This week's big news in the world of complex event processing (CEP) is that Aleri has aquired the assets of Coral8 and are "merging." Marc Adler, a Coral8 customer and commenter on CEP, wrote about "the birth of CorAleri" in his blog... Penny Crossman wrote a piece called "Critics Give Aleri-Coral8 Merger High Marks, but CEP Bloodbath Continues" in Wall Street and Technology.
Many of the comments I read got me scratching my head. So I thought I would share my own perspective on what I think this news means.
The CEP market remains independent, strong, and promising. Many predicted consolidation in the CEP market in 2009. Many thought Oracle or Sybase would buy their way into CEP. I'm glad that didn't happen, because I believe CEP will yield some great independent companies in the coming years. And I think the market is vibrant and disruptive. The fact that Coral8 and Aleri remain independent is good news for our industry.
But Curt Monash went another way, drawing the conclusion that Independent CEP Companies Continue to Flounder. The basis for his opinion is that CEP has demonstrated little traction outside of capital markets and the government. Well those are huge markets and CEP's traction is deep! The strongest of firms are growing between 50%-100% a year. If that's floundering, I like floundering! We just raised $6MM to fuel our growth - a great sign of confidence from our investors. StreamBase had it's best quarter in the history in Q4 - that's right - in Q4 of 2008 - in the midst of cataclysmic economic conditions.
So I think this news re-enforces that the future of CEP is bright.
High marks on the acquisition...but only for the concept. The WS&T cited a few analysts that think the acquisition "makes sense." On a very high level, and in one specific dimension, I'll agree. Aleri was focused on capital markets, Coral8 was not. The merged firm will focus on capital markets. Clarity of direction bodes well for mergers.
Low marks for Coral8 and Aleri in terms of it's chances for success and customer satisfaction. Once again, clarity of direction bodes well for mergers. In software company mergers, the most important clarity is on product direction - overlap must be small, and synergies must be obvious to customers. This product combination is clear as mud.
These are two products that used to compete head to head. Either Coral8 or Aleri typically made the final 3 in competitive evaluations. So the merged firm will have two products do the same thing, albeit in different ways. Which begs the question: which way is best and which will survive? Marc Adler said he was told by the two CEOs that a single product would result that has BOTH engines. This is a recipe for disaster. There are two server architectures. Each product has a different programming language. There are two overlapping sets of tools.
These product mismatches are deep and profound. Even Marc Adler, a Coral8 customer and advocate for the firms, questioned the product strategy he's heard from the two CEOs:
"You cannot have two engines running simultaneously on a single server. They would be competing for resources. We have to worry about administering another process on our servers. We wouldn’t be sure which engine was handling what. It makes monitoring more difficult.If you give a customer too many choices, then the customer might get confused. Customers want transparency and simplicity. If you confuse a customer, then that customer might change over to a CEP vendor who offers a simpler solution. This means that a confused customer might run over to Apama or Streambase."
This kind of uncertainty has already become apparent to us - we've had a rash of unsolicited requests from Coral8 and Aleri customers about StreamBase, which is why we decided to announce an amnesty program.
A positive step toward language standardization? Coral8's CCL language is SQL-based, and Aleri's Splash isn't (although they have one that's also SQL oriented, too). Although I don't think there has been a formal announcement, it seems likely that the SQL-based metaphor should survive long-term in the newly combined Coral8/Aleri product.