This January 30th, ebizQ is hosting a Webinar on BPM and SOA trends for 2008 with Anne Thomas Manes of Burton Group and Derek Miers of BPM-Focus, hosted by Beth Gold-Bernstein. You can sign up for that here. Also, if this is a topic you work with, please take our SOA Strategies Survey and win a chance at a $300 Amex gift card.

I thought I would help set the stage for our Webinar by interviewing some other folks, to hear their thoughts on what's coming in 2008 in this exciting and constantly changing marketplace. Joining me in the below podcast is Michael Dortch, analyst at Aberdeen Group and ebizQ's BPM in Action blogger; Tony Baer, principle of OnStrategies and columnist; Ronan Bradley of Lustratus Research and an ebizQ blogger; and Keith Harrison-Broninski, of Role Modellers and our IT Directions blogger.

Listen to or download the entire 32:20 podcast below:

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Below is the full transcript:

Announcer: Welcome to another ebizQ podcast.

EB: Hi, this is Elizabeth Book, editor and chief of ebizQ and today I’m doing a panel podcast about the news of today. And in light of many of the BPM and SOA trends going on in 2008, we wanted to talk about just everything in general and nothing in particular. And I have with me Michael Dortch, who is an analyst at Aberdeen Group, then I also have Tony Baer, onStrategies, president, then I have Ronan Bradley, of Lustratus Research, and Keith Harrison-Broninski of IT Directions and he can tell you more about his project a little bit as well. And I’d like to open it up, say hello to everybody and thanks for being with me today. Michael, are you there?

MD: Yes, I am. Yes, I am.

EB: All right. So why don’t you start it off?

MD: Greetings everyone. For those of you unfamiliar with Aberdeen Group, all of our research is driven by surveys of users so we like to say we do fact-based research, which makes me question what other people base their research on, but that’s a subject for a different conversation.

My area of focus is in enabling technologies and information management. And in that regard, I should say from the outset, I’ve been an industry analyst for 30 years, and so my real area of focus is on where the business infrastructure and the IT infrastructure coincide. And no place else is that happening with more secunity, I guess is a good word, than in the business process management and service-oriented architecture areas.

To be brief, because I could talk about these things for hours if give half a chance. It seems to me based on the research we have conducted and are conducting, that there are a couple of trends that are making themselves evident in -- in each of these areas. In -- as far as business process management is concerned, we see users increasingly desiring to integrate diverse disparate business process management tools into an integrated process management architecture that manages process across each processes life cycle from its inception and design, and adoption through its optimization, and finally through retirement or replacement by some succeeding process.

This kind of life cycle management approach is something users seem to want more and more and it seems to be a desire driven not only by the goal of getting more business value out of their investments but because almost everything else they buy these days on the IT side seems to come with a business process management feature. And so they’d like -- they’d really like to integrate all of those things into a single architecture that can be centrally managed and aligned with business goals and policies.

From the vendor side, a key trend that we see happening and we’re going to talk a lot more about this, I imagine, in this call is consolidation and there’s a two phase consolidation. There’s consolidation and integration of different vendors offerings via support of standards or alliances and there’s consolidations of the companies themselves.

If you look at the history of other markets in this arena, you see that as user needs evolve, companies tend to come together to come up with more complete solutions and that often leads to vendor consolidation. On the service-oriented architecture side, I’m working on a survey that we’re going to field very soon about SOA performance.

It turns out that a lot of users tell us now that they gotten their -- their hands dirty and their feet wet, if you don’t mind mixing some metaphors here, with SOA. They are looking to figure out common taxonomies, and vocabularies, and terms so that when business people and technologists talk about SOA in terms of performance and business value, they want to increasingly be singing the same song, from the same page, of the same hymnal, in the same key, and that’s not really going on as much as they would like.

And on the vendor side, we see the same kinds of consolidation trends happening as I alluded to for BPM. And that’s my top line message for this discussion and I will be quiet now and turn it over to Tony.

EB: Okay. Thanks Michael. Tony Baer now.

TB: Thank you, Michael. I’m Tony Baer and I’m the principal of onStrategies. We’re a consulting firm. We’re -- I’ll like to say we tend to focus more at the ground. How do things actually work; how does big vision actually work on the ground level? And there are several -- I mean, actually kind of waking up this morning of the consolidation of the industry just kind of smacked us in the face with a couple of very fresh acquisitions.

Well, of course, Oracle and BEA agreeing in the middle of the -- in the dead of night to finally -- to meet halfway and that has some very, you know, major implications in the marketplace for middleware that supports service-oriented architecture. Also, on the BPM side, you know, I’ve been just noting over about the past six months and I think, you know, the beginning of a trend of where a lot of tools that try and focus on BPM.

And I’m talking about tools that are not necessarily say; adjuncts of major middleware platforms are -- are looking to try and do what I call dial direct. They’re trying to find ways of making process models more directly executable and there’s a -- has some fairly interesting implications with regard to the roles that, you know, business analysts and developers play. It also has some very interesting implications on basically who the lineup of vendors are, you know, in terms of who’s going to be driving the architecture to actually integrate your business processes.

There’s also hints of another subtext that’s, you know, which I mean, unless you’ve been living under a rock lately, you know, a lot of people are very concerned about the economy, you know, it might be stupid to borrow a line from a past or presidential campaign. It’s kind of hard to ignore those overtones this week, and there’s been a lot of discussion through the, you know, through the blogosphere -- through, you know, with the number of my colleagues about how SOA projects will fair given the fact that at least in the US, maybe not the rest of the world, that we may be looking at a fairly significant economic downturn.

There’s been a lot of back chatter about is architecture taking a backseat. So in short, as I said this is also a discussion that can go on for hours but, you know, at elevator pitch level, those are basically the three major trends that are basically breaking out and just sort of hitting me in the face.

EB: Thanks Tony. And Ronan Bradley.

RB: Thanks. Well, my -- my talk tips for the coming year, is the first one is that we’re going to see the next phase we’ll have call "the grand unification theory of infrastructure," but the gradually the boundaries between what used to be very distinct categories began to blur together and they all become one fundamental block of -- of infrastructure. So not only BPM and SOA, obviously, merging together but we’re going to see in the next year areas such as business intelligence very much coming into the mix.

I would expect if we had one of these in 12 month’s time, we’d be throwing business intelligence in there and quite possibly also, complex event processing and architecture as well. Now, the reason for this -- this unification is really partly because there were really artificial and technically driven reasons for why they were distinct in the past but also as people move much further into having a fully integrated infrastructure, they realize that they begin to need to add in these additional high-level levels such as BPM and business intelligence and so on.

The second trend to spot, I think, in the coming year is the growing significant of bottom-up BPM where you’re going to see IT architects driving more BPM projects having already invested significantly in service-oriented architectures, now needing ways to justify and maintain that investment through ’08, which has -- has been said earlier could well be a much tighter environment in terms of investment. And that growing audience of BPM tools is certainly going to have an implication in terms of the use of those tools and also the way the vendors take the products forward.

EB: All right. Thanks very much Ronan. And Keith Harrison-Broninski, are you still there?

KHB: Okay. I think from my perspective it’s probably a little different to the others that we -- we heard on this podcast. But I should introduce myself. My background in the theory of human collaboration. And my company Role Modellers -- its vision is to introduce into the marketplace a solution to the -- the problems that are testing organizations of all kinds in this respect.

And their problems range from very large scale ones to how to streamline human activity across large organizations down to the very most micro level, which is how to deal with the volume of email that you individually as a -- as a worker receive every day. So people that tend come to me and that I talk to mostly are people who are worried about this kind of thing and that and that’s not purely a technical perspective, that is often not a technical perspective at all, it’s an administrative organizational managerial sort of perspective.

So -- and I just thought I ought to make that qualification off of my predictions for the year because I think probably I hear from a different type of person whose balance and views in some of the other people who on this call. And what I’m hearing is it’s very much what’s sort reflected by today’s news really that we -- we’ve seen of a return on of the BPM market to vendors who very much come from hardcore technical programming background like Oracle’s database and that’s on hardware and operating systems vendor.

