Winds Swirl Around Business Integration
But what is this space? What is the current state of the sector? Perhaps most importantly, where is it going? Depending on who you ask, the niche has existed on some level for years, in terms like enterprise application integration (within the network), or business-to-business integration outside the firewall (occasionally known as ebusiness). But experts in the field now say all of these categories may be lumped under one moniker, business integration.
Not to be confused with that other "BI" (business intelligence), the business integration space can be defined as facilitating the ability to link business data -- both structured (i.e. supply chain management) and unstructured (i.e. word processing and other text-based documents) -- from one application to another under what are increasingly heterogeneous network and computing environments with some semblance of messaging and transaction integrity. It has its roots in transaction platforms, such as BEA's Tuxedo, or IBM's CISC technology.
Stephen O'Grady, senior analyst with research firm Redmonk, said a simple way to look at it is that it involves getting older computer systems to work with newer ones. Say a vendor is relying on an old system to make sure its purchase orders go through, but he wants to employ new, more modern technology. He would either need to rip out the old systems and replace them, which is a costly no-no, O'Grady said, or write something in the middle to glue them together -- a sound infrastructure to make sure the applications work to relay the right information across the proper channels effectively. This, O'Grady told internetnews.com, is incredibly challenging because of the ever-increasing wealth of information that exists on the systems.
"We now have the ability to use better integration infrastructure for such data as customer resource management, enterprise resource planning and supply chain management," O'Grady continued. "We can give new life to older applications. For example, large enterprise 500 customers that have older point applications may get these integrated in an enterprise portal so they don't have to rip and replace or junk it. With business intelligence, we can open applications to people that never had access before. With more electronically-enabled processes and improved workflow, people can manage data easier with less possibility of lost data.
Joanne Morin Correia, Vice President, Research Director and Editor-in-Chief Software Industry Spotlight at Gartner, articulated business integration in a similar manner.
"The bulk of integration is with structured, corporate databases. Look at today's world. Businesses run on top of data supply chain management systems. All that info sits in databases from Oracle or PeopleSoft..."
Correia said it used to be that structured applications built on top of databases were closed and proprietary systems geared to solve one problem. That was the 1990s. Now, she said, the bulk of money spent on such systems between now and 2007 will be spent on pulling info in and out of those systems. Correia said CIOs are looking at business processes they need to execute, as well as how and why they need to do it.
"The questions are 'What is the process and is it automated in the system'?. 'What do I prioritize and what not to tackle?'" These queries, she said, make for lucrative business opportunities with integration software sales averaging $300,000 to $1 million a pop.
Correia echoed O'Grady when she said firms are not ripping and replacing systems they installed just four years ago. Instead, they are finding ways to integrate them with new technologies to reap a stronger return-on-investment.
"We see two markets," Correia explained. "We see new systems being built and we see those saying 'I'm going to integrate what I already have.' Those building new systems are going to build a portal with e-commerce and integrate it to the backend."
"Why do we need business integration software? There is a bunch of different answers, but basically the more information out there, the more applications that are written to accommodate such things as business intelligence, data modeling, data warehousing," O'Grady explained. "There are so many mechanisms."
The Players There are a handful of huge players in the business integration software space, but consider the old standbys, such as webMethods, Tibco, and SeeBeyond and the younger ones, such as BEA Systems and Oracle. What are the differences? webMethods, Tibco and SeeBeyond are pure-play integration outfits whose focus is taking old systems and grafting them to the new ones. The newer entrants to the integration game are taking new technologies and mixing them with the old to get the same integration results. These are different approaches to the same game.
Depending on who you ask, the newer kids on the block, such as BEA and Oracle, top the charts for application servers and databases, respectively. But they have become increasingly aggressive marrying integration capabilities into their products. Correia said the older integration players need to watch out for the newer ones.
The analyst admires the way BEA is handling itself, particularly with regard to its deep partnership with HP, which she said is proving to be quite fruitful (some 23 percent of its revenues from the fourth quarter came from its HP alliance. The San Jose, Calif. firm recently added total integration to its WebLogic Platform. It now has, in beta test, what Correia said is the only toolset that is consistent from portal to application server.
"The new WebLogic platform isn't shipping until late spring, early summer, so they're not tested but [BEA's] vision is good," Correia said. "I like what they're trying to accomplish, and they have momentum with an installed base, but their execution is what I'll be watching."
BEA Director of Product Marketing Brian Mulloy is confident in his firm's ability to deliver practical solutions to real problems, noting that BEA's "control architecture" appeals to customers.
"Simply put, controls encapsulate best practices around connecting to an enterprise application like CRM and ERP, or connecting to a database, a Web service, or even a mainframe," Mulloy said. "Because BEA's controls are extensible, companies can use WebLogic Workshop to design a business process workflow, for example, and with a single click turn that process into a control that is instantly added to their best-practices library. That process then is literally dragged and dropped into their next portal project, or into another higher-level process, or even exposed to a partner as a Web service. So, when we combine a company's practices in a drag-and-drop way that leverages the practices of their strategic IT vendors we are resolving business integration issues. This is a new paradigm. This is how BEA helps companies assemble solutions in a way that significantly lowers integration costs and lets IT meet business goals faster."
