WebMethods
| Company type | Subsidiary |
|---|---|
| Industry | Enterprise software |
| Founded | 1996 |
| Founder | Phillip Merrick, Caren Merrick |
| Fate | Acquired by Software AG (2007), acquired by IBM (2024) |
| Headquarters | Reston, Virginia , United States |
| Products | Application integration, business process connectivity, B2B partner collaboration software |
| Parent | IBM |
webMethods was a company focused on enterprise software, specializing in application integration, business process connectivity, and B2B partner collaboration.
Established in 1996, the company developed solutions that allowed organizations to link software applications through web services. Upon its public offering in 2000, its stock price soared by more than 500%.
In 2007, Software AG purchased webMethods for $546 million, incorporating it as a subsidiary. By 2010, webMethods contributed almost half of Software AG's total revenue. The brand persists as a comprehensive suite supporting process optimization, service-oriented architecture (SOA), IT modernization efforts, and business integration.
In July 2024, IBM finalized its acquisition of webMethods along with associated product lines.
History
Phillip Merrick (CEO) and Caren Merrick (VP Marketing) launched webMethods in 1996 with the goal of enabling real-time interaction between software applications using Web protocols such as HTTP and XML. Their initial offering was the Web Automation Server, which was later succeeded by the commercially successful webMethods B2B Server (Integration Server).
Starting with self-funding and operating from their residence in Fairfax, Virginia, by 1999 webMethods had secured clients like DHL Express, Dell, Dun & Bradstreet, and Hewlett-Packard. This growth was supported by venture capital investments from Mayfield Fund and FBR Technology Venture Partners. Collaborating with SAP AG, they developed the SAP Business Connector integration solution. Revenue expanded from $500,000 in 1997 to $14 million in 1999 and reached $202 million by 2001.
webMethods went public on NASDAQ in February 2000. The IPO price rose from $13 to $35 before the offering and closed its first trading day above $212 per share, valuing the company close to $7 billion. This sharp increase highlighted the exuberance of the dot-com era.
The proceeds from the IPO financed acquisitions such as Active Software in August 2000 for about $1.3 billion in stock. Earlier that year, Active Software had itself acquired several companies. In January 2001, webMethods purchased IntelliFrame Corporation for approximately $31 million. Despite increasing revenues, operating losses continued during the early 2000s economic downturn.
In October 2003, webMethods acquired three companies specializing in integration technologies—The Mind Electric (known for Glue technology), The Dante Group (provider of business activity monitoring software), and assets of DataChannel from Netegrity (portal technology)—for an aggregate sum near $32 million. That year, Deloitte ranked webMethods as the fourth fastest-growing technology company in North America.
Leadership shifted in October 2004 when David Mitchell took over as CEO from Phillip Merrick amid falling revenues and mounting losses. Subsequent acquisitions included Cerebra, a metadata management company, in August 2006 and Infravio, a software registry developer acquired for $38 million in September 2006.
webMethods played an early role in advancing web service standards such as XML-RPC and created Web Interface Definition Language (WIDL), which was a forerunner to WSDL.
In April 2007, Software AG proposed a $546 million acquisition of webMethods, offering a premium over market value following activist shareholder claims of undervaluation. The transaction closed in June 2007, doubling Software AG’s revenue streams in North America. The webMethods brand remained a key element within Software AG’s suite of offerings.
The release of webMethods version 8.0 occurred in 2009 alongside complementary Software AG products including Centrasite and EntireX. By 2010, the webMethods business process excellence unit generated revenues of $668 million, playing a significant role in Software AG’s profitability.
In 2011, co-founder Caren Merrick ran unsuccessfully for the Virginia state senate, highlighting her entrepreneurial experience as a "jobs creator."
In 2023, IBM announced plans to acquire webMethods and StreamSets from Software AG, completing the acquisition on July 1, 2024.
webMethods Integration Server Releases
- IBM webMethods Integration Server version 11.1 - October 2024 (LINK)
Related topics
External resources
- webMethods official product page
- webMethods Integration Free Trial – Accessible through registration.
- webMethods Technical Community – IBM's TechXchange forum dedicated to webMethods users.
- webMethods Integration – Cloud-based iPaaS platform offering Free Trial and Free Forever plans, with no installation or maintenance required by customers.