13 August 2002 WebGain has sold its core software tools business to rival TogetherSoft. Java application development tools vendor WebGain ceased trading in mid-2002 after apparently burning its way through $220 million (€225m) in funding.
The acquisition leaves WebGain with just one remaining product, its Application Composer software, which is also for sale. TogetherSoft’s move follows the acquisition by database giant Oracle of WebGain’s TopLink object-to-relational mapping tools in June 2002.
TogetherSoft has bought WebGain’s Studio tool suite, including its flagship Visual Café, a Java integrated development tool environment, as well its StructureBuilder, Business Designer and Quality Analyzer products. TogetherSoft did not disclose financial details of the deal, but it is believed to have paid a heavily discounted price.
Spun off by BEA Systems, the leading application server supplier, in early 2000, WebGain was a victim of its over-ambitious acquisition binge. Between early 2000 and mid-2001, WebGain completed no less than six transactions.
The company’s efforts to knit all of its acquired products together and offer them as an integrated suite “spread WebGain’s resource too thinly”, says a source close to the company. As a result, the quality of WebGain’s products slipped, which manifested itself in numerous software bugs, adds the source.
BEA, which owns 19% of WebGain, must also share some of the blame. In 2001, 85% of WebGain’s sales were to BEA WebLogic application server customers, according to analyst Giga Information Group. Initially, BEA planned to include WebGain’s Studio suite in its web services framework, code-named Cajun.
But BEA decided to develop its own suite of Java development tools when it saw WebGain’s sales start to slump, says the source. Ultimately, however, WebGain’s inability to compete with rival suppliers of Java tools, including IBM, Oracle, Microsoft and TogetherSoft, sealed the company’s fate.
TogetherSoft’s purchase will lift the uncertainty for WebGain Studio customers. TogetherSoft’s technology is also closely tied to BEA’s WebLogic application server. The company will offer WebGain customers an integration package to migrate to TogetherSoft’s integrated Java tools suite. TogetherSoft is directing WebGain customers to its web site.