And nor do I think the BPM marketplace has retreated from its original vision. The -- the original third wave vision for BPM was about process management of the entire organization. It was a very grand idea that you would be able to understand in a business way exactly what was going on and then drawing down from that the technical implementation.

I think we’ve seen rather of a -- a reverse in the trends in the last few years and BPM and the associated technologists and productors, SOA and BRM and CP and BAM and business intelligence and mashups and so they’re largely technical tools for use by technical people. So I think they get confused by this -- by this sea of acronyms. I think they’re starting to worry about it rather than how to access the possible return on investments of -- of such of a huge wealth of new and computing technology. And also the administration -- I see it standing up beyond what they can predict.

People are finding very hard to assess how much overhead there’s going to be to implementing all these new technologies. So in general, my predictions for the current year, and as I say these tend to be based on what I hear from the people that -- that come to me. Based on some certain market realities that are not particularly to do with IT, I mean, in particular, I think my main prediction is the rise of business versus outsourcing.

I think this is going to be a very large thing indeed. I’ve been talking recently with some outsourcing vendors and what I hear from them is that they’re scaling up their operations in all sorts of ways and I think companies all over the world are looking to outsourcing as a much bigger thing than they every have before and considering outsourcing very large chunks of their entire operations. And -- and this is affecting their attitude towards technical solutions they might be adopting and there’s three particular ways in which I think it’s affecting them.

The first is that people want to know at a very high level what processes they have. And this is process architecture and there are levels to process architecture but what you need to think about is strategic processes, tactical process, operational processes, and you need to understand how these all fit together. You just need to understand how processes fit together as you go down the managerial hierarchy of an organization; this is quite a complicated thing.

And then there’s -- some of this related to choreography but not choreography in a technical sense of -- of language like WSCDL but choreography in the sense of trying to assess how you can thaw them out] these processes to other organizations. It's how you can keep this -- what your department is going to do and because of the scaling up of business process outsourcing, I think this is becoming a much more complex and exciting field, I think, for a lot of people.

I think people see a lot of advantage to be gained from this and in -- as globalization drives costs down in every area, there’s a lot of scope of capacity for this market share, so that’s the second thing, the focus on choreography. And the third thing I see is that some people are -- are looking for ways to streamline the cost of implementing processes and this isn’t just about adopting new -- new technical techniques processes; it’s about -- it’s about the administration of processes so that’s related to some of the comments we’ve heard or -- so far today on process infrastructure, but I think it also to do with the human workers around processes and the administrative and system administration type work.

The IT operations and IT alone and frameworks like are useful but they don’t go far enough for a lot of people who are looking for higher magnitudes levels of improvements so they’re my three predictions, process architecture], a wider view of choreography and people seeking more improvements and efficiency of process administration.

EB: Okay. Thank you Keith. Wonderful. So I guess what I’d like to do now is actually potentially go back to have a conversation. I think the most present thing on my mind today, at least, probably just because I’m, you know, in charge of running a news site that has a lot of breaking news going today and that is what Tony brought up about the consolidation in the marketplace and I know also Ronan brought that up too. So do either of you want to take a stab at going a little deeper into the consolidation inside the marketplace and BPM and SOA and BI and all these tools kind of coming together to a small number of companies that are literally trying to provide one stop shop kind of solution.

TB: Sure, I’ll -- this is Tony, I’ll -- I’ll take the first shot at it. I think the obviously point I would very much agree-- I would very much agree with -- with Keith just now and, you know, everybody else about the fact that basically enterprise customers don’t really care about technology silos, they actually -- they want to get their processes automated and they need to get, you know, they need to also have a clear window on their operations and also have the ability to conduct analytics without having to go shell out into separate tools or call on separate specialists.

And I think the best example of what’s, you know, occurred today are, you know, are -- I mean, take a look at the Oracles, you know, Oracle BEA transaction. And Oracle, you know, has BI tools. Of course, it does have relationships with some external providers like Informatics but still it has BI; it’s building a BPM. Of course, BEA, you know, acquisition a couple years ago of Fuego has its own BPM stack.

And regardless of the -- the fate of -- the ultimate fate of the BEA technologies, once they are absorbed by Oracle, it’s still a clear validation that the major, you know, software platform providers are intending to provide a one stop shop experience for you so that you don’t have to go to a separate tool for analytics, a separate tool to do process management, a separate tool to do [0:15:14].

I mean the fact is, you know, for instance, look BAM, Business Activity Monitoring and business intelligence, they’re really two faces of the same coin just one tends to be a little more real-time than other and; therefore, why should real-time analysis be any different from the type of, you know, traditional BI analysis that was -- that was sort of a look back at historical trends.

Why should it be different? We have the technology, we have the virtualization, we have change data capture, we have all these pieces and we have an architecture, SOA, that it allows us to essentially abstract all this so why not put all those pieces together. On the other hand, though, I will take a little bit of a decent to all of that; I think there is still a major tug of war going on.

I agree that BPM vendors recently have lost some of the initiative to the platform folks more just for a brute power play standpoint in terms that the platform folks are just amassing all these assets. But the BPM folks are [0:16:05] trying to fight back and you actually have some fairly big names that are trying to craft some alternative strategies, I mean, SAP, Microsoft are each looking at BPM strategies that are going to try and make models directly executable.

And they’re -- in a way they’re -- what they’re to say is you don’t need all the same middleware to do this, you don’t need the co-generation, you don’t have to do all that. Well, I don’t think it’s ever going to be as simple as all that but I do feel that it’s just symptomatic of the fact that there’s still going to be a battle ongoing between the business people and the IT people as to who controls the business processes and who controls the integration automation of them. So I would sort of -- I don’t want to say that any of this is a done deal, I think there is still some trip valves that are still going to go forward.

RB: I think I’d just like add to that that one of the -- the sort of the big trends in -- in the software industry in towards consolidation and -- and related to that is downward price pressure particular in the infrastructure software and that’s partly driven by globalization and also by a better procurement practices and also consolidation among the traditional buyers of infrastructure look at financial services, you know, constant and continuing consolidation.

So that’s really driving the vendors towards the big vendors trying to build larger and larger packages that they can sell at high levels in the organization. In particular, to try and jump that hurdle away from the IT side into really being able to sell a solution into the business side and I think a lot of the acquisitions around business intelligence or BPM is really feeding into that, trying to provide something that they believe that they can go into the executor suite and sell a solution which will make sense to them rather than relying on -- on what is infrastructure concepts such as even with -- with SOA.

I think the -- the other -- the other side of that is that what we’re really getting is almost an analogist to the -- the gain [0:17:52] situation where we have, you know, Microsoft and -- and [0:17:54] we’re bashing each other heads in to get an even more powerful gain [0:17:58] in the course. What -- what I wasn’t really doing was solving the problems that the majority of the market wants solved and then in came Nintendo and took the show.

But I think there’s certainly an opportunity as we see the Oracles and the IBMs just pile the money into providing these -- these mega platforms, there’s opportunities for other vendors to -- to steal the match with. Now, as -- as it’s just been said, with SAP and Microsoft potentially coming in with something that is actually doing something different, not simply that they’re going to have three truckloads of software arriving at your front door and, you know, 400 consultants to give you even more complicated solutions but actually provide something that is going to take a different angle on -- on the same problem and not just use brute force.

MD: Liz -- Liz can I jump in here?

EB: Yeah, sure Michael, go ahead.

MD: You know, I -- I have to vehemently agree with what was just said. I mean, having -- having been doing this for longer than I care to admit, 30 years like I said earlier. You know in the -- in the early days of infrastructure management, there was separate infrastructure management tool for every single darn thing. And then there was talk of building these gigantic frameworks that would integrate everything and no one could figure out how to afford them, how to make them work or how to use them effectively.

