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Market Research Digest - 11th July 2002

Cape Clear Software Announces Integration With

CAMPBELL, Calif., July 8 /PRNewswire/ -- Cape Clear(TM) Software, a leading provider of Web Services technology, has today announced an agreement with, the market leader in online customer relationship management (CRM), to provide a Web Services-based integration solution. customers can now use Cape Clear's integrated Web Services development environment, CapeStudio(TM), to link their CRM application to other systems and applications throughout the enterprise without the time and cost implications of traditional Enterprise Application Integration (EAI) solutions. Cunning move by Cape Clear - getting associated withe one of the best known hosted application suppliers (so the most prone to need web services).

Steady Growth Seen for AIM and Portal Markets (Dataquest)

07/03/02, 8:30 a.m. EDT--The worldwide application integration and middleware (AIM) and portal markets will grow steadily from $5.1 billion in 2001 to nearly $6 billion in 2002 and $10.5 billion by 2006, according to research and advisory firm Gartner's Dataquest unit. Dataquest predicts that growth will be spurred by a high rate of technological innovation, combined with the escalating business requirements for integration.

Dataquest's report also forecasts the emergence of a new class of e-business platform software that combines application servers, portal software and integration broker technology into a single solution. It sees this merger of applications leading to further consolidation in the software industry and increased competition among vendors. Finally, the report suggests that the promise of Web services will lead to the creation of low-cost, low-end integration packages, but it notes that vendors will have to dramatically improve the quality of service characteristics of Web services via integration middleware and portal products.

Dirig Software Receives $15 Million in Funding From Battery Ventures and Present Investors

Company Executes on Business Plan; Positions Company as Web Performance Management Market Leader NASHUA, N.H.--(BUSINESS WIRE)--July 8, 2002-- Dirig Software, a leading developer of award-winning enterprise application performance management solutions for eBusiness, today announced a $15 million round of financing led by Battery Ventures with additional investment from original investors JMI Equity, Longworth Venture Partners and Aprisma Management Technologies. Ollie Curme, general partner with Battery Ventures, will join the Company's board of directors. The funding will allow the company to meet its growth strategy through new product development and continued expansion of its sales and marketing infrastructure. There's lots of money and effort going into application/performance management at the moment.

eXcelon Updates Second Quarter Revenue and EPS Projections

BURLINGTON, Mass.--(BUSINESS WIRE)--July 9, 2002--eXcelon Corporation (Nasdaq: EXLN - News) today announced that revenue for the second quarter ended June 30, 2002 is expected to be in the range of $9.5 to $9.8 million, below the guidance of $11 to $13 million given on the April 11, 2002 conference call. GAAP loss per share for the second quarter 2002 is estimated to be in the range of $0.10 to $0.11 per share. This loss per share includes a non-cash charge related to the write-down of unused computer equipment of approximately $0.03 per share. Loss per share exclusive of this non-cash charge is expected to be $0.07 - $0.08 per share. Previous guidance provided on April 11, 2002 predicted a $0.02 to $0.05 loss per share. The company expects its quarter ending cash balance to be approximately $19 million and its DSO to be about 70 days. In addition, the company announced today that it expects to record a restructuring charge in the third quarter ending September 30, 2002. The company estimates the size of the restructuring charge to be approximately $0.02 - $0.03 per share, reducing staffing by approximately 30%, and lowering the total expense base of the company to approximately $10M for the third quarter, exclusive of restructuring charges or other one-time charges. "While this was a disappointing quarter due to a difficult economic climate which contributed to our poor sales execution, I remain convinced that eXcelon is unique in its ability to solve difficult problems and to create value for our customers," said Joe Bellini, CEO of eXcelon. "We are restructuring the company to return to near-term profitability while keeping ourselves positioned for future revenue growth around XML." eXcelon will announce final Q2 2002 results on July 18, 2002. eXcelon's Object Design subsidiary is a caching competitor with their Javlin product. They also have an ebXML BPM engine, Stylus Studio (for XML / XSLT transformation development) and XIS, "the first and best XML database"

Ilog hones in on Web services

Ilog is looking at its experience with business rules jumpstart its position in the Web services space. A company executive said Ilog is working to integrate its product lines to take further advantage of opportunities in the Web services market.,3959,274946,00.asp "Abramatic said the opportunity Web services represents for Ilog's business rules is "an order of magnitude" ahead of where the company is today. He said to help companies pilot Web services, call Web services in deployed environments and to orchestrate Web services together ranks as "a great opportunity for Ilog." Indeed, Abramatic said it could be enough to change the product revenue mix of the company, which has been moving toward integration. Ilog has three main business areas: visualization tools, optimization tools and business rules technology. Business rules is the fastest growing piece of the company, he said. Visualization is oldest and has the largest installed base, he said. And optimization brings in a larger portion of the company's revenue, but the business rules opportunity with Web services "is a big opportunity because we can make a serious significant change," Abramatic said.

Kenamea Updates Web Services Messaging Tool

"The new release features integration with other message-queuing technologies, including TIBCO/Talarian, IBM WebSphere MQ, Sonic Software's SonicMQ, and BEA WebLogic Integration. The WebSphere support is especially deep..."

Kenamea also gave a heads-up for its version 2.0 release, due this fall, which will add HTTP message delivery; extended mobile support including Palm OS and RIM Blackberry; and improved redundancy and fail-over capabilities. It will also boost support for Web services protocols, including support for asynchronous message queuing for any Web services protocols such as SOAP, WSDL, and HTTP.

Modulant and Fiorano ease deployment of advanced interoperability systems

SAN FRANCISCO, Calif., July 02, 2002 - Modulant, the leading provider of semantics-based interoperability solutions, and Fiorano, the leading provider of JMS messaging and standards-based peer-to-peer EAI solutions, today announced a strategic alliance to leverage each other's technologies and jointly market complementary solutions to meet growing customer demand for cost-effective, rapidly deployable, and easily maintainable application integration.

