Software AG, the Germany-based application development, middleware and SOA management firm that recently announced its intention to acquire US-based webMethods for $546m, has hit back at rivals’ criticism of the deal in the most assured manner possible: it said it’s going on an aggressive recruitment drive even before the deal closes.
While rival vendors have questioned the overlaps between Software AG and its target webMethods, Software AG sought to dispel any notion that the acquisition will see it slash headcount, by releasing news that it has embarked on an aggressive recruitment drive that it hopes will see it double its current sales team.
The firm said demand for SOA skills and technology is booming. 70% of IT directors said they plan to implement strategies to improve the sharing of business data and processes over the next year, said Jim Close, UK country manager at Software AG. 79% of those said they would use SOA technology to do so, which further demonstrates the high demand within the market.
Recruitment of high quality professionals has always been a top priority for us, as it has helped maintain our position as a European leader within the industry, said Close. It is important to get fresh perspectives and expertise into the business to achieve our expansion goals. Recruiting the top people is key to our success and will form a vital part of meeting market demands and client needs.
Since Software AG saw revenue growth of 10% to 482m euros and income of 73m euros for the year ending Dec 31 2006, it’s not surprising that it is recruiting. Or at least, it wouldn’t be if it had not announced its intention to acquire webMethods, which had around 850 staff worldwide at last count.
Few companies would be so brave as to play up a recruitment drive in advance of an acquisition closing, not least because investors want to see the value of the deal cemented by an improvement in the target company’s profitability, which usually only comes from headcount reduction.
It’s still possible there will be some back office staff reduction once the deal closes of course, even if Software AG is expanding overall and doubling its sales presence. But the manner of Software AG’s announcement is clearly designed to send a message to rivals like Tibco whose CEO told us recently that Software AG’s acquisition of webMethods is like tying two stones together and hoping they will float. Software AG’s release yesterday could loosely be translated as, Bring it on.