Lustratus LiteBytes

Archive for February, 2008

I was reading the announcement from Layer7 about its ‘SOA-in-a-box’ for IBM mainframe users, and a number of things struck me.

First, I am SO PLEASED to see someone remembering that CICS is not the only mainframe transaction processing environment in use today. A significant number of large enterprises, particularly in the finance industry, use IBM’s IMS transaction processing system instead. With the strength and penetration of CICS in mainframe enterprises, it sometimes seems like these users have become the forgotten tribe, but investments in IMS are still huge in anyone’s numbers and it is a smart move to cater to them. I am sure that the fact that this solution serves IMS as well as CICS users will be a big plus.

The other point that struck me was that I have felt for some time that, with the security/intrusion detection/firewall/identity management market seeing such a shift to security appliances, it was time vendors thought of piggy-backing functionality onto these platforms. Of course, one reason for having an appliance is to provide a dedicated environment to address issues such as security, but in truth these appliances are rarely used to anywhere near capacity. Therefore it makes a lot of sense to optimize the use of the available processing power rather than slavishly locking it away where it can;t help anyone.

Finally, I have to admit my first reaction to this announcement was to worry about how good connectivity would be to the mainframe. Dealing with mainframes is an arcane area, and I was not aware that Layer7 had any special expertise or credentials here, but I see that GT Software is apparently providing the mainframe integration piece. This makes me a lot happier, since this company has been dealing with mainframes for 20 years. In fact, Lustratus did a review recently on GT Software’s Ivory mainframe SOA tool, which is apparently what is included in the Layer7 box.

Anyway, on behalf of all those IMS users out there, thanks Layer7!

Steve

Some of our recent research at Lustratus has given me the opportunity to talk to a lot of end user companies trying to get going with SOA, and a range of different roles within these users spanning all the way from the programmers to business people.

As a result, I am beginning to wonder whether the only option for SOA implementation is the Stealth model.

Leaving aside those visionary companies who are able to write off large investments on the latest new idea, or on a belief, most companies are forced to take a pragmatic view. As outlined in the Lustratus 2008 forecasts, there is a definite fracturing of SOA-related decision making between the archtiect bodies that see the value clearly, and the business-driven projects that own the budgets but do not see the need to include SOA costs in their business cases. When you think about it, this attitude from the business side of the house is not unreasonable – after all, what does SOA mean to a business unit? The discussions often go like this.

You will get get business agility and flexibility – the ability to respond faster to market changes.

- Oh yeah? When? How much do I have to invest before this happens? When do we reach critical mass? How long do I have to wait? Prove it!

The P&L will improve because we will reduce redundant code and wont write so much new stuff.

- When? What is the payback time? Why have you guys been building duplicate programs anyway? And how does that increase my project budget now, to cover the extra costs you want me to include?

But it is all for the best – honest!

- Do I HAVE to use SOA? Can I do what my project needs without? All I care about is this project, its allocated budget and the returns.

The problem is that SOA actually asks the business user for a lot of faith, just like other major infrastructure changes fo the past. One way around this impasse that many users have started to employ is the ‘SOA by Stealth’ approach. The first step is to get the SOA infrastructure assembled – ESB, Registry etc. These components can sometimes be slipped into projects without arousing suspicion, usually by claiming that the particular project needs it. Breaking the infrastructure up this way avoids the problems caused by a sudden large investment. Then, as each project is done programmers try to gradually turn pieces of functionality into SOA services – as many as can be done without drawing too much attention and impacting the budget too much.

The idea is that eventually it will become possible for IT to assemble the evidence that SOA is actually delivering benefits, at which point it becomes much easier to convince project budget holders to allocate some investment to it. In other words, the hope is that once the boulder starts rolling it

Steve

IONA has just announced that it has received an unsolicited offer to be acquired by an unnamed company.

Over the last week there has been speculation that Software AG is the mysterious buyer.  Software AG buying would make some sense in that it is inline with its vision of building a major integration company through acquisition.  IONA does have an excellent customer base and an interesting SOA OSS play.  On the downside, IONA main business comes from the declining CORBA market and there would also be major overlaps on its closed source SOA side with the already crowded Software AG catalog post its WebMethods acquisition.

However, alternative buyers are less obvious as it is a company in the middle of a difficult transition – attempting to replace its rapidly decreasing CORBA revenue stream with lower than expected growth in its open and closed source SOA product lines.  Which means that I am putting my money on Software AG being the acquirer.