See also

IDC - World-wide Application Server Software Platforms Market Growth Dwindles, But Will Pick Up Again!

During 2000 and 2001 the ASSP market enjoyed dynamic growth and attracted a large number of vendors. In early 2001 IDC forecast continued substantial growth, with 2001 growth in Western Europe anticipated to be 70%. The IT crisis of 2001 caused the actual worldwide market growth for ASSP to dwindle to 10.5%. The US market stagnated entirely (0.1% growth) and Western Europe had a disappointing 10.6% growth. Other regions were not as badly impacted and achieved more respectable growth rates of 33.8% (Asia Pacific) and 59.9% (rest of world). USA remains the largest single market with 50% of ASSP revenues, followed by Western Europe, Asia Pacific and rest of world. However, the Western European ASSP market should not be regarded as a single market, but rather approached as a number of separate country-level markets. It follows that the essential prerequisite for successful penetration into these markets it to have strong local presence in both sales and support. by our friend Rob Hailstone, and dated June. Note the slight gap between prediction (70%) and outturn (10%) in W Europe...

IDC Forecasts Tripling of e-Commerce Apps Market

07/08/02, 8:30 a.m. EDT--IDC predicts that the worldwide e-commerce applications market will reach almost $17 billion by 2006, more than tripling what it posted last year. The market intelligence and advisory firm sees the demand for high-performance applications, a growing emphasis on verticalized solutions and Web services forming the basis of a unified commerce concept that will be the main driver of the market's growth.

According to IDC, the performance problems that have hampered the growth of e-commerce will be resolved once Web services have fully emerged, and it notes that vendors who are beginning to expose application components as Web services are seeing growing acceptance of their approach. With the unified commerce model, companies will be able to use their e-commerce sites to capture and consolidate data from customers, suppliers and business partners to see the overview - $4500 to see the detail (so tough). With the growth of web services and the potential integration of internal and extermal business messaging, there is an opportunity for SpiritSoft here.

IONA Q2/2002 profit warning - estimates down 40% since April

(reported by WestLB Panmure) IONA Technologies pre-released its Q2/2002 results. Sales ranging between US$26 and US$26.5m will be about 40% below our expectations (WLBPe US$41.4m) and expected software sales ranging between US$13 and US$13.5m will be 50% below our expectations (WLBPe US$26m). Our estimates were also in line with the consensus.

IONA will accelerate its cost cutting programme and expects a pro forma EPS loss of between US$0.47 and US$0.49 (vs. WLBPe US$0.06).

After the preliminary figures issued by Tibco, SeeBeyond and WebMethods this pre-release did not come as a surprise, but the magnitude is breathtaking. IONA will publish its final Q2/2002 results on 17 July. It will now be crucial for IONA to limit its cash burn. With a net cash position of US$100m, IONA can survive a sustained IT weakness - if the cash burn can be kept low. Note: This negative surprise came from Europe, while prior disappointments came from the US. Europe was down 50% sequentially. As in previous quarters, it is too difficult to close enterprise deals in the current environment (only 2 deals worth more than US$1m were signed). The key for IONA will be to slash its cost base and limit cash burn - especially if the current environment prevails.

(Reuters) The company's stock lost more than one-fourth of its value on the after-hours news, falling to around $3.75 on Instinet from its Nasdaq close of $5.17. See See the press release at

.NET Advancing Quickly on J2EE

But research shows Java maintains strong position...Read the article at

Systinet Ranked by Time Magazine Among 50 Hottest Tech Firms

Web Services Leader Included for Second Year in a Row and Cited for Innovation and Promising Business Model CAMBRIDGE, Mass.--(BUSINESS WIRE)--July 8, 2002--Systinet, the leading independent provider of Web services infrastructure software, today announced its inclusion in the TIME magazine "Europe's 50 Hottest Tech Firms" list. This is the second year in a row that TIME, the world's largest and most successful news magazine, has included Systinet on this high profile list. Originally founded in Prague and now based in Cambridge, Massachusetts, Systinet provides solutions that make it easy for enterprises to build, deploy, secure and manage Web services.

Tibco Software Sees $2M 3Q Restructuring Charge On Job Cuts

Tibco Software Inc. (TIBX) plans to take a restructuring charge of about $2 million in the third quarter related to staff cuts, the company said in a 10-Q filing with the Securities and Exchange Commission (5 Jul). The business integration software company cut 65 jobs in June to "further align the company's cost structure with changing market conditions," the filing said. Of the staff reductions, 41% were in sales and marketing, 23% in professional service, 18% administration and 18% in research and development. For the second quarter, Tibco Software reported a net loss of about $56 million, or 27 cents a share, compared with a loss of about $18 million, or 9 cents a share for the prior year period.

WebMethods estimates down

WebMethods is 3rd US middleware vendor to pre-release results; lack of visibility remains. After Tibco and SeeBeyond, WebMethods was the 3rd US middleware vendor, which pre-released its FY2003 1st quarter results. WebMethods expects US$47-48m sales (and a loss per share of US$0.03-0.05) instead of sales guidance of US$50M+ (and breakeven EPS) after their Q4/FY2002, which ended in March, 31 In a yoy comparison group sales are down 15% and software license sales will be down about 30%. The shortfall is due to deal slippage. The weak vertical continues to be telco and interestingly the manufacturing seems to do relatively well.

Web Services and J2EE: Partners in Integration

Java and Web services technologies can help simplify and standardize your internal and B2B integration efforts. Here, SilverStream Software's Michael Demastrie explains the benefits of combining Web services and the J2EE platform.

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