And over time, some balance has been struck between individual tools managing individual parts of the infrastructure and additional tools used to consolidate and concatenate the input and output from those [0:19:22] into actionable information people can actually understand. And this is, I think, where the BPM/SOA consolidation conundrum is headed and -- and I -- I agree that there is an opportunity for an SAP or Microsoft or even perhaps a company we haven’t seen yet to come along and bring a new vision of how you consolidate all of this stuff together and turn disparate [0:19:48] data points into actionable information business people can understand and use.

But the -- the key challenge, I think, one of the key underlying challenges and I think Keith hinted at this a bit is who is going to own the process by which processes are defined, agreed upon, modeled, structured, all of that stuff. Is it going to be IT? I hope not, and I think not, but possibly in some organization. And is it going to be business people? Well, perhaps they -- but then you run into the challenge that I’m seeing users talk about sort of quietly or at the bar at the end of the conference there or whatever.

Whose modeling tools are you using, and whose models do you want to make directly executable, and how do you distinguish amongst the various characteristics of the models and the modeling tools being used? And frankly, one of the reasons I’m a big fan of solutions like -- like Role Modellers is that the approach focuses on people and what they do and not on technologies and what they can do.

And I think you’re going to see at the end of the day if the traditional vendors don’t deliver solutions that convince the CFO and the line of business people that those solutions are crafted to map to what people actually do and need to do, then users are eventually going to throw their hands up in the air and they’re going to say, I’m going to wait for the people who already make the software my people use, Hello Microsoft, to deliver features that wrap all this abstraction behind interfaces users already use and are familiar with. And I worry that if we don’t see the other vendors come out with solutions that address those needs that we’re basically going to see all this stuff disappear behind a cloud of Windows software or its equivalent.

EB: Yeah, so was Keith trying to get in there?

KHB: Yes, thank you for that Michael. I think that -- that’s a terrific contribution to this and Mike, I agree very much indeed. I think we’ve seen that -- a kind of continuous swinging to and fro over the last ten, 15 years between the mighty powers that be in the software industry and decentralizing force of the internet. And -- and we’re seeing a significant stage in that battle at the moment with industry titans like Oracle and some who themselves are major contributors to the open source movement.

At the same time, what their commercial interest is as it’s always been to get people to spend large amounts of money on very large products. And I hear all the time from business people who are deeply, deeply suspicious of this approach. They don’t see reason why they should trust it when they -- especially people who’ve been around a while, they’ve seen it all before and they’ve been through ERP installations and the AI installations and -- and they have the same promises and almost the words often from the same people, people who look almost the same.

And they don’t see why they sure believe it this time now either. They -- there’s always been massive consolidation and integration and streamlining promised and it’s always a big [0:23:02] solution. And even at these days, it looks slightly different in this -- and there’s more standards -I mean, more standards than themselves don’t make people feel more comfortable. If anything, they make them feel slightly more confused. So I think you hit the nail on the head.

Things are going back to a very business focused, a very quite hardnosed attitude of what business are saying. I need to see demonstrable benefits and I don’t want to spend any money at all on things if I don’t have to. And the -- the rise of outsourcing that I eluded before, I think is driving that even more because if you’re not in the end going to be responsible for a process, why should you implement it.

And until you know you’re going to own that process, you’re not going to want to spend any money on it. So you people are thinking it’s much more sensible to start by working out what we’ve going to do, what partners are going to do and get quite a long way down the line with thinking about that and looking at management advantages from process orientation in the wider and the non-technical sense before investing in -- in any more large infrastructure project.

And on that subject, I just have one more thing. I know I [0:24:02] on a bit but I’m try and make it quick. I think the other thing people are very concerned about is individual productivity enhancement because people are aware that these days with some of the work being commoditized, they’re losing a lot [0:24:16] advantage through inefficient use of individual time, individual worker’s time and especially if they have real means of even seeing that let alone even managing it. So I think this is a -- a focus area that people are very concerned about.

They -- they see it in their own emailing inboxes swelling out of control every day but they’re not seeing any solutions from the big players about their [0:24:35] that makes them very concerned as well and gives them yet another reason to distrust very large frameworks.

EB: That actually leads me Keith to another question I wanted to ask the group so thank you very much for the segue. And that is about in recent days there’s been a lot of heralding of diminishing IT budgets not having enough space for these large investments such as SOA. And I know Tony blogged about this on his onStrategies blog pretty recently. Tony would you be -- would you be interested in saying a couple of things about that and then kind of updating the group on what’s been going on in the blogosphere on the subject?

TB: Well, I’ve been kind of tapping into like all the stuff that’s been going on around me so I may be in the eye of the hurricane here.

EB: Yeah, yeah.

TB: Please don’t shoot the messenger (here's the article). But I mean, it -- it’s obviously when -- when you hit a downturn, I mean, we’re all wondering what -- how’s this going to impact us. And in this case, we talk about basically transitions like SOA. You know, it’s a pretty obviously question. We’re, you know, we’re about to at least here in the states we’re about hit a down cycle. How’s that going to impact things? And I’ve gotten a lot of -- actually, this -- this all was kicked initially with a posting from -- from Brenda Michelson over at the SOA Consortium where basically we’re most the -- we’re sort of an informal poll of members where, you know, that -- well, most of them expect to continue their -- their project -- their projects to continue in the coming year.

And then I started to get some, you know, posts from my, you know, my colleague Ron Schmelzer over at ZapThink who was saying, you know, he’s very concerned about the fact that the Europeans seem to be a lot more proactive on SOA architecture than -- than the Americans are. And besides the fact that, you know, the economy over in Europe is not like it is here. I mean, like it -- I don’t know if things are booming in Europe but they’re not hitting the floor like they are here, they don’t have the same economic pressures that we have so I’ve been hearing a lot of this lately.

My take on this is that, okay, just looking at the US, I think the analogy is the -- or the comparison is the 1990 IT recession rather than the 2001 IT recession. And the reason that even though you did have some expansion in the ‘80s, I mean, it was a pretty big expansion for the time. It was nothing compared to what we went through with both the Y2K and dot-com bubbles. So this -- so on this go round, IT is a lot more downsized, it’s a lot less fat to lop off. So my sense is that on one hand just from a general standpoint, I don’t think the contraction is going to be as let’s say catastrophic if you want to use that term as it was in the post-911 days.

On the other hand, what -- what does say for initiatives like SOA which are transformations issues, it’s not -- I mean, it’s not something you do as a tactical project unless you’re doing let’s say a pilot. Well, the conventional wisdom and what the experience has been, you know, here at least in the side is that when you’re IT dollars are, you know, your budgets go down, that longer term projects tend to get deferred, but I’m not -- I don’t think they’re going to get canceled. I mean you take a look at the 1990 recession.

Well, at that time we were going through -- starting to go through another transformation basically downsizing from the mainframe, which -- well, they call it “downsizing the client server” and also eventually to the 4GL RAD tools that made the client side of client server very popular. That didn’t kill that innovation. Instead of client server hitting its peak in 1992, it happened around 1994, 1995 and I think the same thing is going happen with SOA here. The current -- the downturn in the US which is likely to happen whether you call it recession or not is not going to kill SOA projects or BPM projects but it may -- put it is going to stretch them out.

EB: Absolutely. Anyone else want to jump in on this topic?

MD: You know at Aberdeen Group, our surveys constantly asked people about where their budget are going, are their budgets going up or down in various arenas. And up until this past year, it seemed that the survey respondents have been predicting increased spending in a number of key areas but I wonder if 2008 isn’t going to be a year in which we see the brakes put on some of that.

I’m not convinced you’re going to see a lot of companies all of a sudden making draconian cuts in their budgets but I am convinced that you’re going to see investments be placed under a lot more scrutiny and this is going to amplify the need for those who are advocating investments in things like BPM, SOA or any of these other let’s call them “IT enabled” or IT empowered supposed solutions”. They’re going to have to make pretty strong business cases about every investment they’re going to make in 2008 and beyond.

