XML start-ups use buddy system
Makers of specialized XML hardware devices, intended to add security and acceleration to Web services, sign on with industry heavyweights to extend their sales reach and add credibility.
The companies say their devices provide security and accelerate the performance of Extensible Markup Language (XML) network traffic for Web services applications. Companies that provide XML-specific hardware devices include DataPower Technology, Forum Systems, Sarvega and Westbridge Technology, according to analysts.
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Forum Systems on Monday said a division of Lockheed Martin will resell Forum's security hardware device as part of an application to share information within government agencies.
And last week, Sarvega signed a distribution deal with Arrow Electronics, which sells embedded computing gear to manufacturers.
These companies' sales strategies reflect the need for smaller, specialized outfits to partner with established technology providers in order to gain access to an existing sales channel, according to analysts. Partnerships with larger firms also ease potential customers' concerns over the viability of small companies.
"We've had customers say to us, 'We love your product, but it's difficult to buy from a start-up. We have a safe-choice issue,'" said Eugene Kuznetsov, chairman and chief technology officer of DataPower.
Kuznetsov said that because XML-related hardware is an emerging market, start-ups will have to partner with larger players or risk being marginalized. Larger companies are interested in these smaller companies, because they offer specialized capabilities, he said.
Lockheed Martin chose Forum's XML security and traffic acceleration hardware to replace existing components Lockheed Martin had developed in-house, said Dennis Groseclose, deputy vice president of homeland security solutions at Lockheed Martin. The hardware will be used as part of the company's Radiant Trust product line, due early next year, which is a data exchange system for setting policies on how information can be shared with government agencies.
"We're systems integrators. We would much rather find an honest, hard-working partner than invest in our own technology sometimes," Groseclose said.
The partnerships help put start-ups on the map but can't guarantee long-term survival in a highly competitive market, said Kuznetsov. "All the big players are doing evaluations (of smaller companies) and doing bake-offs. They don't want to partner with five or six start-ups. We know that's not sustainable."