WebMethods builds fed team

Integration specialist webMethods Inc. made a splash several weeks ago when it appointed ex-Virginia technology czar Don Upson to lead a portion of its new team aimed at slicing off part of the government integration pie for the company.

Now all the company has to do is live up to the buzz. So far it's talking tough enough, with Leonard Pomata, president of webMethods Federal, projecting a possible doubling of the company's revenue share from government business during the next year.

WebMethods currently makes 5 percent to 10 percent of its total revenues from government business. It eventually wants to increase that to around 25 percent.

"Every potential customer I've talked to over the past few weeks has the problem of stovepiped legacy systems that don't talk to each other," Pomata said. "I feel that [webMethods software] is the secret weapon that was needed for what Don and I tried to do all those years we were" in the government market.

Pomata and Upson, who will be webMethods Federal's vice president of business operations, were previously at federal integrator Litton PRC together — Pomata as president and chief executive officer and Upson as vice president.

Besides these two executives, webMethods has recruited some stellar Beltway names to its federal advisory board.

Alan Balutis, executive director and chief operating officer of the Federation of Government Information Processing Councils and its Industry Advisory Council, is one. Others include Dan Young, who ran Federal Data Corp., and Tom Hewitt, founder of Federal Sources Inc., who will lead the advisory board.

But will all these heavy-hitter names translate into cash-bearing business?

They very well may, according to Joanne Correia, vice president of Gartner Inc.'s Dataquest Inc. software industry research group. WebMethods proved itself in 2001, she said, managing to grow its share of the worldwide integration "broker suite" market by 15 percent, in what proved to be a turbulent year.

"And the truth is that both government and private businesses are realizing they need to integrate their legacy back-end systems before they can do e-commerce," she said.

There will be competition, some of it heavy — from IBM Corp., for example, which leads the world listings of integration software providers with 13 percent of the 2001 market (as gauged by Gartner Dataquest's review of new license revenues). WebMethods came in third, with 9 percent, while Tibco Software Inc. took the runner-up spot with 12 percent.

"IBM and BEA [Systems Inc.] could be the toughest competition for webMethods, and even Microsoft [Corp.] might emerge at some point," said Eric Austvold of AMR Research Inc. "The good thing for webMethods is that it has one of the best overall [positions] in the market [and a] great overall vision."

What webMethods is hoping will boost its cause is an already sizable base of federal customers, including the Army, Navy and Air Force, the Defense Finance and Accounting Service, the Transportation Department, the General Services Administration and the Environmental Protection Agency.

"And, of all of the companies who are trying to expand into this market, webMethods has already been sitting in the Beltway for some time," Correia said. "It has strong partnerships with many of the federal integrators, and those kinds of channels [into government] will be key."

Pomata expects about 80 percent of webMethods' new government business to come through these partnerships.

Robinson is a freelance journalist based in Portland, Ore. He can be reached at hullite@mindspring.com.

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WebMethods

Established: 1996.

Headquarters: Fairfax, Va.

Number of employees: More than 900 worldwide.

Financials: Loss of $82.7 million on revenues of $196 million in fiscal 2002 — compared to a $131.6 million loss on revenues of $202 million in fiscal 2001.

Key executives: Phillip Merrick, founder, chairman and chief executive officer; David Mitchell, president and chief operating officer; Leonard Pomata, president, webMethods Federal; and Don Upson, vice president of business operations, webMethods Federal.

Major federal customers: Defense Department and all three military services, Environmental Protection Agency, NASA, National Security Agency.

About the Author

Brian Robinson is a freelance writer based in Portland, Ore.

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