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Why dull plumbing software is becoming sexy

The middleware market is expected to surge in the next few years. And the hottest part of the market is for so-called businessware.

Just about every forecast points to the middleware market experiencing rapid growth over the next few years.

IDC, for example, projects the segment to experience a 12.1% compound annual growth rate (CAGR) over the next four years, going from $3.4 billion last year to $6.1 billion by 2005.

Gartner Group forecasts provide a slightly different slant, suggesting that segment growth is faster but the overall market is smaller -- probably because it only counts software sales and not revenue from associated services, maintenance fees or support. The research firm projects middleware license revenue will hit $5 billion by 2005, a CAGR of 33%. To put these numbers in perspective, IDC projects packaged analytical applications, a more mature and therefore potentially larger market, to reach a fraction less in size -- $6 billion -- over the same period.

Irrespective of the disagreement on total market size, there is a more interesting thread running through the forecasts. Both Gartner and IDC point to one part of the middleware market as the largest and fastest growing -- although the research firms use different terminology to label the sub-sector.

"By 2005, the businessware management systems market will account for two-thirds of the total market," according to IDC. Gartner echoes this sentiment, stating that "integration brokers constitute the largest and fastest-growing segment of the middleware market at $1.4 billion last year. This segment is slightly larger than the transaction processing monitor segment ($1.3 billion) and almost twice the size of the application server segment ($765 million) and growing faster than both."

So exactly what is this sub-sector, and why is it one of the few segments to blossom in the current IT spending crunch?

Businessware, according to IDC, is the middleware "that delivers the runtime and infrastructure for real-time application integration, event-driven processing and business process automation; it [is] layered on top of the capabilities of message-oriented middleware and publish-and-subscribe communications." An integration broker, according to Gartner, is a "set of services for transformation and intelligent routing." To put it another way, they are effectively one and the same, although broker technology can be slightly less sophisticated because it often works at a higher level of abstraction and therefore is more concerned with point-to-point rather than process-level integration.

Nonetheless, there are several reasons for a surge in spending on this type of technology. First up is the return-on-investment rule. Often used as a pitch by any company to sell more software in recessionary times, middleware can actually deliver value out of exiting IT investments through providing the often-needed real-time bi-directional integration layer. There's a clear corporate desire among most companies to move toward a single integration platform, combining application-to-application integration, business-to-business integration and business process management, and middleware provides the glue to tie disparate applications together at a deep level. E-business initiatives, in particular, will drive the need for middleware because they rest on the ability to do just that.

Although the myths around e-business have now been debunked, leaving those that bought into the vision cautiously eyeing further e-business-related spending, legacy integration is often singled out as the single biggest factor in making existing investments pay for themselves. In order for business-to-business to achieve its goal of end-to-end integration with suppliers and partners, all participants have to expose some of the data in their enterprise resource planning systems. This is a huge challenge, since data can be defined and processed in very different ways. But middleware packages, which combine broking, transaction process management, messaging, adapters and some development tools are key to this objective.

The emergence of Web services, a method of discovering software components, connecting to them and having them execute over the Web, is also swelling the demand for middleware, which contains many of the protocols key to Web services. XML is a classic case in point: it defines a message in a two-way process. It requests a Web service from an application and passes back the results of executing that Web service to the requester's application or to a further Web service. This is also of course a natural function for message-oriented middleware.

The fourth driver behind the surge in the middleware market is, however, open to debate. Both IDC and Ovum, for example, believe that wireless application development will spur demand for integration technologies. Says Ovum: "In 2006, 39.4 million subscribers will create a worldwide market for wireless enterprise technologies worth over $28.7 billion. This market opportunity is comprised of user spend on network connections, subscriptions and traffic, which will total over $18.6 billion; and user spend on application software, middleware and consulting and integration services, which will total just over $10 billion."

IDC does not quantify the market opportunity, but its opinions are clear from the following, taken from a recent research report: "Significant opportunity lie ahead for middleware and businessware vendors in the adoption and adaptation of wireless technologies. This opportunity will most likely be a good source of revenue generation later in the forecast period [closer to 2005], as businesses and organizations realize that wireless technologies must be supported by scalable, reliable and flexible information."

But how can this be true? Wireless market size numbers are a fraction of those of yesteryear due to technically immature hardware platforms, issues with telecom infrastructure and a general unwillingness to buy bleeding-edge, unproven technologies in economically challenging times -- to name but a few reasons.

Whatever the driving forcing behind the surge in demand for middleware, there's one clear trend emerging. Industry consolidation will continue apace as point-to-point vendor technology compatibility becomes increasingly questionable and the segment as a whole moves to service the demand for an integrated suite of integration technologies. Legacyware, data access middleware, remote procedure call middleware, transaction server middleware and object middleware are all likely to experience revenue decline in the next couple of years because of bundling and consolidation. But although the landscape will change, the market will blossom.


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