Consolidation has come to the small-but-growing IT industry niche called CEP -- or complex event processing -- as Aleri Inc. and rival Coral8 Inc. announced today that they have merged. Terms of the deal were not disclosed.
In general, CEP software looks for patterns and correlations in the ocean of electronic transactions, or "events," that occur each day in a business and then triggers responsive actions depending on what is found. For example, the technology could be used by a large online commerce or banking site to spot suspicious activity or make ultrafast trades in response to certain conditions.
Not many companies are involved in CEP right now. Among large platform vendors, the main player is IBM, which bought a company called AptSoft last year in order to acquire its CEP tools. Other vendors include Progress Software Corp., which has a product called Apama.
The merged company will operate under the Aleri name. Aleri CEO Don DeLoach will remain CEO of the merged entity, while Coral8 CEO Terry Cunningham will become Aleri's chairman of the board. After the merger, Aleri will have about 80 customers and will be retaining virtually all of Coral8's employees, said DeLoach.
The deal made sense because the companies have complementary product lines and target markets, DeLoach said.
Coral8, based in Mountain View, Calif., has "done a marvelous job in appealing to developers" with features such as a SQL-like authoring language, DeLoach said. It also has had "a keen eye on distribution channels," not being specific to one market, he added.
Meanwhile, Chicago-based Aleri has sold a "high-end, industrial strength offering" aimed at financial institutions, with its deals tending to be direct sales, DeLoach said.
Over time, Aleri will merge the two engines' code bases while ensuring forward compatibility, he said.
Aleri won't raise prices on the Coral8 engine, which is $20,000 per core, compared to about $30,000 for Aleri's, according to DeLoach.
After the two code bases are merged, Aleri may sell multiple products with varying levels of functionality, he said.
Meanwhile, Aleri is betting that business will boom as the financial sector digs out from the recession and looks for tools to avoid a repeat of the malfeasance and fraud that helped cause the current economic downturn.
Customers are already beginning to apply CEP to such challenges. "One in three projects we're doing lately are dealing with risk," DeLoach said.
"The fundamental nature of CEP allows technologists to do more with less," he added. "Banks are cutting back people, but there's more complexity and speed of information through the market. And there's increased imperative to manage risk and compliance."
Aleri is prepping a new framework for risk management, which will be out later this year, he said.