Before I Forget…

The worldwide market for middleware totaled $14.1 billion in 2007, a 12.9% increase over the year before, according to a summary of the market published this week by Gartner.  Middleware trails databases as a major enterprise software market, but not by as much as it used to.  Databases amounted to an $18.6 billion market in 2007, but at 12.1%, it’s not growing as fast as middleware is.  Business process management software, portals, business-to-business software, and enterprise service buses are being added to the application servers and application integration software in the category.  The Gartner report said the middleware market is outpacing enterprise software in general.  “This technology area has not seen any noticeable signs of slowdown,” said Fabrizio Biscotti, a Gartner research director.  Oracle announced it was acquiring BEA Systems in January of this year and completed the purchase at the end of April.  But Oracle and BEA revenues from last year added together still leave it a distant No. 2 to market leader IBM.

IBM had revenue of $4.1 billion in 2007 for a 28.9% market share, an increase over its 28.3% share of the year before.  BEA Systems occupied the No. 2 spot with revenue of $1.3 billion and 9.3% market share.  Its share was down slightly from 9.8% the year before.  Oracle was No. 3, with $1.2 billion in revenue and 8.5% market share, an increase from 8% the year before.  Oracle acquired BEA Systems as a Java middleware supplier.  Middleware will be a crucial element of future application-buying decisions, with customer’s wanting the middleware most attuned to their applications, Oracle believes.  Sterling Commerce was No. 4, with $443 million in revenue and 3.1% market share, down from 3.5% the year before.  Microsoft was No. 5, with $426 million and 3% market share, up from 2.4% the year before, the Gartner report said.

Reference : http://www.intelligententerprise.com/showArticle.jhtml?articleID=208403867

…..”It is in fact getting easier to integrate applications, but it’s never going to be easy.”  What’s next for Web services? In his case summary “Will Web Services Really Transform Collaboration?” published in the Winter 2005 edition of MIT Sloan Management Review, HBS associate professor Andrew P. McAfee argues that the benefits of Web services, in terms of data-sharing and communication exchanges, are not going to happen unless managers better integrate common standards…..”The organizational challenge comes as all stakeholders get together and hammer out common definitions. This might not seem like the kind of work that leads to disputes, but it is,” he says.

Sara Grant: In looking at the future of Web services—defined as application-to-application communication—some vendors and futurists paint a scenario where businesses collaborate and compete in profound new ways.  But your research suggests that this is not happening and is not likely to happen any time soon.  Why have Web services not lived up to the hype?
Andrew P. McAfee: Because the hype is unrealistic.  It is in fact getting easier to integrate applications, but it’s never going to be easy.  There are two reasons for this: one technical; one organizational.  Big companies have the power to convince or compel their partners to participate, and to shortcut negotiations by simply dictating terms.  The technical problem is that any two applications are virtually guaranteed to contain dissimilar data and execute dissimilar business processes.  One might store dates as DD/MM/YYYY and put the date first in the purchase orders it sends out; the other might store dates in the MM/DD/YYYY format and expect the date to be the first field in any electronic purchase order it receives.  Before any systems integration can take place, these dissimilarities need to be resolved.  There is no magic bullet in the Web services toolkit that does this automatically or quickly.  The organizational challenge comes as all stakeholders get together and hammer out common definitions.  This might not seem like the kind of work that leads to disputes, but it is. In most companies, questions like the following would lead to heated discussions:  Who’s got the real customer contact information?  Who gets to access it?  Who gets to update it?  What’s the last day for bookings in each quarter?  Is it the same all around the world?  Do we have to do a credit check before scheduling every order for production?  Who gets to certify approved vendors?  What’s the process for adding a vendor to the list?  Answering these requires a combination of diligence and tough-mindedness.  A couple of years ago Cisco called a halt to all new IT efforts and spent over eighteen months and $300 million to resolve exactly these kinds of dissimilarities within the company.  If any Web services tools could have made this work cheap, fast, and “easy,” don’t you think Cisco would have used them?

Q: What are the characteristics of successful Web service implementations today?  What kinds of companies can benefit most?  Are there certain types of processes that work best as Web services?
A: Web services technologies work equally well within and between companies.  Cross-company implementations, however, are still comparatively rare.  We see them between large and technically sophisticated organizations who have longstanding ties, and we’re also starting to see them between big companies and their smaller suppliers.  Big companies have the power to convince or compel their partners to participate, and to shortcut negotiations by simply dictating terms.  Amazon and eBay have both done brilliant work with Web services to open up their IT infrastructures and let thousands of small sellers plug into them, but it’s a “take it or leave it” proposition.  Amazon and eBay don’t renegotiate Web services standards with each seller; they simply publish their standards and wait for other companies to adopt them.  So far Web services are being used to automate simple business processes—transmitting an order, acknowledging a shipment, describing an item for sale, etc.  Over time the processes enabled via Web services will become more complex, but it’s best to start small and build incrementally.

