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Jacada buys CNT's Propelis for business tools

Computer Network Technology is selling Propelis Software to Jacada for $6 million in cash. Propelis develops and sells enterprise application integration (EAI) and business process management (BPM) software.

San Francisco - Jacada is attempting to widen its focus beyond adding Web-based interfaces to mainframe applications, and has furthered its cause through acquisition. This week, the company agreed to acquire Propelis, the systems integration arm of Computer Network Technology, for $6m and the assumption of liabilities.

Propelis had developed enterprise application integration and business process management software designed to tie together data and processes from multiple legacy applications. BPm, the business process management component previously known as InVista, will be integrated with Jacada's recently announced Jacada Interface Server. According to founder and CEO Gideon Hollander, it "will accelerate our ability to deliver future planned components." Hollander claims Jacada will continue to support existing Propelis customers and that Jacada has bought "all the essential resources" it needs from CNT to make this happen.

The marriage of enterprise integration and BPm software began last year with BEA's acquisition of WebFlow and Tibco's InConcert buy. Since then the deals have come thick and fast, including Vitria (which bought XML Solutions), Iona (NetFish) and Peregrine (Extricity). SeeBeyond has built its own business process software. There are still a few small, independent BPm companies left, such as Dallas, Texas-based Fuegotech, previously known as eTopware.

CNT, best known in the past for its channel extension and legacy software integration business, now plans to focus on its newer storage networking and solutions businesses. Those include managed services based around Tivoli's Storage Manager and the new UltraNet Edge Storage Router for IP-over fiber channel networking. It has been restructuring its operations following a disastrous drop in revenue during its first quarter, and had already indicated that it was looking to divest itself of Propelis. The unit has already been accounted for as a discontinued operation. The new money will be posted as a one-time gain.

Earlier this month, CNT reported second-quarter revenues of $41.6m, still down 6% from the same quarter last year, but 41% up from the $29.4m posted in the first quarter. The renewed growth was driven by increased storage networking sales ? up 109% sequentially ? and the integration of storage management services company Articulent, which CNT acquired for $12m in April. That boosted SAN services and storage management revenues to $11.6m during the quarter, up 171% sequentially. Cost cutting also helped ? CNT's net loss during the second quarter was reduced to $821,000, up from a $3.6m loss in the first quarter.

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