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
Posted in BPM, Earnings, enterprise architecture, Imported, Industry trends, investment, Markets, Pegasystems, SOA, Vendor newsWill 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 newsIs 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….
Steve
Recession pushes SMEs to top of mind for software vendors
One interesting effect of the current economic turmoil is that SMEs have never had so much attention from software vendors desperate to find alternative revenue sources to replace depressed corporate markets.
A common effect of recession is to cause larger companies working off a bigcost base to become cautious, opening the way for smaller, more nimble companies to slip in and grab a bigger piece of the pie. As a result, SMEs are often more inclined to look at a new investment in a recession, making them attractive targets for software vendors.
Take the announcement made last week by software infrastructure vendor Axway, recently merged with Tumbleweed and the now headquartered inScottsdale, Arizona. Axway has released B2Bi Express, a B2B solution targeted specifically at SMEs. Mindful of the needs of this market segment, Axway offers B2Bi Express not only as licensed software but also as a SaaS (Software as a Service) solution.
Most major software vendors now include products designed for SMEs, although in many cases the larger vendors such as IBM rely on partners to fill out their solution sets. I expect to see a lot more focus on SMEs over the coming months – the one warning, however, is SMEs should watch for vendors offering ‘big user’ products with simply a few marketing slides around them to make them look like SME products. SME needs are quite different (eg a SaaS option such as included by Axway in the above release) and need special handling in both product and presentation.
Steve
TIBCO 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 earningsDoes the IT patent system deliver justice?
For some time now I have been following the ETL patent case where a small IT company called Juxtacomm is suing a whole host of IT companies for patent infringement.
Mark Madsen recently blogged on this, concluding that
What is most annoying about these types of patent lawsuits is that software companies don’t work together to reform the broken intellectual property systems in the US and Europe.
I have to say I am personally in full agreement with Mark about the patent system being badly broken, at least for IT-related patents. There are two main problems, nicely illustrated by the Juxtacomm case Mark cites but reinforced by countless other IT patent infringement actions. The first is somewhat endemic in litigation – those who know how to work the system can use it to bend it to their advantage, even to the point of ‘legally extorting’ money from others. The second is perhaps more to do with IT patents specifically; the reliance on using courts with a layman’s understanding of IT rather than IT experts can severely compromise ‘justice’.
Of course, it is a little difficult to discuss justice in this context. From the patent author’s point of view, justice is being fairly recompensed for the invention, while from the software vendor’s point of view it is not being persecuted unfairly. However, it seems to me that there are many examples of the two failings mentioned above, and these lead to the obvious conclusion that there really is something badly wrong with the system for IT-related patents today.
Take the first point. Mark points out that the plaintiff
..filed the patent infringement claim late last year in the Texas Eastern District Court, a favorite of patent trolls because the courts there favor patent trolls.
While the use of the term ‘patent troll’ is somewhat emotive, the real point is that statistics show that this particular Court has a history of coming down on the side of the plaintiff. The ability to select a venue for a trial of international companies from all over the world in the Court likely to be most favourable to the plaintiff seems to be a completely unfair bias towards the plaintiff and against the defendants. My very limited understanding of the generic legal process is that a defendant accused of a crime is usually the one that has the right to object to being tried in a particular location, but as far as I am aware in the case of patent infringement the defendant does not have recourse to this action.
The next point backing up the advantages possible from ‘playing the system’ is particularly evident in the specific ETL case Mark cites. The lawyers for the plaintiff are Akin Gump, a massive and fearsome Texas law firm with hugely deep pockets. The list of infringers is extensive, spanning behemoths like IBM all the way down to tiny companies like Fiorano. The inclusion of Fiorano is interesting and indicative - anyone with any background in ETL and wider integration would quickly point out that the patent requires the use of a ‘script processor’ that is used to manipulate the data transferred, and that Fiorano (which is not even an ETL company) does not have a script processor at all. So why include a company that appears not even to be infringing? Of course, I do not know the answer, but I can hazard a guess. There is no way a tiny company can go to trial - it just cannot afford the expense and cashflow, even if later it might be able to recoup costs. Therefore, once the gun is pointed at its head it has no choice but to cave in provided the settlement is a bit less than the cost of going to trial. Notice that this has nothing to do with whether the company infringes or not…on the day that the company is named in the suit its outcome is written in stone – it is going to have to cough up a few hundred thousand whether guilty of infringement or not. However, perhaps there is another reason for this play - having a group of smaller companies settle helps to convice a potential jury that ‘there is no smoke without fire’. When the trial comes around, the plaintiff’s lawers can point to the fact that others have settled (of course the terms are confidential so the jury will not know what the conditions were) and therefore this helps to prove the guilt of the big boys. But is this justice?
The other problem is the use of a lay judge and jury in IT patent infringement cases. Information Technology is a very complicated area – it is extremely hard for a lay person to grasp the implied meanings of words frequently used in the IT world such as ‘script’ and ‘metadata’. As a result, both legal teams have a bun-fight to push their own defintiions and the poor judge has to rule on which ones are to be used. Quite naturally, the judge usually goes for the definition that is simplest to understand, but the problem is that this will often be the wrong one. IT terms are often quite specific, and taking a simple interpretation often broadens the scope of a patent well beyond the more accurate anf precise IT interpretation. Actually, this is not just a problem for IT but for other specialist areas too – for example there are numerous examples of fraud trials where cases have collapsed because the lay jury just cannot understand the complexities of the financial trickery involved.
This post is absolutely not intended to be discussing the merits or otherwise of the specific patent case in Mark’s post. Instead, I am trying to highlight what seems obvious to me – that the patent system is badly broken, at least for IT patents. While I absolutely agree that a patent owner has the right to go after companies that are benefiting unfairly from his or her invention, it seems to me that the current state of affairs is that rather than leaning towards the defendant as criminal cases do, the current system gives the power to the plaintiff as long as a legal giant can be found who knows how to work the system. This is certainly what I interpret as justice, but then, I am no lawyer!
Steve
Will Intel’s attack on appliances work?
At the recent Gartner SOA show in London, I was surprised to see a stand from Intel.
Turns out Intel are striking back at the burgeoning SOA Appliances market. The Intel claim is that its ‘software appliance’ performs at least as well as Appliances, and is therefore a better option.
The Intel argument is based on the fact that when you buy an appliance, you are locked in to the platform eg the box. So, as time passes, your appliance misses out on latest hardware or chip developments since it is hard-wired. In contrast, if the same performance can be obtained in pure software, then this has the advantage that it can be moved onto a platform with more power if needed, or as platforms are upgraded it can benefit. And Intel claims that its sexy software can match or exceed appliance speeds because it is so highly optimized.This optimization is apparently all around the XML parser. This makes sense in the SOA Appliance space because most SOA Appliances are seployed to deal with high volumes of XML conversions. The Intel claim is that it has a super-slick parser and that is how it can beat the Appliance.
This certainly throws up a new consideration when looking at the case for appliances, but of course it should be remembered that performance is not the only reason people buy them. Off-loading from the production platforms is another reason, and not having to worry about the platform management is another (install, config, etc). However, the Intel argument is a good one. Perhaps the biggest worry I have, however, is that whatever one company has done in software, someone else can do too, and unless it is patent protected, there would be nothing to stop an appliance maker coming up with a super-fast parser, and then putting it into microcode. It seems to me that in the end hardware will always be faster than software.
Steve
Posted in best practices, EA, enterprise architecture, Imported, Industry trends, SOA, SOA development, Vendor newsIBM 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
Secure mainframe SOA-in-a-box
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
Now its IONA’s turn to be acquired – by Software AG?
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!