Q: For companies that have invested in Web services, what benefits have they realized?  Do they gain competitive advantage?
A: It sure looks like Amazon and eBay are strengthening their positions and continuing to grow by using Web services well.  I studied an effort by IBM and its independent distributors in Europe to automate the ordering process for midrange computers.  All the parties I talked to felt that productivity had increased, but they talked about the work more as capability development than benefits realization.  They were learning how to “speak Web services,” and were confident that they would have many opportunities to use their new language skills.

Q: What questions should a CIO or other company leader ask as they consider a Web services project?
A: Who are we doing this with?  Can we be sure that our partner is in this for the long haul?  How are we going to reach agreement with them about shared data and business processes?  What’s the first set of interactions that we’re going to automate, and what are the next ones?  What do we eventually hope to achieve by using this technology?  How are we going to ensure that we capture our learnings as we go, and actually develop a capability?  Notice that this list of questions does not include anything about cost savings or ROI.  I just don’t think there are crisp and meaningful ways to do these calculations.  This doesn’t mean, of course, that a company shouldn’t try to minimize costs and identify benefits; it means that it’s not smart to focus from the start on cost savings, then get upset when they don’t materialize quickly enough.

Reference : http://hbswk.hbs.edu/item/4800.html

Short but passable ”C-level” (a.k.a. severely dumbed down) explanations, by Ade McCormack, of :

(1) Service Oriented Architecture (SOA)
(click for audio which runs 4m 48s)

(2) Web Services
(click for audio which runs 4m 19s)

For years, IBM’s massive technology services arm has hogged the limelight, the symbol of its shift away from its old reliance on the “big iron” of mainframes and other hardware.  It is software, though, that has quietly taken up the running.  With little fanfare, Big Blue’s software arm, second only to Microsoft in size, has emerged to become the driving force behind the latest overhaul at IBM, capped in the final months of last year with growth of more than 10%.  Given the upheaval underway in the software industry itself, that makes IBM’s future increasingly dependent on technology shifts and new competitive rivalries, including one with Microsoft, which are very different drivers from those that traditionally shaped its business.  Two things have propelled software to the forefront of the IBM story in recent months.  At the start of this decade, the software division was growing at a negligible rate, held back by the slow decline of the operating system business.  Little more than a year ago, though, revenue from faster-growing “middleware” - software that acts a layer between operating systems and applications, making it possible to run the highly complex IT systems of modern companies - finally grew to account for more than half of the total.  The shift “has given us leverage on the rate of growth” and will mean consistently higher growth rates in future, says Steve Mills, the executive in charge of the division.  The second, related event has been a notable increase in the pace of acquisitions.  While IBM has a long track record of purchases (including the Lotus productivity software business and Tivoli, a systems management company, in the mid-1990s) it has become more acquisitive of late, buying 22 software companies over the past two years.  Mr Mills plays down suggestions that this represents a new departure for the company, but it points to the growing range of opportunities that IBM sees as it extends its middleware reach.

Behind this growth lies a strategy that sounds starkly different from rivals Microsoft, Oracle and SAP.  While those companies have been racing to create vertically integrated “stacks” of corporate software, extending all the way up to applications used by individual workers, IBM has concentrated on creating a “horizontal” layer of middleware that lies in the guts of IT systems, where most workers will never encounter it.  That strategy relies on a single belief: that legacy corporate IT systems are “measured in the trillions of dollars“, says Mr Mills, requiring extensive work as companies try to integrate them better, build on to them and adapt them to new business purposes.  IBM has built five middleware brands - Lotus, Tivoli, Websphere, Rational and the DB2 database business - which as standalone businesses, would each rank among the world’s 25 biggest software companies, says Ian Finley, research director at AMR, a technology research firm.  Mr Finley says that IBM’s middleware strategy has positioned it well for one of the biggest shifts currently underway in software: the rise of so-called “service-oriented architectures“, or broader and more flexible software platforms on which companies can build more adaptable technology capable of changing with their business needs.  This trend has vindicated IBM’s decision, made a decade ago, to move away from the applications business, instead partnering with other software companies, while it builds broader platforms. 