And frankly, being a user advocate and one of these people who believes that you shouldn’t spend money on stuff that doesn’t deliver business benefits; that can only be a good thing even though it may be disruptive to the plans of some people who are trying to move forward in these arenas. I think stepping back and asking fundamental questions like, why are we doing this and where is the business benefit can only be a salutary exercise for everybody who engages in it. As I like to remind people when I give presentations, we call this industry “information technology” for a reason. Information comes first. Technology is what’s supposed to enable access to and leverage up the information; it’s not supposed to be the lead dog in the race.

RB: I certainly agree with -- with that in terms I think what -- what would happen in the SOA context is it’ll be increasing focus on, you know, what people some people guerrilla SOA or pragmatic or incremental SOA.

And I think having -- coming back to a point earlier on that was made, that a lot of those projects -- the SOA projects are going to be more and more focused on how we enable things like outsourcing and learning the ropes around SOA through real projects rather than through too many initiatives. And I think while that kind of disadvantage in terms of a long-term rollout, I think there are many advantages in terms of companies that’s less likely to over invest than look back and say, well, we really go no benefit if it’s very tightly line to business project. I think that’s going to help.

I think the -- in the terms of -- of BPM, I think it may well help the traditional BPM projects. I don’t think it’s going to help the vendors providing the convergence between BPM and -- and SOA because I think primarily what they’re doing is they’re taking BPM products that were really designed to stand alone and try to just graft them into an existing stack sometimes with very minimal actual technical changes to make that an effective merger.

And I think the third thing that’s going to happen after the slowdown is also the growth and importance around open source. As we’ve seen before, open source for very obvious reasons becomes more attractive -- attractive in terms of the IT community because reduced cost and also -- where there’s reduced cost, there’s less pressure on -- on headcount reduction, frankly; and therefore, in the case of both SOA and BPM this may well aid the -- the open source companies that are trying to develop and promote those projects.

EB: Okay. Thanks very much. That sounds like a good ending point. Actually, thanks very much Ronan Bradley and to all the panelists today. We had Tony Baer of onStrategies, Michael Dortch of Aberdeen Group, and Keith Harrison-Broninski of IT Directions and Role Modellers and also Ronan Bradley, of course, with Lustratus Research. So thanks really to all you for really incisive, interesting comments today and I hope this will be part of our continuing series in 2008 doing panels and discussions on the new of the days and topics that are of interest to all of us. Thanks for being with us today.

Announcer: You’ve been listening to a podcast presented by Elizabeth Book, editor and chief of ebizQ. For comments or questions, please send an email to Editor@ebizQ.net or visit Elizabeth’s blog at ebizQ.net/blogs.

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Editor's note: Last week's acquisition of Cognos by IBM continues to fuel discussion about consolidation in the Business Intelligence marketplace, and the large enterprise IT providers now all have a major BI tool in their stack. The following is a transcription of a podcast which discusses this news in the context of the entire market. For questions and comments, and to learn more or participate in ebizQ editorial podcasts, please reach Elizabeth Book at editor@ebizq.net. Participants of this podcast are Beth Gold-Bernstein (BGB); Tony Baer (TB); Michael Dortch (MD); and Marc Andrews (MA.)

BGB: Welcome, everyone, to this ebizQ podcast. I'm Beth Gold-Bernstein, VP of the ebizQ Training Center. With me today on this podcast are Tony Baer, Principle of OnStrategies; Michael Dortch, Senior Analyst at Aberdeen Group and an ebizQ blogger; and Marc Andrews, Program Director of Data Warehousing at IBM. I want to welcome all my panelists. Thank you for joining me.

Today, we're discussing IBM's acquisition of Cognos. Now, Tony Baer pointed out in his excellent blog post, which you can read on our site, ebizQ.net, that barely a month ago, SAP announced that it was buying Business Objects and roughly eight months ago, Oracle announced its acquisition of Hyperion and now, IBM yesterday announced its intention to buy the last independent tier I pure play business intelligence vendor, Cognos.

Now, Tony -- where does this deal place IBM competitively in the market? Is this merely a case of catch-up, or does it give IBM some competitive advantage?

TB: Well, I think the bottom line is that it really fills the hole in the donut for business intelligence for IBM. And that, for the past several years, it seemed that as part of its larger information management strategy that IBM was building a BI strategy, which had everything except BI in it. I mean, originally, IBM had sort of backed into this market with an old OEM deal with Hyperion and back then, we always kept, you know, the conventional wisdom was "Why didn't IBM buy Hyperion?" We're talking about five, six, seven years ago.

To read the rest of this transcript, click here!

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I just threw down a super-cool podcast with our own IT Directions blogger Keith Harrison-Broninski, who doubles as the CTO of UK-based Role Modellers, which is now beta-testing the newest version of HumanEdj, its human-interaction-focused email efficiency tool.

I am actually about to download this thing to use in my own office. It basically promotes efficiency on one's own desktop by organizing it based on the assumption that one might actually need email to accomplish work.

Listen to the podcast here and then DOWNLOAD the free software here. Your employer will thank you!

Listen to or download the entire 9:50 podcast below:

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Read a summary -- or listen to a quick preview podcast -- of one of our SOA in Action Keynote addresses. This one is from Forrester's Randy Heffner. He discusses how to transform savvy tactical implementations into a grand strategy for effective overall SOA.

Check it out here!

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I interviewed Applix President and CEO, Dave Mahoney, on Applix' recent acquisition by Cognos for a whopping $339 million.

Listen to or download the entire 9:32 podcast below:

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A full transcript of the podcast follows Dave's biography.

About Dave Mahoney:

David Mahoney has been a director of Applix since October, 1992. Mr. Mahoney was Chief Executive Officer of Verbind, Inc., a provider of real-time behavioral analytic software and event triggering technology, which was recently sold to SAS Institute, since May, 2001. Prior to joining Verbind, Mr. Mahoney served as President and Chief Executive Officer of LeadingSide, Inc. (formerly Dataware Technologies, Incorporated), an e-business solutions provider, from January, 1999 to April, 2001. Mr. Mahoney served as President and Chief Executive Officer of Sovereign Hill Software Inc., a knowledge management software provider, from January, 1998 to December, 1998, when it merged with Dataware Technologies. Mr. Mahoney served as Chairman of the Board and Chief Executive Officer of ePresence, Inc. (formerly Banyan Systems, Inc.), a networking software company he founded, from 1983 until May, 1997. From 1973 through 1983, Mr. Mahoney was the Director of Communication Product Development at Data General.

The speakers in this podcast are Elizabeth Book (EB) and Dave Mahoney (DM.)

EB: Hi, this is Elizabeth Book, editor-in-chief of ebizQ, and welcome to another ebizQ podcast. Today, I welcome Dave Mahoney, president and CEO of Applix, a Westborough, Massachusetts-based performance management analytics company. Thank you for being with me today, Dave!

DM: My pleasure, Elizabeth.

EB: Great. So, I understand there’s been a bit of news from Applix in the last couple of days. Can you possibly tell me a little bit about what’s been going on with you? I guess we should tell our listeners that basically, Applix was acquired by Cognos in a deal valued at about 340 million. And, basically – I’d love to know a little bit about the history of Applix, and why Applix is now an attractive acquisition for Cognos.

DM: Sure, I’d be glad to give you that story, and bring you up-to-date on what’s happening here. And I think the best way to do that is to explain a little bit about where Applix has come from. The company was actually founded way back in 1983 and has been around as a player in the software, generally speaking – the software market. And has been in a number of different software businesses, as a matter of fact.

It started out developing applications for office automation on UNIX and then did some work in the real-time spreadsheet area. And then established a fairly sizeable CRM business before making an acquisition in the mid ‘90s of a company that had a product by the name of TM1, which was a unique technology. It was an in-memory multidimensional database that was designed to work on PCs and then it had been expanded to work in more powerful platforms.

Through the rest of the ‘90s, Applix as a company had a lot of variability in the business during the bubble, went searching for a longer-term business to be into. And in the early 2000’s, settled on focusing on a product area generally speaking in the analytics space, which eventually became a more focused offering in the performance management arena.

