Calling all integration experts!

Remember the old Universal Translator as modeled here by the late Mr. Spock? One of the first (or perhaps future?) examples of integration solutions, and certainly one of the most fondly rememberehttp://zagg-blog.s3.amazonaws.com/community/blog/wp-content/uploads/2012/03/12581.jpgd! But at its heart, it is also an almost perfect representation of the integration challenges today. Many years ago, there was EAI (Enterprise Application Integration) which was all about integrating homegrown applications with purchased package applications and/or alien applications brought in from Mergers and Acquisitions activity. The challenge was to find a way to make these applications from different planets communicate with one another to increase return on assets and provide a complete view of enterprise activity. EAI tools appeared from vendors such as TIBCO, SeeBeyond, IBM, Vitria, Progress Software, Software AG and webMethods to mention just a few.

Then there came the SOA initiative. By building computer systems with applications in the form of reusable chunks of business functionality (called services) the integration challenge could be met by enabling different applications to share common services.

Now the eternal wheel is turning once again, with the integration challenge clothed in yet another disguise. This time it is all about integrating systems with completely different usage a resource characteristics such as mobile devices, IoT components and traditional servers, but also applications of completely new types such as mobile apps and cloud-based SaaS solutions. In an echo of the past, lines of business are increasingly going out and buying cloud-based services to solve their immediate business needs, or paying a third-party developer to create the App they want, only to then turn to IT to get them to integrate the new solutions with the corporate systems of record.

Once again the vendors will respond to these user needs, probably extending and redeveloping their existing integration solutions or maybe adding new pieces where required. But as you look for potential partners to help you with this next wave of integration challenges, it is worth keeping in mind possibly the most important fact of all; a fact that has been evident throughout the decades of integration challenges to date. Every single time the integration challenge has surged to the top of the priority list, the key differentiator contributing to eventual success is not the smarts built into the tools and software / appliances on offer. Rather it is all about the advice and guidance you can get from people with extensive experience in integration challenges. Whether from vendors or service providers, these skills are absolutely essential. When it comes down to it, the technical challenges of integration are just the tip of the iceberg; all the real challenges are how you plan what you are going to do and how you work across disciplines and departments to ensure the solution is right for your company. You don’t have the time to learn this – find a partner who has spent years steeped in integration and listen to what they have to say!

Oracle BPM improving

I sat in on the latest Oracle webinar yesterday to hear about its latest developments with its Oracle BPM offering. http://upload.wikimedia.org/wikipedia/commons/1/15/Tick-red.pngI have to say I was pleasantly surprised. I have been a little harsh in the past about Oracle BPM, but it seems Oracle is finally getting its BPM act together. Process Composer (the Oracle ‘business user’ environment) now offers Oracle BPM Web Forms, an intuitive and easy to use tool to allow user forms to quickly be assembled. The business analyst or architect can assemble whatever user form makes the most sense for each step of the workflow, using a palette of handy selections for such elements as phone numbers, addresses, text input boxes etc.. The mechanism for adding a rule into a process flow is also pretty simple, although of course it assumes a developer has already set up the relevant options for rule specification. Oracle has even started to add Process Accelerators to provide process templates for a small selection of business needs, for example employee onboarding.

I did get one surprise though – this may not be new, but it certainly was to me. Apparently, as well as offering the ability to run Oracle BPM on Oracle’s WebLogic Suite, Oracle also supports IBM WebSphere as the application server layer ūüėģ

webMethods gets MDM with Data Foundations acquisition

Software AG, the owner of the popular webMethods suite of SOA and BPM products, has acquired Data Foundations, the US-based Master Data Management (MDM) vendor. This is a great acquisition, because the single version of the truth provided by MDM technology is often an essential component of business process management applications.

The only issue is that there is an element of catch-up here, since major BPM/SOA vendors like IBM and Oracle have had MDM capabilities for some time. But putting that aside, the fit between Data Foundations, Inc. and Software AG looks very neat. There is no product overlap to worry about, and the Data Foundations solution excels in one of the key areas that is also a strength for Software AG – that of Governance. Software AG offers one of the best governance solutions in the industry, built around its CentraSite technology, and Data Foundations has also made governance a major focus, which should result in a strong and effective marriage between the two technology bases. From a user perspective, MDM brings major benefits to business process implementations controlled through BPM technology, because the data accuracy and uniqueness enables more efficient solutions, eliminating duplication of work and effort while avoiding the customer relations disaster of marketing to the same customer multiple times.

Good job Software AG.