Ronan

p.s. It is beginning to feel like this is becoming a finance blog – rest assured with only Tibco left out there, the current merger wave is bound to come to an end!

Surprising news today – Cape Clear, the Irish ESB vendor, has been bought for an undisclosed sum by the Workday, SaaS start-up providing a range of enterprise applications.

This is a significant event on a number of axes:

While the ESB as a term has grown in popularity, the new vendors touting ESBs have not grown at the same rate. My former home, PolarLake, has repositioned itself to take advantage of a specific niche (Reference Data Distribution in financial services). Now, Cape Clear has disappeared from the ’traditional’ enterprise middleware market to become part of a SaaS play. Other vendors continue to win ESB business of course, but it is fair to say that none have broken out into the major league as might have been expected 5 years ago when ESBs first appeared.

This is in fact more general than the ESB market alone: No middleware vendor of scale has emerged in recent years. Instead, across the board the smaller middleware vendors are being squeezed between the industry giants with comprehensive software stacks and service arms on the one hand and OSS projects on the other. The reason for the squeeze is also three fold:

• The increasing reluctance of end-users to take a chance on a smaller vendor: The extremes of OSS or industry giants seem less risky.
• Consolidation in key industries such as financial services and telecommunications (key markets for new middleware vendors in the past) has reduced the number of potential customers and hence increased the competition in those markets.
• The increasing sophistication of the industry giants in dealing with new entrants: A smaller vendor must face a wide variety of onslaughts from aggressive sales tactics such as the giving away of expensive software to the promotion of OSS projects allied with service delivery capabilities.

While both the concerns about vendor viability and the sales tactics used by the giants are entirely legitimate, one wonders about the impact on the overall rate of innovation in the IT industry. The disappearance of Cape Clear must cause specific pain for existing enterprise customers now concerned about the future of the products upon which they depend. However, one must wonder more generally what the impact longer term of the hardening of the markets against new innovators will be on all enterprise users.

Ronan

Only a few months ago, I said that Tibco would not be bought…

…and stated:

“With Tibco, there is no obvious buyer (as Oracle was with BEA) nor is there a neat fit into one of the majors (as BusinessObjects was with SAP).  Of the 4 listed by the “Analysts” quoted above, only IBM would make any sense.  And Oracle, except that it is busy trying to eat BEA.”

I now wish to recant and disagree with Steve’s view that HP will get the prize.  Now that Oracle has BEA, the next obvious target for it is Tibco and it should move quickly before IBM steps in.  Here are my reasons:

- Tibco has the only big league competition to IBM’s WebSphere-MQ in the message oriented middleware space.  It is used widely in the largest financial services companies, telcos and beyond.  With Tibco combined with Oracle’s database etc and BEA’s application server, Oracle would have the fire-power to take on IBM’s hold in these accounts.

- Tibco has developed its BusinessWorks integration product which plays in the SOA/EDA/BPM space.  This is one of the best development tools I have seen in this space as well as being mature.  Combined with Oracle’s and BEA’s reach, BusinessWorks could deliver in the SOA marketplace in a way that it can’t with a standalone Tibco.

- It would only cost $1.4bn (plus a bit of course). .

And finally what both Oracle and IBM have shown is that in this market there is no such thing as buying a company too soon – if you don’t buy, somebody else will.

Ronan

p.s. I don’t have shares in Tibco.

So, now that BEA has finally fallen to Oracle, who will be next? My money is on TIBCO.

TIBCO Software has done extremely well since it came into existence from its origin as as Teknekron. Initially an EAI (Enterprise Application Integration) company, it quickly expanded to take on challenges such as Workflow, Business Process Management (BPM) and service-oriented architecture (SOA). More recently it added Business Intelligence and Analysis to its portfolio, strenghtened by the acquisition of Spotfire last year. TIBCO products are well-respected, and it has a strong and loyal customer base.

But with BEA going, and webMethods being taken out by Software AG, it is more or less alone as a pure-play middleware player left. In addition, anyone looking at the results for its 2007 fiscal year (ended Nov 30th 2007) will immediately realize that it is an attractive target. The question isn’t really whether TIBCO will be bought, but by whom.

Names being kicked about include all the usual suspects – IBM, Oracle, SAP….but I reckon that HP might snatch the prize. It missed out on BEA, but perhaps on reflection TIBCO is a closer match to its needs.

Steve