And then, in 2003 – we took a fairly dramatic step. I joined the company in 2003. The company was undergoing some fairly dramatic change at the time. And we jettisoned all aspects of other software business. We had some CRM business. We had some Linux business. And we essentially sold all of that off and refocused all of our energy on this analytic platform that the company had purchased in the mid ‘90s.

It was very interesting timing, because it gave us the opportunity to essentially clear the decks and refocus on this product and the assets that we had to work with – other than the product – was a very significant and very loyal, dedicated customer base and a group of partners who really believed that this technology was totally unique and that they believed they could do things with it that they couldn’t do with any other vendors’ technology at the time, Cognos, Hyperion and Business Objects. Microsoft. Anybody.

So that was a pretty exciting proposition, and we decided to take the cash we had and refocus the business and rebuild it and see if we could create a sizable player in the Business Intelligence market. In 2003, it was the first time the market started to talk about performance management, which is not the traditional business intelligence reporting business but is more geared towards helping finance organizations improve their overall company performance by doing more complex analytics, more operational analysis, dealing with many, many different sources of data, types of data and doing this all in increasingly real time.

And this is something that TM1 was totally unique at doing. So starting in 2003, we rebuilt the business. Hired Michael Morrison, our chief operating officer in the middle of 2004, who came in and built just a world-class field organization with a combination of very strong salespeople and some very, extremely strong pre-sales people who are very critical to our sales process.

And then we continued to build out the product and add features to it to make it more competitive. It was originally more or less just an analytic engine and then we added reporting capabilities to it, and Excel interface to make it very easily understood by the financial community. We added applications capabilities for planning and budgeting. And then we started to add consolidation capabilities. Essentially rounded the product out and went to market with that. And focused in two areas.

We were focused in selling this product to mid-market companies, where they could buy our TM1 offering and use it for everything. Reporting, planning, budgeting, forecasting, complex analytics and that’s been a good part of our growth. And then in the enterprise, where they may have been using products from Cognos or Business Objects or Hyperion, but they had an emerging need, for which their products were not adequate – either from a performance or a complexity or scalability point of view.

This is where TM1 once again had some unique characteristics. So two parts of our business, the mid-market and the enterprise, selling into customers who already had a BI platform but where the platform just wasn’t strong enough to extend into applications areas they had in mind. And that’s the way things progressed, and that’s where we’ve gotten ourselves to today. We’ve got about 220 people in the company. 3,000 customers around the world, global presence. We’re in every major market in many different verticals.

And, as a result of that focus and product-uniqueness and some good execution, we’ve been able to grow the company steadily for the last four years at rates significantly greater than any of the other competition in the space growth, in terms of revenue and license, in excess of 30-35 percent, increasing profitability and I think all of that added up to making us a very interesting and unique player in this space. And I think that’s ultimately what caused Cognos to come looking for a company that could help them execute better in this financial performance management area, and – quite frankly, we believe that we’re one of, or just about the only entity out there that they could look to at this point in time to fill that hole and, hence, I think what we would argue is a terrific evaluation.

When we started this turnaround back in 2003, the company’s market cap was about 25 million and here we are – four years later, and we sold the company for 340 million. So that’s quite an increase, almost a venture capital return over that period of time.

EB: Absolutely. It’s quite impressive. I wanted to ask one technical question, possibly – you seem to have covered a lot of the history of what Applix is all about but not necessarily what the unique offering is and what it presents for Cognos. Now, Cognos has basically been well-known for delivering analytics solutions to large enterprises, and Applix has – as you said – generally been focused on the mid-market. So can you possibly chat with us about what IT managers in large enterprises might like about your product and howthey might benefit in terms of using your performance management software?

DM: Sure! Most of the products out there, the historical, the BI products. Products that are used for historical reporting, are all disc–based products, all good products, but they are designed with the concept that people want to just read the data. And so, all the data is pre-structured, pre-calculated, stored on a disc and you can stream these reports and views of the data out very quickly. And the fundamental assumption there is that the data is going to be fairly static and not changing frequently.

Well, in today’s world, data is changing constantly. And I think IT people are finding that the financial organization, the operating people are coming back and demanding more flexibility in being able to use this valuable data. And they want to be able to play with it and do a lot of analysis and they are also acknowledging the fact that this data changes so frequently that a report that was accurate a few hours ago may be totally inaccurate now. And so they want to have an environment in this changing data can be viewed immediately in the form that it is most useful.

What our product does, is takes advantage of large memory capabilities and 64-bit technology and it’s a technology that’s written to reside the data, the models, the rules – all reside in memory. So, as data changes, rules can be used to recalculate the data instantaneously. They get the ability to change their planning model and immediately see what the result would be over a period of time. And it’s this immediate feedback that the market is demanding more of.

I think IT individuals, IT managers, executives – you know, people who are developing corporate applications are going to want to really understand the value of in-memory 64-bit environments because it can be a big part of the future. I think all major vendors are going to have to go in this direction. And now Cognos is clearly going to be in a much more leadership position than they have ever been before, with a core technology that can do things that none of the other players can do.

EB: All right. Well, thank you so much for your time today. Dave Mahoney – president and CEO of Applix, which just got acquired for 340 million, approximately, by Cognos. A very exciting company and a very exciting move for Applix, I’m sure. So, Dave, thank you so much for your time today!

DM: Thank you, very much. I much appreciate your time.

[End of Audio]

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Listen to or download the entire 8:58 podcast below:

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The full transcript is available below:

Liz Book (LB): This is Elizabeth Book, Editor-in-Chief of ebizQ and thanks for joining us on another ebizQ podcast. Today, I’m speaking with Rob Morris, Sr. VP for Marketing and Strategy at GT Software, a rapid SOA development solutions company for the mainframe. Thank you for being with us today, Rob.

Rob Morris (RM): Thank you, Elizabeth.

LB: So, GT Software is a 25 year old company doing really nothing but mainframe. Can you talk about SOA in the mainframe and maybe give us a state of the market perspective on what is going on?

RM: You know, it’s really interesting. Within the mainframe space and it’s long been known this way, there’s still vast amounts of corporate data, corporate applications and core business functionality that’s locked up in the mainframe and certainly the problem the mainframe integration has been around for quite some time. With the advent of SOA as an approach to maybe unlock or provide a better means to approach how I leverage that data and leverage those applications, what we’re seeing is that companies are taking what I would consider a very simplistic approach to solving the problem. I think it’s things we’ve been seeing in the industry lately that doing web services does not mean you’re doing SOA and therefore, you cannot expect to realized the benefits of SOA if you’re just focused on web services.

So, for a lot of reasons, we see mainframe organizations simply stopping at the term Service Enabling or web service enabling the mainframe and not really getting to the broader spectrum of what SOA can mean for them in the context of the mainframe. So, that’s everything from not getting the right resources involved on the mainframe, not focusing on how I define services and what are proper services vs. just worrying about the mechanisms of how I communicate to them or something a bit broader and something not as obvious to how am I going to incorporate things like my batch systems which are still prevalent in the mainframe world and have those participate in my service oriented architecture.

So, again, people continue to take this very simplistic view and unfortunately from some of the vendor perspectives it’s a view being promoted out there or being confused by what a lot of people are talking about out there and the complexities around it and when you start to break it all down, you realize that they’re not going to achieve these benefits unless they take a step back and take a broader view of how they’re going about this.

LB: OK, you mentioned batch processing and people don’t really associate batch processing necessarily with service oriented architecture. Can we talk about that?

RM: Actually, it’s a very, very interesting and intriguing development that, frankly, we’re very happy about. We’ve been working on it in conjunction with some customers and if you take a step back on this topic and start to think about it in the financial services industry, specifically insurance and other industries like that, batch is a huge part of how they continue to run their businesses. It’s really the only way that you can continue to process the volume of transactions required on a daily basis to do things like maybe claims processing or payroll remediation, things of that nature.

So, almost, you know, kicking and screaming, batch is being drug into this world by the simple fact that every day there’s another web service, there’s another service that those systems need to talk to.

