From A to B2B
1st June 2000
By CBR Staff Writer
What is the reality behind vendors claims to be ebusiness integrators? Piers Ford reports on the rush to market.

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The enterprise application integration (EAI) market is moving into new territory. Initially the preserve of organisations looking to integrate applications with the back office, EAI companies are striking out for new ecommerce frontiers in the supply chain and beyond. Nimbler vendors are already shrugging off the EAI label and establishing a business-to-business (B2B) presence.
As a spectator sport, it offers rich entertainment.

But for the customer trying to differentiate between a genuine EAI pedigree and over-stretched marketing hyperbole, it is a frustrating scenario of claim and counter-claim.

Integration software for ebusiness barely existed at the start of 1999, but is now a rapidly expanding market. The main driver for this is a shift in focus from extending the life of corporate IT investments to using B2B integration to improve business partnerships across the supply chain. But this shift makes it increasingly difficult to pin down where real demand lies and who is genuinely well placed to meet it.

"In some respects the evolution of the market is a natural transition because almost every EAI project involves some level of B2B integration now," says Kimberly Knickle, senior analyst for ebusiness infrastructure at AMR Research. "The main problem is that vendors misrepresent their products and the level of their own experience. They imply it will be an easy project but then the customer becomes a test case."

To an extent, by repackaging marketing literature to imply products are purpose-built Web/legacy integration tools, some EAI vendors are joining a conspiracy of over-simplification. Transportation tools might legitimately be moving towards commodity status, but layers higher up the EAI stack remain complex and customisable for each individual organisation that implements them.

AMR defines the cross-enterprise mutation of the market as business community integration (BCI) but warns that it is not a simple matter of EAI evolution. If EAI is complex, BCI is more so, involving more applications, more technology, more processes, more people, more support, more decision-makers and – almost certainly – more changes and additions. Partner relationships and supply chains evolve, and mergers and acquisitions are a fact of corporate life.
"There's a real sense in which the market has moved to an ecommerce or B2B focus," says John Spiers, an international director at Forte, which was purchased by Sun Microsystems in August 1999.
"A lot of vendors that sell infrastructure products have relabelled them B2B solutions and are brazenly riding on the tide of the latest buzzword. The B2B link is the tip of the iceberg. It's interesting and it's visible. But just because it's the easiest thing to talk about, it doesn't necessarily mean it's the most important."
Spiers says the most substantial element of a project is the 90% that lies below the water line and the software that underpins the entire business strategy. And creating an infrastructure that provides tidier plumbing does not necessarily have a beneficial impact on business processes. The business is trying to optimise its processes end-to-end, not just the bits that interact with applications.

Faultless integration

According to Spiers, the principles of EAI are unchanged when it comes to B2B. It is still a matter of integrating applications which have been built without prior knowledge of each other. If you are integrating a SAP module with a Siebel application, it does not matter if they reside on separate servers within the same company or in different companies. The main difference between EAI and B2B is the business imperative: if your business is built on the effectiveness of your supply chain interaction, you cannot afford the failure of a single link.

Forte's toolkit approach to EAI is shared by the majority of its competitors. CrossWorlds, however, has an application-centric strategy which has kept it focused on its core market of enterprise resource planning projects. It remains reticent on B2B evolution.

As EAI vendors move into BCI, they could be caught out by the speed trap. While the hard core of EAI customers are steeped in long project lifecycles, their online spin-offs may need solutions in weeks rather than years.

But Forte's Spiers warns against the perception that faster projects mean simpler solutions. "These projects still demand vendor experience of real-world implementations. Most of them involve the integration of custom-built solutions and legacy code and are significantly harder work for any vendor genuinely looking at inter- and intra-enterprise integration."

Spiers estimates that the ratio of expenditure on EAI projects is still 75% integration and consultancy services to 25% product. Ironically, his opposite number at Active Software, itself originally founded by ex-Sun architects, suggests that as EAI becomes a B2B-driven proposition, that ratio will be almost exactly reversed. Active has just been acquired by WebMethods.

"The issues of B2B are very similar to EAI," said Active CEO Jim Green before the acquisition. "But they also include security, scalability, rapid speed and the need for tools that define business processes visually." Green now becomes WebMethods' chief technology officer.

According to Green, Active's policy of providing adaptors for its application partners such as Siebel, Clarify, Peoplesoft and SAP, will help it to take advantage of the market's rapid evolution to B2B. This is technology that WebMethods has now taken on board with Active. To date it has focused on around 200 blue chip customers. Active claims that this is more than Vitria, Crossworlds and Constellar combined.

But while cross-industry vendors consolidate their claim to the B2B sector, some vertical specialists maintain that they are the ones most likely to succeed in the e-commerce world. Newcomers evolve too quickly for analysts' market graphics to keep up. Netik.com, for example, was founded in 1997 and is now implementing EAI projects for organisations like Standard Bank, Wells Fargo and Swiss Bank.

Netik.com focuses exclusively on the financial sector, straddling EAI and BCI with the support of venture capitalists – most recently, $15 million from Warburg Pincus and up to $100 million per strategic acquisition it might want to make.
Netik's architecture, xNetik, uses a meta-database engine and Microsoft tools and components to provide financial organisations with a single point of access, control and entry for all information – across the enterprise and the Web. CEO John Wise says projects falter because EAI products are sold without a clear objective of what they should do. Customers like Standard Bank want to integrate their online business across legacy systems without having to rewrite large volumes of code – a criticism much levelled at EAI projects since the birth of the market.

"We believe the only reason for our customers to commit to EAI is to achieve a significant return on investment through delivering a single point of access, so the transaction is entered once only," says Wise. "That not only reduces the number of transactions across the systems, but means that more transactions can be handled by less people."

As more financial institutions consolidate around Internet-based architectures, adds Wise, their EAI solutions will require true integration techniques and translate high volumes of transaction data at the highest possible speeds. Wise is sceptical that any
vendor offering a solution based on technology more than three years old can actually deliver this in a true B2B environment.

"We are being linked with a new wave of customers who want to do things extremely quickly," he says. "And we're winning business against the bigger consultancy houses because we can meet those customers' needs in weeks rather than years. Anyone who says they do integration at API [application programming interface] or object level is talking about programming and that takes time, even if it's in basic scripting language."

Another vendor to focus exclusively on the financial sector is SunGard Business Integration (formerly Mint Software Technologies). Following its acquisition in July 1999, it has now changed its name to tie in with the market's new emphasis on B2B.

President and CEO Hagay Shefi says CIOs are increasingly concerned about the flood of marketing material from EAI vendors which promises the world overnight. Like Spiers, he believes too many of them are trying to be buzzword-compliant rather than looking at business problems and applying their technology to them.

"A vendor often sells a 'miracle solution' which actually involves putting in a lot of programs to hard-code interfaces between applications," he says. "Then we have to break the news to the CIO that this isn't true EAI and we're going to have to start from the ground up. On the one hand, we suffer from over-selling. On the other, we do gain advantages through solving problems created by other vendors."

If the EAI market is still relatively immature, its transition into the B2B environment is greener still. The one-upmanship that makes it so difficult to ascertain consistent product definitions, and the relative scarcity of proven B2B project implementations, will continue to frustrate buyers for some time yet.