Meanwhile, Redwood Shores, Calif.'s Oracle announced major integration additions last November at OracleWorld, and recently said its Oracle9i Application Server is RosettaNet-certified, which means businesses have available to them a Web-based tool for managing enterprise application integration, B2B, Web services, business process management and business activity monitoring.
John Magee, vice president of Oracle9iAS product marketing, described Oracle's approach to integration as such.
"[We're] continuing to add support for integration including the latest Web services standards, adapters for packaged applications, and XML message-based B2B support," Magee told internetnews.com. "The difference with our approach [and that of old school integration firms] is that we're adding integration capabilities into the core application server so they can be easily leveraged by the J2EE developers, the enterprise portal administrators, and so on."
But one would be remiss to leave out IBM from this mix. It is the largest integration software player (thanks in part to scooping up firms such as CrossWorlds Software and Holosofx ), and its focus has increasingly turned toward gluing much of its business integration software onto the WebSphere platform as part of its overarching strategy to deliver e-business on-demand to enterprise customers.
To be sure, Big Blue recently added more tools to WebSphere from Holosofx and CrossWorlds to jazz up its software stack. It has had an application server and an integration server, and doesn't really fit the model of either traditional integration player or the up and comers.
Doug Brown, director of marketing for WebSphere Business Integration, said Big Blue falls somewhere between the old school integrators and new breed of application server makers. Unlike webMethods, it hasn't aligned itself with an open application server and unlike BEA and Oracle, it already had integration capabilities to add to its application server. "We're somewhere in the middle of an upstart and a traditional integrator."
Correia said Armonk, N.Y.-based IBM's big challenge is moving their integration technology to their WebSphere platform. She said one can't bet against IBM because of its strong technology base and thousands of sales people. Still, she said BEA has a lot of open, "green space" it can cover.Different philosophies
Cutthroat competition and new entrants aside, there are myriad challenges facing the business integration space, according to Redmonk's O'Grady, who said "performance, reliability, or scalability is going to be a huge problem."
"What has happened is that proprietary messaging schemas that folks use, such as MQSeries, are not open," O'Grady said. "They're really fast, but closed. Now we have raft of new standards and they are great, but there are new challenges because they are more verbose. XML is a great mechanism, but the catch is that there is a lot more info to be exchanged in these software systems. So if I set up company A and company B and drop the info into company C, it might not transmit. Another challenge is driving cultural change from proprietary to open systems. For example, [enterprise application maker] SAP may not want to talk to database folks. The trick is getting these firms to become more open."
This is a challenge, but one that Gartner's Correia said she sees facing the industry already. She said the story isn't so much anymore that BEA and Oracle are becoming more integrated, but that the enterprise applications providers, including SAP, PeopleSoft and Siebel are all looking to get their fingers in the business integration pie. Correia wonders if the IBMs and webMethods of the world will let them.
Richard Cramer, Senior Director of Corporate Marketing at Monrovia, Calif.'s SeeBeyond, whose firm is riding a high from unleashing its most revolutionary integration suite upgrade in three years, said he welcomes the SAPs, PeopleSofts and Siebels to join the integration space. Not only to they lend additional validity to the sector, he said, but the prospect of these companies becoming more open, thereby driving open standards is attractive in terms of the choice SeeBeyond can bring to their customers.
"If the Siebels and SAPs do that, we would sing a song of welcome," Cramer emphatically told internetnews.com. "I fSAP says they're going to make it easier for SAP to integrate in our environment, and if SAP or Siebel exposed everything as Web services, the power that can give to our clients would be great. It just makes it easier for us to work with them. We welcome the day we don't have to compete on adapter libraries, on JCA and Web services, and all that gnarly stuff. The value we would bring to our customers would go up proportionally, with the time we didn't have to spend on adapters."
BEA's Mulloy said the hurdles he expects his company to face center around the idea that customers will be wondering who integrates the integration.
"They are looking for the following: commercial off-the-shelf integration software products that can address the full range of integration problems. And at the same time, these products must be easier to use and deploy than traditional software integration products. Essentially its about solving challenging business problems at a faster time to value," Mulloy said. "Also customers are seriously evaluating the viability of the vendors who supply them their important integration capabilities. They are looking for a compelling vision of business integration from a vendor who will be there long term. They want the tools & services to help their developers become integrators so that they can leverage state-of-the-industry technology that is open and standards-based, with inherent XML capabilities, Web services and J2EE."
Mulloy also pulled the proprietary card thrown out by O'Grady and Correia, noting that traditional EAI products were sometimes shied away from because customers have opted to develop and integrate applications and business processes in-house, something BEA has done with its products, rather than buy commercial, off-the-shelf integration software products.