And let me give you an example; I’ll give you a couple of examples: In the insurance industry, if I’m processing auto insurance claims, one of the steps in that process is to validate the vehicle ID number, the VIN number against data that I might get from my state or federal government data sources. Well, where that used to be a daily download of data is quickly becoming a real-time web service request.

So, here I am with a batch cycle, if you will, I maybe have 3 hours to process four million claims on a daily basis and now, somehow, I have to introduce a full round trip web service call to do my VIN number validation. So, I start to have to think about how am I going to deal with a window, a batch window, that I cannot alter because I only have so much time to do this work. I have a certain volume of work I have to push through there and now I have to introduce the overhead of web service calls.

And so, we’ve been working very closely with the organizations on how they deal with that and, in fact, the other side of this equation is as companies themselves introduce web services into their own world and take and SOA approach, we’re finding that those batch systems need to then talk to those new systems so with one of our customers that works in the health care industry, they were trying to deal with the fact that in the health care industry there’s now something called a national provider ID – an NPI.

Essentially what that means is that all doctors nationally now have a number associated with them and that’s how those doctors should be referred to. So, as opposed to the time when every company would associate their own proprietary ID, we now have a national identifier system so we have a customer that took an SOA type approach and built the service to do a translation between their proprietary numbers and the national provider numbers. So, again, at night, while they’re trying to process claims, they now have to convert back and forth and they have to do that in such a way that they don’t compromise their batch window. And, in working with them, we were able to achieve essentially a full round trip web service call in a little less than 12 milliseconds which enabled them to maintain their batch window, add the translation process and do all this in an SOA type fashion. Again, this is one of these requirements that I think in the next 6-12 months is really going to come to the forefront in the financial services base.

LB: Thank you. I guess I’d like to ask two things at the end of this. First, can you tell me in the context of GT Software and the experience that you’ve had at GT Software, a long-standing company with a lot of experience in this space, can you talk about some best practices for mainframe/SOA integration?

RM: Sure, absolutely and it’s an area that we’ve tried to take ahold of and work as much as we can to help educate the market a bit that are companies that are achieving unbelievable results including the mainframe in their SOA strategy and I would say at the forefront it’s thinking about the mainframe as you start to lay out your SOA strategy for many, many organizations we find, it’s a bit of an afterthought and when you start to take a step back and say, you know what, if this is going to be important to me, if that data and the applications are important and the participation is important as I am setting my standards from an architectural level, I need to consider the requirements as it relates to the mainframe and what that immediately does is start to get into how I involve the resources on the mainframe. One of the most disturbing that I continue to see in the market is that mainframers are “dissed” if you will, in terms of SOA simply because SOA tends to be driven by more of your distributed, open systems type resources and I hear a lot, “well, mainframers don’t understand SOA” or “these guys will never get their head around how to define the service properly” and I think, in the end, what you see is that’s clearly not true. Since SOA is not about web services and about the technology, it is much more about a collaborative process by which we determine needs or services that make sense in the context of our organization and then we find ways to fulfill those needs, many times on the mainframe is where the data, those applications, that need can be fulfilled and by not including the mainframe group in that process, you’re simply going to be playing catch up after the fact in building systems that do not give you the re-use, the longevity that you’re hoping to get out of SOA.

So, our number one best practices is including it early and getting the people involved. And what that then leads you to are technology decisions to allow you to do both bottom up as well as top down service design. I know we went from a very broad topic to something very specific, but essentially, if you are able to work in a service definition process, working from the top down, that is working from the need that the services is supposed to fulfill and then worrying about how to fulfill it, your technology choices and who you get involved will be dramatic different because you will involve that group from the get-go, they’ll be part of the process and you’ll find that you’ll get maybe a different set of services but certainly services that are more valuable, that give you the re-use that you’re looking for an participation where people are trying to help solve the problem not working at odds with each other.

LB: All right. Thank you very much, Rob. I think we understand a little better about why GT Software is in this space and why it’s considered a best of breed mainframe solutions provider. So, thanks for your time, very much.

RM: Thanks, Elizabeth, hopefully it was of value for everybody.

LB: Thank you. And, so Rob Morris, Sr. VP for Marketing and Strategy at the privately held at the Atlanta, Georgia-based GT Software.

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Last week, IBM announced its intention to purchase Watchfire and I threw down a podcast with the very sharp Mike Weider, Watchfire's founder and CTO. It is also transcribed below for your reading pleasure.

Listen to or download the entire 9:49 podcast below:

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Participants of this podcast are ebizQ editor-in-chief, Elizabeth Book (EB); and Watchfire founder and CTO, Michael Weider (MW.)

EB: Hi, this is Elizabeth Book, editor-in-chief of ebizQ. And this is another ebizQ podcast. Today I am honored with the presence of Mike Weider, who is the CTO and founder of Watchfire, which was recently acquired by Big Blue -- that's right, IBM has purchased Watchfire, or has made a move to purchase Watchfire, I should say. So thank you for being with us, Mike.

MW: Thanks for having me!

EB: Basically, I guess all I want to tell our listeners at the moment is that Mike founded Watchfire 11 years ago in 1996, and this is basically a very exciting move, I think. And you probably had a busy day. You're in this acquisition time. Maybe you're busy a few days. So if you could maybe tell us a little bit about Watchfire and tell us a little bit about, you know, what happened to you during this acquisition time?

MW: Sure! So Watchfire -- as you stated -- has been in business for about 11 years. We were founded in 1996. And really our focus is helping customers to evaluate their online Web sites and applications for problems. And these problems fall into the categories of quality issues that could affect the user experience, privacy and compliance issues that could get them into trouble with regulators, and lastly application security issues.

And I think what IBM and Rational saw through this acquisition was that increasingly we're seeing that security and compliance are becoming an integral part of software development processes. And what we're looking to do with this acquisition and the integration of these technologies is that Rational IBM is really the leader in software development tools and Watchfire is the leader in application security and by combining the two things together, we can help customers to build security into their applications from the start, rather than what exists today where applications are being produced in many times with no security and leading themselves wide open to hackers to exploit these issues to perform identity theft, fraud and other horrible things that we read about every day in the press.

EB: Absolutely. I guess, can you just tell me a little bit more about how you see the integration of security into a larger organization and how you think your work with the other security forces at IBM will be working together. I know that it's a little bit forward-thinking but just any thoughts you could share on that would be excellent.

MW:Sure. So, really the acquisition is being sponsored through the Rational group and that's where Watchfire will be integrated into. In that group, we're really again focused on looking at integrating Watchfire's security technology into Rational's tool set so that developers that are creating applications through from requirements to design to coding to testing to deployment can evaluate these applications for security issues throughout the software development lifecycle so that when they get to the production phase, that we know that these have been properly tested and validated and they can demonstrate compliance and good governance internally and externally.

But secondly, there are other areas outside of the Rational group that are very exciting in terms of the potential synergies that we see here. For one, WebSphere is clearly a huge force in the marketplace and integrating application security with the WebSphere tools will enable again customers to create more secure applications. Thirdly, there's the Tivoli Group, who has a number of security management technologies and by integrating these things together, will provide customers with a broader security metrics and dashboards to really understand their overall security posture.

And then the last one, which I'm pretty excited about, which is the ISS group. Where IBM acquired ISS last year, who has a lot of expertise and market presence in the network security space where they are monitoring systems and infrastructures and Web sites for network vulnerabilities and by combining Watchfire's application security scanning technology with ISS' network security scanning technology, we can really create a Best-of-Breed solution for vulnerability assessment and management.

EB: That does sound exciting! I have to say. And we don't get excited that often here…

MW: (laughs)

EB: But it sounds -- we deal with security every day, not just at work, in our coverage of these technologies but also in our own lives, in our email boxes and in denial of service attacks on ebizQ's Web site for example, as an online magazine.

MW: Sure!

EB: So, we totally get the fact that these are really important things for companies, large and small, and this is an exiting deal. So in terms of security vulnerability testing, if I can confirm this -- you're company really is analyzing Web sites as opposed to networks. Is that correct?

