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Like rivals, SeeBeyond looks to benefit from vertical focus

SeeBeyond's latest prepackaged software releases include capabilities to streamline supply chain operations. But SeeBeyond doesn't have the vertical integration space to itself, and the451 believes IBM, webMethods and Tibco will provide strong competition.

SeeBeyond this week unveiled its latest prepackaged integration software sets aimed at specific vertical industries. The first releases are based on the SeeBeyond Business Integration Suite and include pre-built service components for healthcare and consumer packaged goods. SeeBeyond claims the releases represent a step up from existing 'starter sets' from competitors like Vitria and Tibco by solving specific vertical market challenges while laying the foundation for an enterprise integration infrastructure.



Products: The new SeeBeyond HIPAA Solution Set for Payers is an integration software package designed to enable HIPAA (Health Insurance Portability and Accountability Act) transaction compliance. Management claims the software can be up and running within 12 weeks.

The software is designed to adhere to new US standards for the electronic exchange of healthcare data by October 2003. The HIPAA Solution Set consists of pre-configured software, a tailored toolkit, a best practices foundation architecture and pre-packaged HIPAA transactions. There's also support for AS2 and a draft specification enabling vendor applications to exchange secure EDI or XML data over the Internet.

The SeeBeyond UCCnet Solution Set for Consumer Packaged Goods is designed to enable consumer packaged goods manufacturers and retailers to operate across the supply chain with synchronized information. Wal-Mart, America's leading retailer, recently chose to work through UCCnet – making it increasingly likely that other retailers and suppliers will have to follow suit. SeeBeyond said packaged goods firm Dial Corp is streamlining supply chain operations using SeeBeyond UCCnet.

SeeBeyond also plans to release software sets expressly developed for US government agencies, including the Real-Time Information Network for Government (RING), which is aligned with the evolving criteria outlined by the US Office of Management and Budget. An additional solution set will be aligned with the Department of Homeland Security's anticipated National Enterprise Architecture, once it is made available.

SeeBeyond's underlying Business Integration Suite includes e*Gate, which supplies connections to databases; e*Index, a global identifier application for cross-indexing customers with the information known about them when they visit a site; e*Xchange, for establishing partner profiles, audit trails and security for transactions between partners; and e*Insight, a business analysis tool that allows users to set up rules for how services may be invoked or used. The latest rev of the Integration Suite, released last week, adds support for enhanced event scheduling, exception handling and performance monitoring capabilities.

Strategy: All the integration software vendors have been introducing more business-centric, value-added applications – such as workflow and business process management products, as well as automatic industry-specific business processes – to provide customers with a quick return on investment. The second trend among integration vendors has been to promote adoption of just-in-time software, or coordination of deliveries to maximize return and reduce inventory. Just-in-time software promises to increase profitability and customer satisfaction by increasing efficiency and reducing friction. SeeBeyond senior VP of marketing and business development Kate Mitchell claims SeeBeyond's latest offerings provide up to 40% time savings.

SeeBeyond's marketing and technology strategy emphasizes its role in helping customers win value-chain competition. In the real-time enterprise, explains Mitchell, management wants a comprehensive view of the ebb and flow of this information, and the power to turn the business quickly and offer new products and services as customers' needs change.

Nonetheless, we continue to believe that all but the largest companies lack complex industry domain expertise – with solution sets consisting of little more than transaction and translation tools. However, we are prepared to concede that SeeBeyond has gained valuable experience in these vertical markets and has a more stable and tightly integrated platform than IBM, which is still digesting several disparate product sets and recent acquisitions.

Competition: SeeBeyond's strategy is to emphasize how its just-in-time software can provide concrete savings and a competitive edge. From a technology perspective, its single-code product, scalable architecture and tight integration are compelling when compared with Tibco, Vitria and webMethods – but we feel its competition continues to obscure the horizon with recent acquisitions. WebMethods, with its Process Integrator BPM engine, is beginning to become more visible in the market. Tibco's BusinessWorks appears to be having some success, and IBM's acquisitions of CrossWorlds, Metamerge and Holosofx, put further pressure on SeeBeyond.

In the meantime, SeeBeyond's recent strategy to increase R&D is a tacit acceptance that it's under intense pressure from its software integration competitors. On the other hand, SeeBeyond continues to make inroads in new sectors like consumer packaged goods and retail, it has embedded its software in Retek and a couple of other major retail packages, and it's leveraging those verticals to feed into industry crossover solution sets. We are now at a point in the game where large companies are starting to trade across the industry boundaries – witness Wal-Mart's decision to adopt UCCnet – and SeeBeyond is in a good position to benefit in the longer term.

The451 assessment: Several vertical sectors are expected to drive the application integration business over the next couple of years, including government, healthcare, financials and telecommunications. At present, establishing any clear winners remains impossible, and vendors continue to add additional software capabilities, including business activity monitoring, to their software stacks. The451 expects SeeBeyond to be one of the main competitors in this marketplace, but we remain concerned that unless there is marked improvement in IT budgets, SeeBeyond will suffer from restricted R&D in comparison with IBM, webMethods and Tibco – with potential future competitive consequences.

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