Vitria scoops up XML software company

Vitria boosted its software integration offerings Monday by buying start-up XMLSolutions for $15 million.

With the acquisition, Vitria hopes to better compete against rivals SeeBeyond, Tibco, WebMethods and others in the fast-growing market for business integration software.

Vitria builds e-business software that allows companies to connect their different computing systems, so they can exchange data and conduct business over the Web. With the explosion of e-business, companies are trying to link customers, partners, suppliers and employees. But to do so, they need to integrate business software never meant to communicate with each other.

IBM, Microsoft and other big software makers are recent entrants in the integration software market, which is expected to reach $5.4 billion in sales by 2004, according to the Yankee Group.

XMLSolutions, a two-year-old start-up, builds software based on XML (Extensible Markup Language), a popular Web standard for businesses to exchange information with each other via the Internet.

With XMLSolutions' technology, Vitria can allow companies that use older data-exchange technology, called Electronic Data Interchange (EDI), to start using more flexible and potentially cheaper XML-based software over the Internet, a Vitria representative said Monday.

AMR Research analyst Amy Hedrick said the acquisition makes sense for both companies.

"XMLSolutions is a small company that needed a bigger partner to grow, and Vitria's competitors...are all going into the XML market," Hedrick wrote in a research report Monday. "For a relatively modest sum, Vitria adds XML translators to its bag of integration products."

XMLSolutions has about 100 employees. Vitria expects the deal to close in early April.