EAI Market Surges

Any time a company launches a new line of business, brings together separate lines of business, or merges or acquires another business, it's usually time for IT managers to break out the aspirin. Because such changes may mean months of manual coding to connect disparate applications on separate platforms.

Typically, up to 30 percent of the costs associated with implementing a major packaged application are consumed by the development of point-to-point application interfaces, according to estimates from GartnerGroup (Stamford, Conn.). An even higher percentage of IT budgets is spent on ongoing maintenance of these interfaces. Wintergreen Research Inc. (Lexington, Mass.) puts the figure for application integration at 45 percent and 80 percent of IT budgets.

Enterprise application integration (EAI) tools promise to bring some automation to the process of connecting back-end applications. In fact, companies and developers will be so hungry for these capabilities that the market for EAI is expected to soar to more than $14 billion within the next four years, according to a recent study from Wintergreen Research. Wintergreen estimates that the market for message broker suites--the engines of EAI--will reach $3.8 billion by 2003. The market for related technologies that support EAI infrastructure--including application development tools, system management environments, and file transfer--will top $8.9 billion by that time.

Wintergreen identified the leading vendors in the message broker market as Neon/Century Analysis (Englewood, Colo.) with a 15 percent share, Software Technologies at10 percent, Frontec (now Viewlocity Inc., Atlanta) with 10 percent and TSI (Wilton, Conn.) at 9 percent. The application tools market alone is expected to grow from $947 million in 1998 to $4.1 billion four years from now, according to Wintergreen. The study also identifies Candle Corp. (El Segundo, Calif.) and BMC Software (Houston, Tex.) as the two leading MQSeries system management vendors.

Leading early adopters of EAI solutions include telecommunications and banking and financial firms, the study finds. The growth in telecommunications--projected to jump from $1.1 billion to 2.5 billion by 2003--is fueled by computer-telephony integration (CTI) projects. Among banking and financial institutions, small-scale and pilot projects are giving way to enterprisewide EAI initiatives.

A major force that will drive EAI is the rise of e-business, vendors agree. "A lot of people view EAI as just integrating applications within the boundaries of an enterprise," says Connie Galley, president and CEO of TSI Software. "It also covers transactions coming from the outside, either from customers or down through the supply chain."

While there's nothing new about application integration, its role is changing dramatically, Galley continues. "The nature of integration has changed," she says. "It's changed from batch to real-time, from time-driven to being event-driven, from custom programming to more of an architected approach. The Internet has changed the nature of communication." Traditional EAI has been system-to-system and application-to-application. "With the Web, it's more of client-to-multiple-server scenarios."

EAI Market Growth, 1998-2003

(In millions of dollars)Source: Wintergreen Research
EAI suites$306.7$3,811.3
EAI infrastructure$2,493.3$8,893.5
Percent growth30.4 percent28.4 percent