This emerging market hasn"t been lost on Cisco and others. Last June, Cisco launched an AON (application-oriented networking) initiative. Intel is also in this game, having recently purchased Sarvega, another XML appliance vendor. IBM"s decision to buy one of the leaders in this space signals its intention to compete head-to-head for this future business. (Interestingly, IBM"s press release on the acquisition doesn"t mention AON, perhaps in an effort to try to maintain its friendly relationship with Cisco.)

Not surprisingly, other vendors in the WSI space see IBM"s acquisition as legitimizing the market in a big way. As Frank Martinez, chairman and CEO of WSI vendor Blue Titan remarked: "Application-level service networking just became incredibly valuable and interesting."