Progress Software acquires Savvion

handshakeSo Progress Software has bought yet another software company; this time a BPM vendor, Savvion. But is this the right move for Progress?

Progress Software has spent most of its life growing through acquisition, making use of the piles of cash generated by its legacy mid-range database product to find new areas of growth. After all, the legacy business may be highly profitable, but its returms are dwindling by the year and Porgress desperately needs something else to shore up its balance sheet. Unfortunately its acquisitions have had a bit of a patchy record of success. Perhaps it will be different this time.

Savvion is a credible BPM (Business Process Management) software provider, and 2009 was a bumper year for BPM sales. Specialist companies like Pegasystems and Lombardi showed huge growth rates, bucking the downward trend triggered across many technology sectors by the economic upheaval. On top of this, Progress has been trying to establish itself as a viable SOA (Service Oriented Architecture) and business integration vendor ever since it launched the Sonic ESB in the early years of the last decade, and BPM was a glaring hole in its portfolio. For these reasons, it is easy to see why Savvion would seem a good fit.

There seem to be two problems for Progress, however.¬†Firstly, BPM is now rarely a solution bought in¬†its own right – hence¬†the rapid consolidation of the BPM market with Pegasystems more or less the only major¬†oure-play BPM left standing following IBM’s acquisition of Lombardi. Instead, BPM is deployed more and more as part of a business transformation strategy involving components such as SOA, application and data integration, business rules, business monitoring¬†and business¬†events management. ¬†Secondly, the¬†gorillas in the space are now IBM, Oracle and SAP. These companies all offer a full suite of products and more importantly services based around BPM and the rest of the modern infrastructure stack. Companies such as Software AG, TIBCO and Axway form a credible second tier, too.

In previous acquisitions, Progress has treated each acqusition as purely software products. This is not surprising, since selling databases is more about selling products than selling solutions. However, it is this factor that has been at the root of the patchy performance of Progress acquisitions. For instance, the Data Direct division of Progress, where it placed a number of acquisitions in the data space, has fared reasonably well. This is because it is more of a product business. However its attempts in areas such as ESBs and SOA governance have suffered due to a seeming reluctance to embrace a more industry-specific, services-based solution model.

With its acqusition of Savvion, Progress once again has the chance to try to show the market that it has learnt from its mistakes. BPM is absolutely an area where companies need to be offered solutions Рproducts together with services and guidance to develop effective and affordable business solutions. It will be hard enough for Progress to cut a share of the BPM pie with all the big players involved, but it does have one outstanding advantage; it has a strong and accessible customer base in the mid-range market where the larger companies struggle. However, if it fails to take on board the need to hire industryvertical skills and solution-based field and service professionals then this acquisition could prove to be yet another lost opportunity.

Steve

IBM acquires Lombardi to reinforce its BPM solutions

contractIBM has agreed an acqusition of Lomardi, one of the few remaining pure-play BPM suppliers, with target of closing the deal in 2010.

IBM has reaffirmed its position of strength in the burgeoning Business Process Management (BPM) space with this acquisition. Lombardi has three assets that IBM is particularly interested in; its human-centric BPM capabilities, its extensive professional services resources and its reputation and success with BPM at the departmental level.

For the uninitiated, business processes tend to span some or all of three distinct areas of usage Рhuman-oriented processes, document-oriented processes and prorgram-oriented processes. Human processes involve such aspects as task lists that people use as they carry out their assigned tasks, document processes upgrade traditional paper-oriented models and program-based processes involve the dynamic interaction of applications. IBM has always been most experienced at dealing with program-to-program interaction, delivering its own WebSphere BPM offering. A few years ago it also acquired FileNet, a major player in document-based processing that had document-related BPM products. Now it is making the Lombardi acquisition to strengthen its human interaction BPM capabilities.

This is an exciting acquisition, closing out the weakest areas of IBM’s BPM¬†solutions. However, the challenge for IBM will be to properly integrate the new product set with its existing BPM offerings. Frankly, IBM has not done a good job to date on this with its previous BPM acquisition of FileNet – IBM marketing collateral exhibits¬†confusion over what are essentially two differnent product solutions that both claim to be BPM. Hopefully it will handle the Lombardi acquisition better.

Steve

Software AG sitting pretty?

Software AG seems to be defying predictions and surprising the market at every turn.

Once seen as a sleepy European software house based largely around legacy system technologies, it has taken major strides to transform itself into a major global software industry player. Its acquisition of webMethods a few years ago surprised the market, with many analysts unconvinced that it could make a go of the move into integration / SOA middleware, but it has done a fair job of building some momentum by tying the webMethods portfolio up with its own CentraSite governance technology, providing service-oriented architecture (SOA) with integrated governance.

