Web development market consolidates as it matures

A spate of recent acquisitions in the Web development arena is a form of economic Darwinism that is bound to continue, according to analysts, and should serve to warn users about being careful when choosing technology suppliers.

Last week, Macromedia officials said the company will swap $US24 million of its stock to acquire Elemental Software and its Web application development environments; Citrix Systems bought Web-based application development vendor ViewSoft for $32 million; and Web application developer Allaire has finalised a $33 million purchase of Live Software, a server-side Java enabler.

The buying action is part of a broader consolidation trend in the Internet and enterprise technology sectors that amounts to a massive game of three-card monte, said Daryl Plummer, vice president of Internet application development and Java for the Gartner Group.

"The game is to get acquired, get to an IPO [initial public offering], or get funded enough to get acquired or go IPO," Plummer said. "Allaire recently went IPO, and so they are buying. They are trying to build up their stack."

The buying frenzy is likely to continue as the economic winners purchase technologies to fill product-line holes and broaden their portfolios to produce an enterprise-worthy set of solutions, Plummer said.

Users need to be wary that their technology partners may become divisions of some other company -- perhaps a competitor -- and that product strategies can unpredictably change course. However, not all mergers adversely affect products and often can benefit customers, analysts said.

"ViewSoft didn't want to get acquired, but then all of a sudden it went," Plummer said. "But it's some very nice technology for Citrix."

Macromedia's purchase of Elemental is designed to bring Macromedia's Web publishing products, such as Dreamweaver and Generator, into a duet with Elemental's dynamic Web application development products, Drumbeat and eStore Builder. The ensuing tango between the products should allow Web developers to create pages and manage sites in Dreamweaver, dynamically publish Web site graphics and animation with Generator, link database content to Web pages with Drumbeat 2000, and visually create Internet-commerce storefronts with eStore Builder, officials from both companies said.

As for Citrix, the company plans to use ViewSoft's technology to offer independent software vendors, corporate developers, and systems integrators the capability to create Web-based applications that sport the rich features of client/server-based applications.

Allaire was drawn to buy Live Software for its Jrun, a pure Java, server-side development and deployment platform that will allow Allaire's products to support JavaServer Pages and overall server-side Java, Allaire officials said. Allaire's ColdFusion and Jrun form "perfect cousins" by allowing both a Java and an HTML-based approach to Web development, said Jeremy Allaire, vice president for product technology. Jrun will be built into the ColdFusion application server during the next year, he said.