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What's Behind the CEP Buying Spree?

With an eye on big data and real-time analytics, Software AG and Tibco announced acquisitions of complex event processing rivals Apama and Streambase, respectively, in the same week.

In move to boost its position in real-time analytics of Big Data, Software AG said it plans to acquire Apama, a complex event processing (CEP) company, from Progress Software.

The sale of Apama to Software AG surfaced only two days after Tibco Software said it plans on buying Streambase Systems, a direct competitor to Apama in the CEP, financial services and capital markets space.

But the trend is also a sign that CEP is becoming part of messaging infrastructure. Over the past four years, a number of small independent CEP companies (i.e., Aleri and Coral8) have merged and then were acquired by the likes of Sybase, IBM and SAP.

The Apama and Streambase deals are the latest signs of that consolidation has reached its final stage in the CEP space. Both acquirers are planning to combine the CEP with their respective low-latency messaging solutions.

"I think it's interesting -- here's Apama and Streambase -- the two major players in CEP being acquired by infrastructure companies," observed Robert Stowsky, senior analyst with Aite Group in Boston.

The Apama acquisition reflects the convergence of big data with CEP, according to Stowsky. Both companies are in the infrastructure area and are trying to position themselves for analyzing big data, he said.

Apama's CEP platform and related products are used to create rules to detect patterns in real-time streaming data. Founded in 1999, Apama's real time analytics have enabled banks, prop trading firms and hedge funds to jump into algorithmic trading, while other use cases were established in compliance and risk management as well as for telecoms, supply chain management and logistics.

Under terms of the deal, Software AG will absorb the Apama technology teams based primarily in Cambridge, England, Bedford, Mass., and Hyderabad, India, as well as the Apama sales and technical teams that support customers in financial services, communications and other markets.

Apama co-founder and Progress Software Chief Technology Officer, Dr. John Bates, will also join Software AG after the acquisition is completed.

Software AG acquired a company called My Channels in 2012, which gave it a low-latency solution called Nirvana. In a tweet yesterday, Bates (@drjohnbates) wrote #Apama + Nirvana = A nice little toy set indeed!”

According to Stowsky and other media reports, Software AG also plans to integrate Apama's CEP technology into Terracotta, its in-memory processing technology so that customers.

According to a story in ZD Net:

Software AG UK director of business architecture Matt Smith said Apama's ability to analyze and make decisions on real-time streamed events complements the way Software AG's Terracotta in-memory processing technology can extract information rapidly from historical data.

"That's the big thing -- putting those two things together. It means rather than just making decisions in the moment, looking at what's happening now based on algorithms, I can start to test theories and start to test things against historical performance and start to create trending," he said.

As for why Progress Software would sell off Apama, Stowksy said Progress has been shedding a number of its divisions over the past couple of years and is going back to its base product line. Progress has sold off other business, such as Sonic, he said.

Meanwhile, Tibco said its acquiring Streambase to bring streaming capabilities into its event-processing portfolio. Streambase brings the ability to rapidly build, test and deploy real-time applications for streaming big data. It is popular on Wall Street for algorithmic trading. Tibco made its name in capital markets during the 1990s when it's publish and subscribe technology was used to move market data to different trading applications.

Stowsky expects to see integration of Streambase's CEP technology with FTL, Tibco's low-latency messaging solution, whose upgrade 3.1 was announced on Tuesday, with advancements like multi-core processors, in-memory architectures and networking technologies like Infiniband and 10 Gigabit Ethernet. Launched in 2010, FTL is an in-memory low latency messaging middleware, which the company said broker the one-microsecond speed barrier for end-to-end application latency.

"Tibco FTL was designed to address the needs of extreme low latent environments such as financial markets, where trades are increasingly performed by high-performance algorithms and where microseconds make a vast difference in delivering results," said Denny Page, Tibco's Chief Engineer, in the FTL 3.1 press release.

Tibco has a strong customer base in capital markets and it's believed that it went after Streambase's real-time analytics to cater to Wall Street firms that want to combine Big Data analysis with high speed trading.

"Tibco sets the standard in low latency messaging, enterprise integration, and visual and computational analytics. Now with streaming event processing and real-time analytics from StreamBase, Tibco's big data platform is the most capable in the industry," commented Mark Palmer, CEO of StreamBase Systems in the press release. Ivy is Editor-at-Large for Advanced Trading and Wall Street & Technology. Ivy is responsible for writing in-depth feature articles, daily blogs and news articles with a focus on automated trading in the capital markets. As an industry expert, Ivy has reported on a myriad ... View Full Bio

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