Sun spends $387m on SeeBeyond

Sun Microsystems plans to bolster its software line-up with the acquisition of integration specialist SeeBeyond for $387m in cash.

The server and software giant said it will pay a 29.6 premium above SeeBeyond's closing stock price on Monday. The transaction is expected to close in the autumn.

Executives said that SeeBeyond's software will fill a gap in Sun's Java Enterprise System product line.

Jonathan Schwartz, Sun's president and chief operating officer, said during a conference call on Tuesday morning: "Software is the leading edge of large-scale revenue opportunities going forward."

In particular, corporate customers need software to link their disparate systems and to secure network access, Schwartz said. "As soon as we get those resolved, it yields a significant wave of infrastructure deployment," he said.

SeeBeyond's Java-based integration software and tools will become the sixth offering out of Sun's Java Enterprise System server software suite. During the past two years, SeeBeyond has converted its proprietary application integration software to run on standard Java application servers. The company was founded in 1989 and is based in southern California.

The acquisition gives Sun a significant integration product in its Java server suite, after lacking strong products in that category for years. Additionally, the company announced that it intends to open source its upcoming Sun Java Enterprise Service Bus, a Java server designed around a new standard called Java Business Integration.

With SeeBeyond and Enterprise Service Bus, Sun will have a more complete infrastructure server portfolio to compete against middleware market leaders BEA Systems, IBM and Microsoft. But Mike Gilpin, an analyst at Forrester Research, said the addition of SeeBeyond is not likely to yield a significant boost in market share.

"Sun doesn't make the short list of vendors when people buy these platform suites nearly as often as they would like," Gilpin said. "Certainly this will make some impact but it will be marginal around the edges."

SeeBeyond last year made $163m in revenue and a slight profit after losing money the two previous years.

Also last year, Sun and SeeBeyond signed a partnership related to RFID technology.

The planned purchase of SeeBeyond follows Sun's announcement earlier this month that it would buy StorageTek. Sun CEO Scott McNealy said during Tuesday's conference call that the technology giant intends to continue buying other companies.

"We're certainly quite flush in cash right now and I think we have significant capacity to do interesting strategic acquisitions," McNealy said.

Martin LaMonica writes for CNET News.com