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 remembere! 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!

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 – products 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.


Is the time right for Progress Software to be bought?

In the course of my ongoing analysis of software infrastructure vendors I was intrigued by the recent earnings release from Progress Software…

…and it caused me to dig a bit deeper. Basically, Progress is holding its revenue stream although not growing it, and I guess in today’s environment that is OK. But when the performance of the company over the last few years is considered, a different picture starts to build up.

Basically, Progress made a lot of money from its OpenEdge database product, and this business is still providing a rich ‘cash-cow’ revenue stream. However, not only has this stagnated but it is starting to decay, with Q109 showing a sharp drop. Admittedly this is probably in part due to currency movements, but the trend is clear – this is not a growing business ans the writing is on the wall, at least in the longer term. Progress knows this, and so over the past few years it has been on the acquisition trail, trying desperately to find a new business that can grow sufficiently to become the new OpenEdge. It has tried the area of Data, with its DataDirect division growing through acquisition, but this business has reached a steady state with little or no growth. It tried the area of messaging, being the company that brought the term ESB (Enterprise Service Bus) to the world through its SONIC line of business, but having got a great mindshare and market position it lost focus and this business is now fatally damaged, with others such as IBM, Oracle andMicrosoft taking up the mantle. Recently it acquired the APAMA complex event processing business, Actional (SOA management) and IONA (a datedintegration business based in Ireland). It has since found some success with the excellent APAMA offering in the heartland of financial market data processing, but has struggled to replicate this success in other industries and use cases. Actional has also had some success but it is immutably tied to the SOA star which is having its own problems. And IONA, similarly to Progress, has a nice legacy integration business based around Orbix but has failed utterly over the years to create anything else worthwhile.

The result is that although the IONA purchase has increased revenues in the Progress ‘integration infrastructure’ business unit, this is likely to be a one-off improvement and once again Progress is going to be stuck with an aging cash-cow and no clear rising star to take over responsibility for driving growth.

This might seem a recipe for Progress itself to be acquired. Up to now, this has been unattractive due to the share price, but in thecurrent climate the acquisition looks a lot more interesting. My view is that there are probably two strong candidate acquirers for Progress:

  • Companies looking for attractive maintenance businesses where profit can be maximized by cutting expenses and taking the money until the product line sunsets
  • Companies not currently in the integration space but wanting to get into this lucrative area and looking for a ready-made product set (perhaps to underpin a professional services business)

Who knows what will happen in the current turmoil? I may be way off the mark, but if I was a company fitting either of these two categories, and I had the money, I think now would be a good time to strike. After so many false dawns, I suspect the Progress management team might not resist too hard….


    Putting the suit on Social Computing

    I have previously written about the application of Web2.0 technologies to enterprise problems at a general level.

    In the past, I have taken the view that the Web2.0 technologies may be of interest, but the enterprise application of the ‘social computing’ side of Web2.0 was still very immature: the general value of collaboration was clear but how it would be implemented and which pressing business problems it addressed were not.  This lack of maturity was reinforced by fighting talk from some Enterprise 2.0 proponents about changing the way enterprises work by up-ending hierarchies and claiming that when the “facebook generation” moves into the workforce all will be changed.

    However, I think that the concept is now maturing as can be seen from announcements from both BEA and more recently Progress around what BEA calls Enterprise Social Computing and Progress calls Socially Oriented Architectures.  What is promising is that both announcements focus on the application of social computing (and it’s ability to enable fluid communication and information sharing) to solve business problems.  In the case of ESC (an acronyn to make any tech marketeer smile), the application is to the area of process improvement.  As my colleague, Steve Craggs explains in his new insight on ESC and SOA (which is free to download at the moment!):

    “If a company can understand a little more about how employees are solving their day-to-day work-related problems, it should become possible to establish best practices or carry out training to improve employee performance. The traditional approach to solving this problem is to engage an external business process re-engineering expert. However, these experts are both expensive and disruptive. In many cases, the best practice expertise is already there—it is just that it is un-communicated, locked in the heads of one or more expert employees.”

    And of course, it isn’t a huge leap to realize that SOA is a fertile place to start using such an approach – as this requires a high degree of communications across organizational boundaries and involves tech-friendly staff more likely to adopt new concepts like ESC.


    The data deluge: new surf-board required?

    Another report (this time from Tower Group) is highlighting the likely increase in data volumes that enterprises will need to handle over the next couple of years – a 900% increase in financial market data by 2012.

    Of course, increasing amounts of data flowing around the enterprise is hardly new (in the mid 1990s, I remember being told in hushed tones at one of the baby bells that their databases were several terabytes in size).  Each time enterprises have been faced with such an increase, decisions have been made about what needs to be done:  Is the focus on integration, storage or analysis and can we use existing technologies or do we need/want new technologies?

    In the case of The Tower Group  report, the focus is on financial services and in particular the increase in market data handling requirements caused by new regulations (the EU’s MiFiD and US’s Reg NMS – both intended to create fairer markets).   Specifically, there is a regulatory requirement to store the data (in a manner which can be used as evidence if there is ever a compliance issue).  As these regulations relate to best price execution, this in itself will be onerous because every single published quote available when each trade is executed must be stored as well as all other relevant data associated with the trade.

    Similar scenarios (where there is a flood of data or a potential one) exist in many industries – from the online games with millions of players generating massive amounts of data to security monitoring devices for government agencies to RFID tags.  However, it is too easy to react by announcing that the data deluge is coming and some new technological surfboard is needed.

    For a start, in many cases the data may have little potential value and storage may not even be needed.  But of course this will not always be the case.  To quote from the Bob’s guide coverage of the press release:

    “Regulatory compliance will pave the way for firms to completely automate the trading process,” added Price. “Once all the players have done so, the winner in the hunt for liquidity will be whoever can process the data the fastest.”

    To put it another way, in the case of market data there may be business justification for doing more than storage for forensic reasons either in the realm of integration or analysis of the data streams.   In my other examples there will also be opportunities – again in the realm of integration or analysis.
    The second hurdle is whether new technology is needed.

    Simply saying that there will be an increase in data and a need to do something with it is not enough to justify new technology as old technologies may continue to scale.  Going back to my baby bell experience, this was around the time when Object databases were being touted as the relational db killer – as only Object databases could possibly handle that size of database.

    In the case of the “data deluge”, the real-time processing of streams (when the value of the analysis is high enough) is certainly one area where a new approach seems needed – and is an area targeted by the likes of StreamBase and Progress‘ Apama products.  For analysing the increasing massive data warehouses and for integration, I think the jury is still out – although the increasing complexity within the data may throw a spanner in the works.