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!

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 – SOA 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