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Web server technology market shrinks

Everywhere Development is the latest to fall victim as the Web application server technology market becomes the incredible shrinking market.

The Web application server technology market is becoming the incredible shrinking market.

A rash of acquisitions is cutting down the market from a swarm of independent vendors to just a handful. The latest company to fall is Everyware Development, a Toronto-based maker of Internet application development and Web analysis software. Pervasive Software in Austin, Texas, today snatched up Everyware for $10.75 million.

The deal comes on the heels of BEA System's $192 million purchase earlier this week of Web application server maker WebLogic, Sun Microsystem's $160 million acquisition in July of NetDynamics, and Netscape Communication's purchase last year of Kiva Software for $180 million.

"Why are major companies willing to shell out mega-bucks for these little companies?" asked Martin Marshall, analyst at Zona Research in Redwood City, California. "Primarily because these companies have field-proven transactional Web server technology and some handy tools for accelerating the process."

But Marshall said there is also a deeper reason and that is to buy themselves time.

"It would take approximately two years or more for each of them to develop similar software and achieve the field-proven confidence of customer experience," he added.

While not quite in the same league as Sun, Netscape, or BEA, Pervasive's software does find its way into some big name products. Pervasive makes "ultralight" embedded databases that can be found in such major league software systems as Novell's NetWare or PeachTree Software's financial accounting applications.

For its almost $11 million, Pervasive gains Everyware's Tango tool for building and deploying Web application servers.

In a similar move, Progress Software, which operates in the same market as Pervasive, announced today the latest version of its Apptivity application server is ready for market.

Apptivity Version 3.0, the Java application server, is scheduled to begin shipping in the next 45 days. Apptivity Developer costs $995, the application server is $10,000, and the Enterprise started edition is $15,000.

Pervasive is expected to close its deal next month pending stockholder and government approval.