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
Posted in BPM, Data integration, IBM, Imported, Industry trends, Information Management, investment, Marketing, Markets, Pegasystems, Vendor newsIs this what you get with Enterprise 2.0?!
Once upon a time I was a developer on CICS, IBM’s ubiquitous mainframe transaction processing product.
CICS runs in just about every large business in the world, carrying out many of the corporate ‘bread-and-butter’ transactions, and is particularly notable for its long life of more than three decades. To many, CICS remains the gold standard of Enterprise infrastructure.
So imagine my surprise when I saw CICS on Youtube today! The clip provides a simple and crisp introduction to the power of events processing in a CICS environment, and is actually rather good, but I am still in shock that Youtube, which I usually use for watching Eric Clapton or any of the three Kings (Albert, Freddie and BB) playing storming blues, is featuring CICS! Is this what they mean by Enterprise 2.0 I wonder? The old world colliding with the new? Is the next step to see CICS programmers throwing themselves from 5th story windows into drifts of snow?
I guess this is the mark of a truly successful software tool – something that constantly evolves to meet the shifting and developing needs and expectations of its customers. Good for you, CICS!
One final observation – there was also a small victory in the Youtube clip for any old hands. The voice-over is by an American lady, but she still refers to CICS as ‘kicks’. This is the way CICS has been known in the UK for years, but in the US it was always spoken as the four letters - C.I.C.S. Perhaps CICS has become the subject of a new international standard!
Steve
Will Swordfish make its point?
The ECLIPSE organization has finally made its announcement of the first release ofSwordfish, the open source ESB (Enterprise Service Bus) framework.
A lot of the work for Swordfish has come from Sopera, a German open source company that has developed an offering around the DeutschePost service bus development. Sopera offers a valid and competent framework for service integration, and therefore it is assumed that Swordfish might also work.
So, will Swordfish make a successful strike at the ESB market? So far, open source ESB projects have not had a great deal of success, and as far as 2009 goes Lustratus has forecast that open source projects will suffer due to the lack of the necessary people resources to turn open source frameworks into a useful user implementation. However, Swordfish has the backing of the influential ECLIPSE organization, which has done a lot to standardize the look and feel of many software infrastructure tools.
Looking at the initial marketing thrust for Swordfish, things don’t look to good. From the announcement letter, the top functional bullet reads
Support for distributed deployment, which results in more scalable and reliable application deployments by removing a central coordinating server.
Well – duh! This is not new – it is part of the basic definition of what an ESB does! However, this initiative is still worth watching, despite the ill-fated marketing attempts so far. ECLIPSE has significant industry backing for its GUI look-and-feel stuff, and indeed most of the big industry names like IBM, Oracle and SAP are involved in the running of ECLIPSE, and provide a lot of the financial backing.
It is this that might be the source of most excitement with Swordfish. Oracle and IBM both actively market and sell their own ESBs, and SAP offers its own equivalent functionality as part of its NetWeaver set of offerings. I wonder how they feel about ECLIPSE driving an open-source ESB version that competes on functionality and is free? I would love to be a fly on the wall in internal ECLIPSE meetings about the future of Swordfish.
Steve
Posted in enterprise architecture, enterprise service bus, esb, IBM, Imported, Open Source, Oracle, SOA, Sopera, Vendor newsTIBCO 1Q09 earnings will make interesting reading
In a week’s time, TIBCO Software will release its earnings figures for its 1Q09 quarter ending March 1st.
These earnings should make interesting reading, and will start to indicate how well the company is standing up to a number of squeezes on its business. TIBCO has been caught recently in a two-way fight with both traditional and new-wave vendors. On the one hand, it sees a key growth market as the general area of SOA, BPM and wider business integration where it is having to cope with the IBM steamroller, while on the other its ‘traditional’ market of core messaging for financial services front-office needs is coming under attack from new market entrants with radical shifts in technology.