MW: Yes. And in general most of the focus in the past on vulnerability assessment has been scanning networks and IP addresses and infrastructure for security weaknesses, making sure that systems are not unpatched and things like that. And that's definitely an important issue and one that we want to continue to focus on. But we have seen in the last several years is the rise of applications security vulnerabilities. These vulnerabilities are operating at layer seven on the applications that are sitting on top of that network and that infrastructure. And their weakness is in the software applications that hackers are utilizing to exploit these defects and to compromise the applications to get access to sensitive data and other things that they shouldn't have.

So, really, this whole area of application security has been a very fast-growing problem and now accounts for about 75 percent of attacks on the Internet are focused on applications as well as we've seen the two most common application security vulnerabilities, namely java scripting and SQL injection. These have risen very rapidly to be the no. 1 and 2 problems that are reported out there on the Net. So this is an enormous problem that is not really being well-dealt with by many companies, because all of the existing security personnel are really focused on the infrastructure.

Software developers have never been trained on security and so this issue has not been dealt with and is sort of falling through the cracks. So what Watchfire really did very well was to create an automated solution to help customers to mitigate the risk of application security by automating the testing and analysis of these applications for these weaknesses. Basically, we are technology simulate hackers attacking your applications and it's used in the software development process to test the applications and to understand what the weaknesses are. So that these defects can be fixed before the application is allowed to go live.

EB: Okay. And if you could tell me -- I mean, maybe I'll make this the last question, I think we're going a little bit over on time, but I'm resisting the impulse to ask you about, you know, to specifically tell you about my security problems at ebizQ (laughs) and asking you for an assessment. But the last question I want to ask is about your customers. I understand you have 800 customers. And if you could tell us about those customers, whether they're large or small, maybe even what's going to happen to them when IBM completes the acquisition and sort of how you'll continue hopefully to provide the excellent service you're providing to your customers that you are at the moment.

MW: Sure. We have about 800 customers. They fall into verticals that you would assume would interested in security like banking, insurance, various types of financial services, media and entertainment, technology companies, government, organizations, utilities and telecommunications companies. These are the companies that are very concerned. They are adopting ebusiness. And building applications to transact data over the Internet and to interact with their customers and building more sophisticated Web applications and so they're most exposed to these sorts of security vulnerabilities.

They also tend to be some of the larger companies we have, nine of the top ten banks as clients. And a lot of Fortune 500 Global 2000 businesses. But increasingly, this is becoming an issue for companies at, you know, the S&B level. You may be familiar with PCI, that payment card industry standard --

EB: Yes --

MW: -- that MasterCard and Visa and other credit card issuers are pushing. That is basically impacting everybody who collects credit cards, which is almost every company in the world. And so security and applications security are becoming very relevant to all companies of different sizes and shapes. You know, our strategy through this acquisition will be too really ensure that we don't disrupt any of the great momentum that we have. And we continue to provide great Best-of-Breed security technology to our customers and great service, but that to augment and add to that with IBM's, you know, presence in the marketplace, as well as the added resources they can bring to really scale our business.

And lastly, the technology that we discussed previously that they have to integrate our software with, to provide customers with a bigger, larger solution that's more integrated vs today -- it's really a point tool in the puzzle. But to make this really part and baked in and built into systems.

EB: Well, thank you so much, really for your time today Mike Weider, the CTO and founder of Watchfire, which has been acquired by IBM, International Business Machines, who have bought a number of companies in the last couple of years. And we're very excitedly watching everything that they do here at ebizQ. This has been an ebizQ podcast and thank you for being with me, Mike.

MW: Thank you!

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Listen to or download the entire 9:52 podcast below:

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Regarding this week's Salesforce.com and Google global sales deal, I spoke with David Bradshaw, principle analyst in software at Ovum. What follows is the very interesting transcript of our conversation. Please enjoy.

The participants of this podcast are Elizabeth Book, ebizQ editor-in-chief (EB); and David Bradshaw, Ovum principle analyst, software (DB).

EB: Hi, this is Elizabeth Book and this is another ebizQ podcast. Today I am speaking with David Bradshaw, who is with Ovum, an analyst firm headquartered in London with offices around the world. Thank you for being with us, David.

DB: You're very welcome, Elizabeth.

EB: Basically, David is principal analyst at Ovum, covering software and has quite a good history and a background in the software industry and has been really covering it, I guess for about 17 years. Is that correct?

DB:Yeah, that's about right, yes.

EB: Okay.

DB: Feels like a long time.

EB: Yes. So, basically -- thanks for being with us. And we're talking today about the Google/Salesforce deal that took place. And we wanted to get your thoughts on the announcement, first of all. And I guess maybe we can start there. And have a discussion about what this means for the industry and what this might mean for lead generation and how people work on the internet, etc.

DB: Okay. Well, let's think of the announcement as actually being in two parts, really. First of all, there's the announcement of global partnership between Salesforce and Google. That's linking up two very well-known companies in the Internet. Google, of course, is very well known for its search platform and the advertising revenue that that brings. Salesforce, of course, very well-known for its leadership of the CRM sector, the Software-as-a-Service CRM sector.

Secondly, we got a specific from that partnership. Which is the random convolutedly-named deliverable from the alliance is Salesforce Group Edition Featuring Google Adwords, or let's just call that Group Edition for short. That enables you to use, use keywords accessing Google and connect them to Salesforce. So let's deal with the specifics first, because that's probably the easiest part to figure out. This is a linking up of the Google advertising platform to Salesforce that enables you to put ads on Google using key words and then track the results of those ads all the way through to sales. And this kind of functionality has been available to large enterprises who have been able to build the pieces for themselves.

What the Google and the Salesforce alliance has made possible through the Group Edition is that this is now available to small businesses with the Sphere's Five CRM users. And from my viewpoint, that's a very positive contribution to small businesses. Because Internet advertising is an increasingly important source of leads. But, you have to be able to measure the results, otherwise you could wind up spending a large amount of money and getting nothing out of it. What this enables you to do is to see which key words and which placements have brought you the best results.

EB: In fact, what you said yesterday about advertising budgets always -- people always think that their advertising budget is only working halfway--

DB: Yeah, it's --

EB: -- but they don't know which half is working.

DB: Yes, one of the widest known pieces of wisdom about the advertising market is that half your advertising budget is wasted. You just never know which half is wasted. This improves that situation by improving the measurability. Once of the advantages of using the Internet for advertising is it gets more measurable. You can measure click-throughs from certain sites. You can track those click-throughs to customers. And you can track those interactions into sales. As I said, that's been possible for quite a while. The big companies have got those facilities and now Salesforce and Google are placing those kinds of facilities in the hands of the small companies and small advertisers, too.

EB: Right! And what we talked about yesterday, I think, when I first discussed this deal was that you had a higher view of this as sort of a way of altering the way people use the Internet.

DB: Yes. I think this is definitely helping to move more commerce onto the Internet than has been in the past. The problem for a lot of people is that they have on-premise systems and so on, that they depend on. One of the ultimate aims is to move more businesses into a flexible sourcing environment on the Internet where people play for what they use.

So the problem has been, for a long time, that people are depending on on-premise based software that, particularly for small businesses, produce a lot of burden in terms of support costs and hardware costs and lack of expertise. What's progressively happening in Salesforce is it has certainly contributed to this in large businesses, but it's becoming more possible to run your business life as well as your personal life on the Internet, using Software-as-a-Service to do that. Of course, it's by no means complete. There's still big gaps in the capabilities but that's changing gradually.

Software-as-a-Service makes available sophisticated facilities to businesses of all sizes. Facilities that in the past have often only been available to larger businesses and so it's beginning to help level the playing field between the large businesses that spend many millions of dollars building sophisticated systems as they need it and the smaller businesses that don't have budgets and nothing like that size. And it also is helping the controllability of costs, by allowing you to only pay for what you need and what you use.

EB: Right. So this is a Software-as-a-Service concept and it's also a Web services concept, where in general, ebizQ has been covering for many years service-oriented architecture and using the Web as a way to produce reusable services for a client. And, as you said, this kind of benefit has really only been available to large companies. So with sort of Software-as-a-Service and pay-as-you-go pricing, it's kind of changing the way people could possibly utilize the Internet for business. And utilize Web services for businesses.