Then it once again shocked the market¬†by snatching IDS Scheer, the well-known supplier¬†of modelling tools, from under SAP’s nose. Given that the IDS Scheer technology is used by most of the major SOA suppliers across the world for modelling, and in particular is a key part of the SAP portfolio, this would appear to give Software AG lots of¬†cross-sell opportunities across the two customer bases and throughout the SAP world.

Now it has announced its 2Q09 results, and they make pretty good reading ont he surface. A 9% increase in product revenues is particularly noteworthy give that so many companies are struggling to show any year-on-year growth in product sales. However, before getting too carried away it is worth delving a little deeper into the numbers. The product revenue numbers include maintenance as well as license sales. Licensesales actually fell, as with most other companies. Maintenance revenues jumped by 20% Рdoes this mean that the company has built a much larger maintenance base, or is it actually a reflection of a more aggressive pricing policy? Then there is the split between the legacy business (ETS) and the SOA/BPM business(webMethods). License revenues in this segment were down 15% Рnot very encouraging since this is the strategic business unit. Also, it is noticeable that maintenance revenue in each segment increased by about 20%, suggesting that this rise does indeed reflect a price hike.

However, taking all this into consideration, Software AG is still looking to have moved forward substantially from a few years ago, and assuming the IDS Scheer acquisition goes through OK there should be lots of opportunities for the company. Of course, a cynic might point out that by adding IDS Scheer to the webMethods portfolio, the company has made itself a highly attractive acquisition target to someone Рperhaps SAP?!

Steve

The forgotten SOA benefit – Visibility

There has been a lot of chatter recently about measuring SOA ROI – take a look at Loraine Lawson’s recent blog for instance.

or Gartner’s¬†results of a UK-based survey of SOA adopters. However, one¬†of the benefits that I think a lot of people miss, or do not attribute enough¬†importance to at least, is Visibility.

Basically, the visibility story goes that with SOA, since you break up operational components into discrete business services, then it becomes easy to monitor entry and exit to these services and hence business operations flow. This gives a clear picture in business terms of execution and performance Рnot just what is happening, or how many times, but HOW business is being carried out.

Gartner did touch upon visibility,

Improved Efficiency in Business Processes Execution – Isolating the business logic from the functional application work enables a clearer view of what a process is, and the rules to which it adheres. This can be measured by lower process administrative costs, higher visibility on existing/running business processes, and reduced number of manual, paper-based steps; better service-level effectiveness; quicker implementation of process iterative or of variants of the same process for different contexts.

However, the Gartner focus was only on visibility as it relates to execution efficiency.¬†In fact, SOA-based visibility offers another benefit which, in today’s tough times particularly,¬†can be a real big hitter for executive management. It enables management to see how process are being executed – in other words, it provides the ideal tool to monitor compliance against a growing raft of regulatory requirements across just about every industry. In order to demonstrate that your systems comply, it is necessary to be able to see what they are doing and how they are doing it. This is what SOA delivers.

So how does improved compliance management fit into the ROI picture? True, it is very hard to attach a dollar amount to compliance – however it certainly matters. With the amount of public and political scrutiny of corporations today, it is absolutely imperative that executives can show they are faithfully adhering to regulations and guidelines. Failure to do so will not only risk severe penalties, but¬†also probably lose them their jobs! Now THAT’s a compelling business case….

Steve

BPM is flying off the shelves – at least at Pegasystems

It’s always nice to be proved right. At the end of 2008, when Lustratus published its 2009 predictions for the infrastructure market, we highlighted BPM and predicted that 2009 would (at last) be its year.

In March I discussed the impressive 2008 for Pegasystemsin a previous Litebytes post, and now the company has made its 1Q09 announcement of earnings.

Briefly, we are talking about revenue increasing¬†29% YOY to $62.4M for the quarter, and¬†license revenue up a storming 60% to $28M. Recession – what recession? Admittedly the results were skewed a little by a single large deal closing at around 12% of the total,¬†which may put Pega under pressure for the next quarter, but this cannot disguise the¬†point we made in our 2009 predictions –¬†tactical, targeted BPM can deliver the real savings and¬†flexibility to support broadening customer bases and types that¬†businesses are looking for in the current economic downturn, or can respond to specific business channels such as tracking and reducing fraud.