IBM goes from strength to strength with its SOA / BPM WebSphere product suite, claiming throusands of deployments, and was always going to be a hard fight for TIBCO. The new TIBCO ActiveMatrix architecture is an attempt to fight back, but it remains to be seen how effective this approach might be. Perhaps more worrying for TIBCO is the surge of new competition in the high-speed financial messaging marketplace, where companies such as 29West and Solace Systems have emerged with messaging offerings that outperform traditional TIBCO Rendezvous messaging. The TIBCO response has been to partner with Solace Systems to produce a messaging appliance that implements Rendezvous software in hardware, since it recently claimed that
Software has reached its limit in ultra-low latency messaging, focusing increasing importance on the hardware “plumbing” to deliver future performance increases.
This brings TIBCO into competition with appliance offerings from Solace Systems, Tervela and IBM (DataPower). However, other vendors have taken a different approach to the performance issue in these highly demanding financial messaging markets, instead revolutionising the messaging architecture to generate the necessary high performance figures through software. Offerings have appeared from companies such as 29West, who pioneered this approach, and latterly IBM (LLM), with even NYSE promising to get in on the act.
So this set of TIBCO results are likely to be even more closely scrutinized than previously. Is the TIBCO strategy working, or is the company getting more and more squeezed? Technologies such as BPM seem to be riding out the recession particularly well, but will TIBCO show similarly resilient figures? Has TIBCO’s admission that Rendezvous software is out of steam carried its customer base across to the idea of appliances, or is it going to open the door to competition? It certainly looks like 2009 will be an interesting year for TIBCO.
Steve
Posted in Financial Services, IBM, Imported, Industry trends, SOA, Tibco, Vendor news | 
29West, DataPower, IBM, LLM, SOA, Solace Systems, Tervela, Tibco, vendor earningsWhat use is technology without flexibility?
I was reading a post today from mainframe integration vendor GT Software…
…about its support of IBM’s mainframe speciality engines, and I was suddenly hit by the realization that in order to really add value for users, technology almost always has to be accompanied by flexibility. The two need to go hand in hand if returns are to be maximized and business risk minimized.
The specific example discussed relates to an IBM mainframe invention called a speciality engine. For the uninitiated, think of a logical processing box within the overall mainframe environment where processing is much cheaper, with different boxes being aligned to specific activities such as running LINUX operations, data access or Java-type activities. What this basically means is that if part of your workload is doing something that is supported by one of the speciality engine types, then you can choose to run it more cheaply by moving it into this engine, and in fact this can often improve performance too.
This is neat technology, offering the opportunity to reduce costs and improve effectiveness, and various mainframe software suppliers have jumped on the opportunity this offers by moving eligible workloads onto these specaility engines. However, as with any new technology development, things are not quite as simple as they seem. In the IT industry there is a terrible tendency to jump for a new technology and push everything onto it, without appreciating the implications. But, in this example, as pointed out in the referenced post,
There are many use cases where it is much more efficient to NOT shift workload to a specialty engine. Why — because, there is overhead associated with moving workload
This is typical with just about any new technology. It is great in SOME circumstances, but loses out in others. iPODs are great for listening to pop music, sounding little different to CDs and being very much more convenient, but try them on classical symphonies and you will wonder what has happened to the color and magic of the piece. The key is to use new technology for WHAT MAKES SENSE, as opposed to what is possible. There is another angle to this flexibility too. IT vendors often ignore the fact that users are not starting from a clean sheet of paper; they have existing investments and technologies that cannot just be written off. Therefore, it is important to have the flexibility to operate with whatever is in place rather than demand a specific new technology component. This is not a static need, but a dynamic one – it may be that a company might change its approach further down the line, and a rigid, inflexible technology implementation can cause terrible future headaches.
While new technology may promise a lot, it is only when coupled with flexibility over which technologies to use, for what, and when that technology can REALLY deliver its full value.
Steve
IBM events make an impact on SOA
IBM certainly seems to see SOA as a key initiative, if its annual SOA show is anything to go by.
The IBM Impact 2008 even in Las Vegas attracted more than 6000 attendees, and they can’t all have gone just for the weather! But the most salient aspect of the event as far as I was concerned was the ‘event’ support – not the army of people ensuring the party ran smoothly, of course, but the addition of the WebSphere Business Events product.