Some other broader software trends, however, may pose a bigger long-term challenge.  One is the rise of open source software, a movement that IBM has itself championed by supporting the use of the Linux operating system.  “They’re enthusiastic today, because it’s hurting Microsoft,” says Mr Finley.  “But they may be less so in future,” as low-margin open source software moves into other parts of middleware.  “The [open source] model is certainly viable,” argues Mr Mills.  IBM has itself started to offer open source versions of some of its middleware, starting with application server software, for the low end of the technology market.  But Mr Mills admits that to avoid seeing the more profitable parts of its business commoditised, “we have to keep moving up” to higher-value areas of software.  A second potential challenge comes from the emergence of “software as a service” - the business of providing applications online as a service to companies, something pioneered by companies such as Salesforce.com and increasingly attracting the interest of Google.  Customers that turn to these services will no longer need to buy the hardware systems and IT integration sold by other parts of IBM, says Mr Finley, putting pressure on IBM itself to step up to become a full service provider.  To do that, though, would challenge the vow of denial that has kept it out of the applications business, a strategy that has underpinned its highly profitable partnership with other software producers.  “That may be one area where they hesitate, and hesitate too long,” the analyst warns.

Reference : http://www.ft.com/cms/s/42c3d026-c6d2-11db-8f4f-000b5df10621.html

From the billions of documents that form the World Wide Web and the links that weave them together, computer scientists and a growing collection of startup companies are finding new ways to mine human intelligence.  Their goal is to add a layer of meaning on top of the existing Web that would make it less of a catalogue and more of a guide - and even provide the foundation for systems that can reason in a human fashion.  That level of artificial intelligence, with machines doing the thinking instead of simply following commands, has eluded researchers for more than half a century.  Referred to as Web 3.0, the effort is in its infancy, and the very idea has given rise to skeptics who have called it an unobtainable vision.  But the underlying technologies are rapidly gaining adherents, at big companies like IBM and Google as well as small ones.  Their projects often center on simple, practical uses, from producing vacation recommendations to predicting the next hit song.  But in the future, more powerful systems could act as personal advisers in areas as diverse as financial planning, with an intelligent system mapping out a retirement plan for a couple, for instance, or educational consulting, with the Web helping a high school student identify the right college.  The projects aimed at creating Web 3.0 all take advantage of increasingly powerful computers that can quickly and completely scour the Web.  “I call it the World Wide Database,” said Nova Spivack, the founder of a startup firm whose technology detects relationships between nuggets of information mining the World Wide Web.  “We are going from a Web of connected documents to a Web of connected data.”

Web 2.0, which describes the ability to seamlessly connect applications (like geographical mapping) and services (like photo-sharing) over the Internet, has in recent months become the focus of dot-com-style hype in Silicon Valley.  But commercial interest in Web 3.0 - or the “semantic Web,” for the idea of adding meaning - is only now emerging.  The classic example of the Web 2.0 era is the “mash-up” - connecting a rental-housing Web site with Google Maps to create a more useful service that automatically shows the location of each rental listing.  In contrast, the Holy Grail for developers of the semantic Web is to build a system that can give a reasonable and complete response to a simple question like: “I’m looking for a warm place to vacation and I have a budget of $3,000.  Oh, and I have an 11-year-old child.”  Under today’s system, such a query can lead to hours of sifting - through lists of flights, hotel, car rentals - and the options are often at odds with one another.  Under Web 3.0, the same search would ideally call up a complete vacation package that was planned as meticulously as if it had been assembled by a human travel agent.  How such systems will be built, and how soon they will begin providing meaningful answers, is a matter of vigorous debate both among academic researchers and commercial technologists.  Some are focused on creating a vast structure to supplant the existing Web; others are developing pragmatic tools that extract meaning from the existing Web.  But all agree that if such systems emerge, they will instantly become more commercially valuable than today’s search engines, which return thousands or even millions of documents but as a rule do not answer questions directly.

Underscoring the potential of mining human knowledge is an extraordinarily profitable example: the basic technology that made Google possible, known as “Page Rank,” systematically exploits human knowledge and decisions about what is significant to order search results. (It interprets a link from one page to another as a “vote,” but votes cast by pages considered popular are weighted more heavily.)  Today researchers are pushing further. ….One example that hints at the potential of such systems is KnowItAll, a project by a group of University of Washington faculty members and students that has been financed by Google.  One sample system created using the technology is Opine, which is designed to extract and aggregate user-posted information from product and review sites…..Whereas today’s travel recommendation sites force people to weed through long lists of comments and observations left by others, the Web. 3.0 system would weigh and rank all of the comments and find, by cognitive deduction, just the right hotel for a particular user.  “The system will know that spotless is better than clean,” said Oren Etzioni, a University of Washington artificial intelligence researcher who is a leader of the project…..Researchers and entrepreneurs in the field say that while it is unlikely that there will be complete artificial-intelligence systems any time soon, if ever, content of the Web is already growing more intelligent.  Smart Webcams watch for intruders, while Web-based e-mail programs recognize dates and locations.  Such programs, the researchers say, may signal the impending birth of Web 3.0…..

Reference : http://www.iht.com/bin/print.php?id=3496525