Integration Market Growth Attracts Giants

Smaller vendors that have jumped on the application integration trend are finding themselves swimming with some big fish.

Nimble players, such as CrossWorlds Software Inc. (www.crossworlds.com), VIE Systems Inc. (www.viesystems.com) and Convoy Corp. (www.convoy.com), have quickly built products to address application integration opportunities.

But the influence of the smaller players could soon be over. Initiatives by large firms such as IBM Corp. and Candle Corp. (www.candle.com) are upping the ante by offering integration technologies, products and services of their own. The major players are being attracted by an opportunity to resell to their existing large-site customer bases and by a chance to get involved with a new market opportunity on the ground floor -- a market that is expected to grow significantly over the next few years.

Candle, for example, recently revamped its Roma Business Services Platform (Roma BSP) middleware product line with a 2.0 release, only about one year after the product's initial introduction. The Roma line includes an integration broker, a development tool, an application manager and a connector for SAP R/3. Even before the update to the Roma line, Candle was experiencing significant revenue growth from its integration services -- which focus heavily on helping users deploy IBM's MQSeries product line.

Steve Craggs, vice president of enterprise application integration at Candle, explains the incentive: "It's difficult to grow a [mature] business at 30 to 35 percent. That's why Candle started its new middleware business." Last year the company was realigned into two units: one part focused on the company's traditional large-system management tools and the other half focused on business applications. Craggs says in 1998, the $350 million company logged between $40 million and $50 million in business from middleware sales and services. Projections call for that slice of Candle's revenue to grow to one-third of the company's total revenue by 2000.

IBM Corp. is jockeying to reposition its long-dominant MQSeries middleware products as more than a basis for asynchronous messaging passing. With the introduction of complementary products, such as MQIntegrator from New Era of Network (NEON, www.neonsoft.com), MQSeries is extending its ability to address other integration needs.

Bill Reedy, vice president of transaction systems at IBM's software group, cites three factors that are generating the interest in application integration: the Internet and e-business, packaged application adoption, and an increasingly competitive business environment.

Despite IBM's dominance at large companies where the company's AS/400 and mainframe products are frequently deployed, the company is actively involved with an industrywide initiative aimed to push development and deployment of application integration. The group, which was initially named Enterprise Integration Standards Council, quickly dropped "Standards" from its name and now works under the moniker Enterprise Integration Council (www.iswatch.com).

J.P. Morgenthal, vice chairman and chief architect of the Enterprise Integration Council and president and director of research at NC.Focus (www.ncfocus.com), a market research firm, says the council's mission is to help users define what goes into their integration efforts and to help raise visibility of application integration issues. The council's first project is to create a dictionary that defines middleware terms. The dictionary is expected to be used to standardize the terminology that vendors, consultants and customers employ. Beyond that, the council hopes to identify holes in industry and de facto standards and the problems these shortcomings present integration projects.

Morgenthal cites interoperability and compatibility issues between COM, DCOM, CORBA and messaging products as future targets. "There isn't a group that says, 'How do these things come together?'" he explains. The vendor community currently dominates the membership of EIC, something Morgenthal hopes to see balanced by the addition of user members.

Despite the growth of the middleware and integration markets and the number of new products, it is still complicated and time consuming to integrate applications. Candle's Craggs explains, "A lot of customers who are getting into this business integration stuff are finding they have to integrate the damn middleware."