Event handling has always been possible with WebSphere, but it was messy. Triggers could be set on different queues, and conditions could be detected in various ways, but the whole thing was pretty technical and complex. However, IBM’s new product, based around its acquisition of AptSoft technology, delivers exactly what business users are looking for; the ability to write business rules in their own language that can control operations.
One of the key characteristics of SOA is that it breaks monolithic application stacks into individual services, each executing a discrete piece of business functionality such as ‘Get Customer Details’ or ‘Book Delivery Date’. In addition, information flowing in and out of these services is cleanly architected in a standards-based fashion, and is therefore easily accessible. But this opens up a magnificent opportunity to deliver business control over operations through the use of business rules that implement corporate policy by changing execution and flow.
For example, if a bank wants to offer students the opportunity to make payments from their accounts with no charge, a business rule could be written that says ‘If account holder is a student, then skip the charge calculation step’. This is a simple example, but with the addition of a correlation capability IBM has ensured that much more complex rules can be put in place. Consider the type of rules needed to mitigate the risk of fraud, for instance, where multiple conditions from a range of different systems would need to be assessed to detect suspicious activity patterns.
The key is that these things can be achieved with the use of business rules that the business analyst can understand. This makes change quicker, and reduces the risk of misunderstandings between the analyst and IT technical staff.
With the addition of WebSphere Business Events support, IBM SOA has finally grown up. I guess the next step could now be a comprehensive BAM solution……we can but hope.
Steve
IBM gets Cognos to fill the gaps
IBM has been on quite an acquisition spree of late, but the latest is perhaps the most predictable and potentially powerful.
IBM is buying Cognos, the business intelligence and performance management vendor, for $5B. This has been on the cards for some time, and increased in likelihood when SAP acquired Business Objects recently – Cognos and Business Objects were acknowledged as the two leading players in the BI space.
This looks to be a great deal for both companies, and users should be pleased. With 25,000 customers spread across some of the largest companies in the world, Cognos is a well established BI player, and shares many customers with IBM. On top of this, with the SAP acquisition of Business Objects, Cognos was the last big pure-play BI vendor and a major target for acquisition, so its users must have had concerns over potential new masters – however they are likely to be very comfortable with IBM since it does not really have competing products and will therefore keep the technology alive and moving forward. From an IBM point of view, it will be particularly keen to get its hands on the 1000+ BI-experienced R&D team in Cognos. as well as the 2000 or so customer-facing field force.
The key here is that the two companies mesh really well together. IBM’s Information on Demand initiatives have made every effort to ensure that data is accessible wherever and whenever it is needed, while Cognos concentrates on interpreting the data and generating business value from it. Combining the two promises to deliver even more accurate, timely and understandable information to support executive decision-making and business-driven data mining initiatives.
This also fills some gaps for IBM in its service-oriented architecture (SOA) strategy. At the moment, one of the few weak spots for IBM is its lack of an industry-leading BAM (Business Activity Monitoring) initiative. That is, IBM SOA can make programs visible in terms of business services, improving the propensity for getting a clearer understanding of business activity in IT operations, but it was not particularly good at interpreting the information in BAM terms. Now it will be able to deliver one of the best BAM solutions in the marketplace, making it possible not just to streamline and automate processes but also to continually improve their effectiveness.
If there is a challenge for IBM in absorbing Cognos, it is in the area of organization. IBM has made the decision to keep Cognos in its own business unit – BI and performance management. However, this unit lies within the IBM Information Management division. While this makes sense at one level, in that BI is very related to information, the performance management part is closely linked to the IBM SOA initiative driven from another division. It will be important for IBM to manage this carefully, but it is not the first time it has had to deal with this sort of cross-divisional issue – for example, it had to handle this when Tivoli, the management software company, was acquired.
All in all, this acquisition looks to be good for just about everyone – IBM users, Cognos users, IBM and Cognos companies and employees….but perhaps not for the competition!
Steve
Why Tibco won’t be bought next
Ranadive, CEO of Tibco, has announced that Tibco board would of course consider offers.