DB: Yes. Services-oriented architecture is by and large, very much the way that people have built the Software-as-a-Service offering that that they have online. So as well as getting the raw functionality out of the software that you are using online, the Software-as-a-Service, you also have potential to connect together that functionality with other vendors functionality comparatively easily. I have to say. Services-oriented architecture doesn't solve all the problems but it certainly removes a good few of them.

And one of the areas of opportunity is for the many smaller players, particularly in the ecosystems of both Google and Salesforce.com to offer products at relatively low cost and in some cases, no cost. But help join together useful functionality into usable chunks for users of all sizes.

EB: One other question that I had, and maybe I will make this the last question for you today, and that is with the -- I think it's called AppExchange portion of Salesforce which I don't know too much about. And this is somehow connected to SOA, I believe. Or for SOA users? Is that correct?

DB: Well! The AppExchange is connected to Salesforce.com at the moment in that a vast majority of applications on the AppExchange are ones that Salesforce users could use to enhance their CRM capability. For example, I was looking on the AppExchange itself just a few minutes ago and what you find there is not just the applications being listed. But you find people's comments on those applications. And believe me -- some of them are very forthright! If an application doesn't work for somebody, they say so! And they make no bones about it.

On the other hand, if the application works well for them and works with their Salesforce implementation, they will say that too. So it makes a very good place for people to go and look and buy applications. Now, Salesforce is extending the capability to use applications that you don't have to be a Salesforce.com user to buy. They have what they call now their platform editions of Salesforce.com, they recently launched. So in the future, you will be able to become a Salesforce.com subscriber and basically get the infrastructure you need to run any of the applications on the AppExchange that aren't connected to Salesforce.com.

EB: So the AppExchange is not the platform for the Enterprise users.

DB: No. The platform is called Apex.

EB: Oh, thank you! Okay.

DB: Salesforce has done some name changes over the past year or so to try to clarify this. Because they used to call everything every thing the AppExchange. It used to be the platform as well as the marketplace.

EB: Oh, okay.

DB: And it is also a development language called Apex code involved in this too. So, what you have increasingly, is an on-demand platform built by Salesforce that started out as a CRM-only platform. And then the extension came along with partners and now most recently, Salesforce is saying "Well, let's open up the platform to anybody, to use it to build their own applications or buy applications from our partners and run them on this on-demand platform."

EB: All right! Well, I think that's about all the time we have with you today, David. I want to thank you so much for your time. David Bradshaw, principal analyst for software at Ovum, based in London. And this has been an ebizQ podcast. Thank you, David.

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Looks like Business Objects hit a homerun with its acquisition this week of Inxight Sofware. I had a great conversation with Ian Bonner, CEO of Inxight, about the acquisition, and got a great deal out of his explanation how a lot of the things Inxight does, like provide analytics capabilities to its many clients in the government sector, is sure to be a strong asset to Business Objects. Enjoy.

Listen to or download the entire 13:34 podcast below:

Download file

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This week has been all about SAA. Not Systems Applications Architecture, as Tony Baer reminds us was a failed IBM Project in the 1980s, but something else entirely.

SAA here in 2007 is Service-Averse Architecture, a term I coined on Tuesday with the help of a friend (who remains anonymous for his own protection), who was really frustrated with his organization's IT system.

It turns out SAA is the kind of IT architectures that prevail in countless hospitals, financial institutions, governments, and retail companies. The kind of architecture that holds you back, that you simply can't depend on. It's the kind of technology that makes you hate your job, or makes you resist the urge to throw your computer out the window. It makes your job harder, not easier, and it isn't getting better. SAA causes data breeches and slows down commerce. In hospitals, bad information, or no information, can even kill.

But identifying any problem is the first step in its solution.

Today, I offer you a podcast featuring Anne Thomas Manes, esteemed VP and Research Director of Burton Group, speaking with myself and ebizQ contributing editor and SOA evangelist Joe McKendrick.

Listen to or download the entire 15:21 podcast below:

Download file

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Yesterday I threw down a podcast with Nenshad Bardoliwalla, an "übercool" dude who happens to be Senior Director, CPM Solution Management, at SAP Labs, LLC.

We discussed SAP's acquisition of OutlookSoft.

Enjoy it here.

And we put up a bunch of other BI podcasts today. The rest of them are here.

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ebizQ is excited to present the first installment of our BI in Action podcast series, about BI and BPM.

ebizQ's VP for Strategic Services, Beth Gold-Bernstein, in hosting three group roundtable panels of vendor representatives, to hear about the different approaches companies are taking to embed analytics tools into business processes or BPM tools.

The first podcast includes representatives from SAP, IBM, Cognos On Demand, InetSoft and Savvion. The vendors on this podcast almost universally refer to their goal of delivering "real time operational BI." The conversation focuses on how to integrate real time metrics into the business process and put critical information into the hands of decision makers.

I think you will enjoy hearing the different approaches of the vendors, some of whom have pure play BI solutions, several with BPM solutions that incorporate BI, as well as a couple with full scale integration and SOA platforms.

This link gets you to ebizQ's BI in Action podcast page, where you can hear the podcast!

And don't miss next week's second installment in this series, which will include representatives from SAS, Business Objects, HP, Oracle, and LogiXML.

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As you know, I am very interested in Web 2.0 technologies and am watching closely the ideas being batted around by the leaders and visionaries in this space.

To that end, I'd like to strongly recommend the podcast I heard today on PodLeaders, featuring Neville Hobson. It discusses all of the social media and collaboration tools that Neville has been working with, including blogs and podcasts, but also that exciting medium of Second Life that I always get so excited about!

One thing that is fascinating about what Neville has said in his blog recently is in relation to the social media response to the Virginia Tech shootings yesterday. He said that in many ways, facebook and other technologies could have been potentially more responsive and provided more information for students whose lives were at stake that the traditional communication methods utilized by university personnel who are tasked with keeping the students safe.

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I recorded a very compelling BPM podcast last week, starring such ebizQ associates as Sandy Kemsley, James Taylor, Michael Dortch, Keith Harrison-Broninski, Kiran Garimella, and David Kelly.

With our wide range of BPM philosophies represented on the site, we found lots of middleground, as well as lots to discuss further. Check out the lead item on BPM in Action to get the file.

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On January 31, I wrote that Adobe Systems had written something like a $7 million dollar check to acquire a privately held company, Antepo. Antepo's only product was a secure enterprise instant messaging tool. Adobe wrote no press release, and visiting the Antepo site only brings you to a terse Adobe annoucement page.

But this is big news and that it indicates that Instant Messaging is being brought into the enterprise in a big way. This isn't your grandfather's Lotus Notes Messaging, it's not your father's AOL Instant Messenger, it's not your daughter's Gmail Chat, but it is something that the enterprise is going to be implementing on a big scale in the next year or two.

To that end, I asked Maxime Seguineau, Antepo's founder and former CEO, to join a podcast with Andre Yee, ebizQ's Security Insider blogger, who has written extensively about the future of secure enterprise IM, and Dana Gardner, principle analyst at Interarbor Solutions and occassional ebizQ contributor.

Maxime shared the interesting conception of "circles of trust" for instant messaging, meaning that IM is inherently more secure because people intrinsically only share IM addresses with trusted associates. Also interesting was Andre Yee's coined terms of "SPIM," which is Instant Messaging Spam, something we all hope never reaches fruition.

Click here to listen or download. And please share your commments on this very relevant, very "2.0" issue.

[adobe]
[antepo]
[instant+messaging]

Download This (right click, save as)

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I recently interviewed Charlie Andrews, of IBM's System Storage, regarding Big Blue's big plans for storage, in like of last week's acquisition of Softek. Download here and enjoy!

Download file

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In Light of IBM's Softek Acquisition on January 29th, I just recorded a podcast with Charlie Andrews, director of product marketing for IBM