BEA application server had to get the two products to work together on their own.

"This underscored that this deal does make sense," said John Knightly, senior director for BEA's financial services marketing.

According to Mercator's Jill Donohoe, senior vice president for global alliances and corporate development, the two companies will dedicate "hundreds" of staffers to developing the new tool set, sales and sales support. "There's a tremendous amount of dedication to the rollout and success of this relationship," she said.

As part of the deal, Mercator will rewrite some of its popular integration products for BEA's Java platform and will build a plug-in to the BEA application server, also to be written in Java. Web services are hot on Wall Street right now because this XML-based set of standards promises to be the Holy Grail of integration-allowing any application to talk to any other application. Although applications can be written from scratch as Web services, one approach currently being used by Wall Street companies such as Merrill Lynch is to wrap legacy applications in Web services shells-making them look like Web services to the outside world while preserving the business logic of the old application. In order to do that, though, the Web services shell has to be able to interact with the legacy application-which is where Mercator comes in.

"Mercator can reach into any proprietary system and expose it as a Web service," said Donohoe. "We're the only company that supports Omgeo, Swift-all those data standards."

The deal with BEA could help Mercator avoid becoming a me-too player in Wall Street integration, said Kimberly Knickle, an analyst at Boston-based AMR Research. "They're not a top-three vendor in the space based on revenue-IBM, Tibco and WebMethods are-and, as a result, they've been impacted more by the poor economy than the top three," she said.

BEA is also under competitive pressure, she added. IBM, Sun, and now Oracle, are all active in the application development framework space. IBM's WebSphere product, for example, competes directly with BEA's WebLogic and is gaining market share. Both allow companies to develop and publish Web services.

In addition, Microsoft has its .Net development platform, which, while not as strong as the Java-based platforms on the enterprise side, is regarded as allowing for faster user interface development. Since Web services are an open, universal standard, some companies are even combining offerings from multiple vendors.

However, according to BEA's Knightly, all of Wall Street's top 10 brokerages are BEA customers. The deal with Mercator will only serve to strengthen BEA's position on Wall Street. "And the part of this deal is also to highlight our WebLogic integration product, which runs on top of our WebLogic application server," he said.