And after the recent news about Business Objects and BEA, such offers may seen inevitable. Jeff Schenider of MomentumSI for instance argues that we have entered a period of inevitable consolidation. While I certainly think we are already in an era of big-4 and the rest, that does not necessarily mean that every ‘small’ software company (and remember these are only small in comparison to the giants) must be bought.
The Reuter’s piece covering Ranadive’s statement comments that “Analysts have said suitors for Tibco could include IBM (NYSE: IBM), Hewlett-Packard (NYSE: HP), Sun Microsystems (NSDQ: JAVA), and EMC (NYSE: EMC).”
I personally wonder. On the one hand you could ask why not? Tibco has excellent top tier customers who use its long standing messaging products for core business processing. It also has some of the best SOA products in its BusinessWorks portfolio – combining enterprise grade reliability with good tooling. However, I think you need to look a little deeper about the two acquisitions which sparked this consolidation talk:
BusinessObjects is in what should to be the hot growth area over the coming years – business intelligence – and thus is perfect for the vendors who want to find a new thing to sell to their customer base or a new way to justify their existing product line (by adding a BI layer on top). Business Objects should have been a target for IBM and Oracle as well as SAP.
BEA was generally believed to be a long term target for Oracle – BEA had after all used the application server wave to capture business from so many of Oracle’s enterprise customers. Oracle first took quite a while to take application servers seriously and then took quite a while to become competitive. Buying BEA finishes the job off quickly and gets back ownership of all those straying BEA customers.
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. Therefore, I don’t see Tibco being bought except unless it is Skyped (bought for over the odds to avoid somebody else buying it).
Ronan
Oracle moves to buy BEA: The end of the J2EE era?
Oracle has finally done what so many rumours have pointed to for at least a few years:
made an offer to buy BEA. I am sure that there will be much comment on the challenges of dealing with the total overlap between BEA’s core product – the WebLogic applications server – and Oracle’s application server (both in the top three by most measures of market size). The move should also take the wind out of speculation that Oracle will make a spoiler bid for Business Objects.
The writing off of BEA as a business by some has been totally over-stated. However, I think if this bid is successful it does marks the end of the J2EE era. Not that I am suggesting that J2EE application servers are going to go away of course. Rather, the world has moved on from what created that market in the late nineties. At one end of the spectrum, the focus has moved back towards technology independent architectures with SOA (just as CORBA attempted to do in the pre-J2EE days – all be it by creating another set of technology). At the other end, lighter weight approaches such as Spring have superceded the heavier and more complex EJB model (which to be fair has also moved with the times but probably too late).
It is also worth noting that the disappearance of the large enterprise focused ISVs continues – in one week we appear to be losing another two. It is beginning to look like that the enterprise software market is heading for a strongly polarised world made up of a big-four (MS, Oracle, IBM and SAP) with a huge gap to the next division.
Ronan
SAP buys Business Objects
It was announced yesterday that SAP is acquiring Business Objects for $6.8billion in what is described as a friendly take-over (and leaked out a couple of weeks back as reported here ).
On the product side, the benefits are obvious from SAP perspective – although there will certainly be some integration and overlap issues for SAP to deal with (covered well by Forrester here). Clearly, it also brings a large number of new customers to SAP – although it will be a long term project to bring them over to other SAP products.
From the vendor perspective, it reduces the choice for ISVs wanting to partner with a Business Intelligence vendor. This should make Cognos (now the only significant independent BI vendor) in particular happy. However, the big question is will IBM grab Cognos now to fill its own BI gap before Oracle gets there first. Of course nothing may happen – Remember the speculation around Informatica and Oracle after Ascential was bought by IBM a couple of years back?
And finally… For the customers of BO, it will take a while for the smoke to clear. However, SAP paying that amount of money should make BO customers very confident that their software has a strong future. What it means to users of SAP’s existing BI product is equally obvious: While it is very likely the products will be supported for a long time, it is equally very likely that they will not be the basis of SAP’s BI strategy going forward.
Ronan