Divine’s final resting place

It is a dramatic turnaround in fortunes, one that in less extraordinary times might have garnered much more attention. Divine, the Internet-incubator turned software company bought up more than 20 software and professional services companies in the space of two years, spending more than $300 million in the process. Now its core assets have been sold for a meagre sum, believed to be about $5 million.

In May, New York-based software company FatWire agreed to acquire Divine’s content management products Content Server (formerly Open Market) and Participant Server (formerly Eprise) from Saratoga Partners, the private equity firm that bought Divine’s assets after it filed for Chapter 11 bankruptcy protection in February 2003.

The acquisition should come as a relief to the remaining management team at Divine. But the price tag is a long way from that which investors, and Divine’s founder and chief executive, Andrew ‘Flip’ Filipowski, must have once envisaged. Filipowski is the man who steered Platinum Technologies through some 70 acquisitions before selling it to Computer Associates for $3.6 billion in 1999.

Divine bought Open Market for almost $60 million in August 2001, and bought Eprise for $36 million a month later.

While the leadership of Divine has been savagely criticised, its technology is well regarded by analysts – Forrester Research described Content Server as “a mature web content management product with a solid architecture and feature set”, and even suggested that IBM should “jump on the opportunity” and acquire the product when Divine filed for Chapter 11.

Fatwire will get access to Divine’s 300-plus customer base, which includes blue-chip names such as investment bank JP Morgan and Ford Motor Company. FatWire also gains an entry into the European market through the acquisition.

There are some product synergies. FatWire’s UpdateEngine content management suite, like Content Server, is based entirely on the Java 2 Enterprise Edition (J2EE) application development platform, so integration should be straightforward – if that is what is intended.

FatWire’s UpdateEngine tends to be deployed in mid-sized companies, or on a departmental basis, whereas Divine has developed its technology and marketing on large-scale, enterprise-wide content management deployments.

One company that does not need to raise its profile is IBM, which acquired IT resource provisioning specialist Think Dynamics in May for an undisclosed sum.

IBM plans to incorporate Think Dynamics into its Tivoli systems management software division, but in the long term, it will be a crucial component of its wider, ‘on-demand computing’ strategy.

Think Dynamics’ product, Think Control Suite, collates real-time performance data from systems across the enterprise, checks this status against business processes and dynamically re-allocates computing resources where they are needed using virtualisation techniques.

Provisioning is an important element of on-demand computing architectures because it automates much of the systems management burden, freeing up IT staff to do more critical work.

Alan Ganek, vice president responsible for IBM’s autonomic computing initiative, also identified the Think Dynamics acquisition as an important milestone in IBM’s ability to deliver automatically self-configuring systems.

Over the past two months, a series of announcements from systems management suppliers, including Computer Associates, Veritas and HP, have hit upon the shift towards utility computing and virtualisation technologies and environments. By acquiring a crucial ‘on-demand’ technology, IBM is maintaining its leadership position. For more analysis on this sector, see the Industry feature.

Major IT acquisitions in May
Acquirer   Activity   HQ   Target   Activity   HQ   Price  
Adobe Publishing s/w US Syntrillium Software Digital audio editing s/w US  
Alcatel Network/telco systems Fr TiMetra Network service routing US $150.0m
FatWire Software Content management s/w US Divine’s Content Server div Content mgmt s/w US $5.0m
IBM Systems, s/w &svcs US Think Dynamics IT resource provisioning s/w Can n/a
JDA Software Retail demand chain s/w US Vista Software Solns Retail collab commerce s/w US $4.3m
Latitude Communications Online conferencing tech US Wanadu Content creation/delivery s/w US n/a
Manhattan Associates Supply chain execution s/w US ReturnCentral Returns mgmt s/w US n/a
Mercury Interactive Appln optimisation s/w US Performant Java performance s/w US $22.5m
Misys Financial/healthcare s/w UK Crossmar Matching Serv Fin trading verification s/w US £8.3m
NIB Capital Venture funding Holland Getronics HR Solns Payroll dp svcs Holland EU315.0m
Nokia Telecoms systems Fin Eizel Technologies Secure wireless access s/w US $21.0m
Parity IT services UK Technical Training IT training services UK n/a
Shiva Data access s/w US Memotec IP network s/w US n/a
Stratus Technologies Fault-tolerant servers US Cemprus Telecoms sector systems US n/a
Symantec Security s/w US Nexland Internet security appliances US $19.6m
Unica Marketing s/w US Marketic Campaign mgmt s/w Fr n/a

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Ben Rossi

Ben was Vitesse Media's editorial director, leading content creation and editorial strategy across all Vitesse products, including its market-leading B2B and consumer magazines, websites, research and...

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