BEA Systems acquires Fuego

By Dawn Kawamoto
Staff Writer, CNET News.com Published: March 1, 2006 8:36 AM PST Last modified: March 1, 2006 10:41 AM PST

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update BEA Systems announced Wednesday that it bought business process management software maker Fuego for $87.5 million in cash.

BEA, which announced or closed roughly half a dozen acquisitions in 2005, is seeking to further expand its presence in the service-oriented architecture (SOA) software market with its purchase of Fuego.

"The addition of Fuego to our AquaLogic portfolio means that we (can)...offer a unified SOA-based platform to integrate business processes, applications and legacy environments," Alfred Chuang, BEA chief executive, said in a statement.

Fuego targets executives and managers with technology designed to improve their business process management (BPM) in areas such as analysis, monitoring and human workflow. BPM is considered a fast-growing segment of the SOA market, BEA executives said.

With the acquisition, BEA plans to use Fuego's products as the foundation for its new AquaLogic Business Service Interaction product line. That line is one of nearly half a dozen AquaLogic product lines that BEA has launched since its introduction of AquaLogic last summer.

Before the Fuego acquisition, AquaLogic was primarily targeted at software developers looking to ease the process of building business applications. AquaLogic lets software architects assemble applications using Web-services protocols to aid data sharing between applications and messaging software. With such program-to-program communications, developers do not need to write Java code, BEA said. The Fuego acquisition, however, will extend the AquaLogic line to business executives and managers with the BPM offerings.

"Over the last two years, BPM has come of age," John Lauck, Fuego's chief executive, said during a conference call with analysts. "Companies, as part of their SOA strategy, are starting to do BPM on an enterprise scale."

Fuego, which chiefly competes against IBM and Tibco Software, has focused on the financial services and telecommunications industries, landing customers such as JPMorgan Chase and Southwest Airlines.

"We haven't lost a deal in the past 12 months where we've been in direct competition" with IBM and Tibco, Lauck said.

Fuego, which previously had an original equipment manufacture agreement with Plumtree Software, became better acquainted with BEA after the middleware vendor acquired Plumtree for $200 million. Plumtree is a Web portal applications tool maker.

The Plumtree deal was designed to allow BEA customers to build Web interfaces for Java and Microsoft .Net servers.

The Fuego deal is part of an aggressive acquisition path that BEA has followed in the past year. Last year, BEA not only snapped up Plumtree, but announced smaller deals such as the purchase of applications tools developer M7 and relational database tools maker SolarMetric.