The other point that these results reaffirm is that companies are looking for solutions that are geared to their own industry vertical needs – Pegasystems has a strong industry framework philosophy that responds to this need very effectively.¬†The only possible ‘cloud’ on the horizon seems to be Peagsystems’ tentative move towards the dangerous ‘Platform-as-a-Service’ (PaaS)¬†market segment – this area is a¬†minefield at the moment and¬†it is to be hoped that Pega do not find themselves sucked into the abyss by getting to wedded to this idea. Just stick to what you do¬†best, guys!

In summary, for all those companies who have heard about BPM and then shied away, put off by the thought of the effort required to deployBPM across the enterprise for all processes, take another look with a tactical, laser-focused mind-set. BPM really can be selectively applied at a reasonable price, with rapid payback and an attractive ongoing benefit stream.

Steve

What software buyers are looking for in 2009

With the global downturn in full swing, there are a lot of concerns over how software markets will perfom.

However, one trend is emerging as a vital ingredient if software companies are to succeed, and those companies that have recognized it are already benefiting.

Software buyers in 2009 are finding an industry vertical specialization to be essential to support any investment justification. The problem for many users is that although the technologies and products available offer the same sorts of benefits as before, in order to get any purchase through the system it has become critical to have a strong business backing all the way. Nothing will move if a business sponsor is not pushing for it. Of course, investments have always had to be justified, and a business alignment is a key part of this process, but in the economic downturn this focus has moved from being part of the justification to being the overriding element. A business sponsor has to be brought on board right at the beginning if the particular project has any chance of success.

As a result, companies that do more than pay lip-service to describing business benefits are prospering. The software vendors that offer truly vertical solutions, tuned for particular industry needs and taken to market by field teams with the relevant industry domain knowledge, are the ones that are succeeding. One proof point is Pegasystems, who I blogged about a few days ago. Onereason that Pegasystems has maintained such strong growth in 2008 with its BPM offerings is a strong industry vertical sensitivity. 

Another excellent example is IBM and in particular its Information Management division. Information Management software is regarded as unsexy – although still important, it has tended to be neglected in the rush towards application-oriented strategies and initiatives. Enter a new IBM management team that has restructured the go-to-market approach for Information Management software to an industry-vertical one, generating models of particular industry challenges and processes, looking at the specific needs of these industries and carrying the industry-vertical business messages to prospective buyers. Whether serendipitous or the result of impressiveexecutive insight, this approach has almost exactly dovetailed with the software buyers’ needs for a more relevant, industry-related message in order to secure investment. The result is that IBM is claiming significant sales and successes in its information management software business segment, even in the current environment. 

Other software companies would do well to take note. If you want to sell software this year, you have to help your prospective buyers by going to market with clearly aligned business vertical offerings and messages.

Steve   

Pegasystems points the way forward

There is a lot of chatter in the blogosphere at the moment about whether SOA (service-oriented architecture) has run out of steam – whether companies have stopped investing in it, got disillusioned with it or cast it aside for the latest new thing.

For me, this is a silly discussion РSOA is about a way of doing things more sensibly, just as structured program was many years ago. It is really all about architecting system design around the concept of a pool of shared services, and cleaning up the linkages between different programs and applications.

So on this basis SOA is not dead, but an active and important architectural underpinning of a number of different initiatives, many of which have been rolled into the ‘SOA’ term – things like BPM (Business Process Management), SaaS (Software as a Service), Business events management, BAM (Business Activity Monitoring and many others. But has the failing world economy stopped the whole SOA family juggernaut in its tracks anyway?

The answer Lustratus picks up from its clients is a resounding NO. BPM in particular seems to be seen as a powerful way to respond to the needs of operating in an economic recession. Indeed, Lustratus pointed to BPM as a shining light in its forecasts for 2009. Validation of this claim is evident when looking at the performance of Pegasystems a major provider of BPM solutions and technologies. Pegasystems is an important indicator of BPM health because it is one of the few remaining pure-play business process software vendors left. In its recent annual results announcement earlier this month, it showed a revenue increase for 2008 of over 30% to over $200M, and importantly a 50% increase in new license revenue. It is in such good financial shape that it has even just announced a quarterly cash dividend! Admittedly it is only paying 3 cents a share, but in these times this is not to be sneezed at.

Of course, these results in isolation may not be conclusive. After all, the Pegasystems rise in sales might simply indicate it is stealing market share from its rivals. However other big BPM players such as IBM are also claiming strong performance in the segment, so it is much more likely these figures shine a light on the way forward for users as they struggle to do more with less, and get a better level of control and governance over their processes.

Steve