Oracle's Magee discussed his firm's business integration challenges, noting that the drive toward XML-based standards for integration is putting the traditional stand-alone integration vendors under increasing pressure to justify the high prices they charge for what they offer. This iteration of his firm's stance is akin to Mulloy's and points out the interesting parallel between firms trying new approaches to integration and traditional integration players. To be sure, Magee said Oracle's challenges were created by the proprietary systems of those firms.
"... these companies are selling point solutions and don't offer a complete software infrastructure that can automate processes that span these different end points they're connecting," Magee said. "These challenges present opportunities for Oracle as an integration vendor because we've taken the approach of providing integration built into our products. So, for example, when you buy Oracle9iAS for your enterprise portal, you can take advantage of the built-in workflow and application integration capabilities to automate your business processes and applications. When you buy an Oracle9i Database, it has EII built in. When you buy E-Business Suite, it comes with integration to other applications out of the box. Its all meant to work together from day one, and there's no need for expensive, stand-alone integration software to be stuck on later.
What does the future hold for Oracle?
Magee said the next release of Oracle9i Application Server has a wide range of enhanced features for modeling and integrating business processes that span different end points and integration standards.
"Going forward, one of the areas we're particularly focused on is management software that makes it easier to set up integration architectures, do testing and performance analysis, and administer them much more cost-effectively," he said.
webMethods, whom O'Grady said he likes for its recent alliance with standalone application server maker JBoss and traction in the government sector, is staunchly defending its turf.
Jim Green, executive vice president of product development and chief technology officer at webMethods, isn't too afraid of the BEAs and the Oracles. Nor does he seem very cowed by IBM for that matter. Preparing for another major product push, Green said webMethods has very concrete ideas about what it wants to do next. But he also conceded the challenges presented to the Fairfax, Va. firm by the different industries. For example, in the B2B space, the automotive industry adheres to ebXML, the consumer goods industry adheres to UCCNET, and Walmart relies on EDI. The different protocols mean different integration challenges.
"Bundling in JBoss, where we can support J2EE within our integration system, has turned into one of the more salient points of the day," Green said. "Can you can combine integration and application servers? Now, BEA thinks the whole world should sit on top of WebLogic, but J2EE is not designed for integration. We think they're trying to use it for something it's not intended for. Our model is to incorporate a variety of standards because that is what it is about.
On the inclusion of Web services, Green said care needs to be taken as large corporations move forward into the Web services world.
"Companies are out there wondering am I going to listen to Microsoft .NET, or am I going to listen to IBM, Sun, or BEA preaching J2EE. You actually have three to worry about. There is the legacy systems that have been wrapped up to include the WSDL interface, plus .NET and J2EE."
Green said what webMethods is working toward now, is building integration software that will make room for all three in an IT architecture.
IBM's Brown said while webMethods is aligning itself with JBoss and BEA and Oracle are layering integration on their platforms, the next step for IBM is grasping business activity monitoring technology, which allows businesses to capture events in "real-time" and react to them quickly, and linking its integration and middelware to it. Brown said there are a lot of small firms out there doing it now.
"The other thing is, our WebSphere application server has process application capabilities customers can use to build and finish process flows, and we want to use WebSphere V as a component of our business integration server," Brown said. "Our vision is to differentiate ourselves using a different set of integrated tools based on the user, but also having an application server that integrates our process flows, with customers using whatever they invest in today on top of core products going forward.
Growth prospects for business integration software
"Where do I see the integration market in 5 years?" O'Grady said. "It's only going to get bigger and it is definitely a multi-billion dollar market. As people get more customers, we would predict substantial growth. It's very lucrative."
Both O'Grady and Correia believe the path to that growth will be littered with consolidation, as well as the convergence of platforms and standards the vendors spoke about. Specifically, Correia said the application integration space has hit stalled in terms of copious spending -- a byproduct of the economy -- but that it should improve in the long run.
Correia also said the leaders in this space must take advantage of their strength and look to partner with or acquire pure-play vendors that can fill functionality gaps in their solution offerings or bring access to new customers. To be sure, the standalone players are secure.
"IT spending for integration technology will increase at normal market growth rates, not the hypergrowth rates seen in 1999 and 2000. This means that demand will be strong and healthy as the integration challenge continues into the near future," Correia said. "The impact of the economy and the renewed focus of the large software vendors with huge amounts of resources in installed base and in cash reserves will cause more competitive pressure for additional product features and more price discounting."
"This comes at a bad time for some of the pure-play application integration and middleware (AIM) and portal vendors as they struggle to keep their cash flow positive and costs under control," she continued. "This war is not going to be won with the best technology, but with good vertical expertise with strong sales, service and channel partners, and the ability to capture revenue from other geographic regions beyond the United States. This plays well to the large global software companies such as IBM, Oracle and BEA."