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Web services will drive Tibco's new strategy

To satisfy customer demand, Tibco is venturing into the Web services management space, and is already helping a German railway operator build a Web service to make its railway cars run more efficiently during the 2006 World Cup soccer tournament. The451 believes Tibco can keep up with larger players like IBM and WebMethods, but could have trouble maintaining focus on its core strengths.

Enterprise application integration (EAI) specialist Tibco has placed business activity monitoring (BAM) and analytics at the heart of its research and development strategy for 2003. The company is seeking to move the integration sale increasingly away from a straight technology proposition and toward a more solution-focused and business-oriented transaction.

With at least part of its BAM story now complete following its acquisition of Praja last September, Tibco will add further functionality – through organic development, partnerships and tactical acquisitions – that it says will provide business managers with more intelligent insight into their integrated networks. "We'll add the 'do' to the 'view,'" says Aditya Shivram, Tibco's director of marketing for the EMEA region.

Context: While Tibco turned in solid results for its last financial year, considering the economy (fiscal 2002 revenues were more or less flat sequentially at $273 million), and integration still remains a priority area for IT departments, the depressed economic climate means this requirement doesn't always translate into available dollars for integration projects. Tibco reacted to this last year with the launch of BusinessWorks, a pared-down version of its ActiveEnterprise suite focused on rapid deployment, with features such as out-of-the-box connectivity. The offering is targeted at smaller organizations and – crucially – smaller, project-based integration deployments. The company claims a degree of success for BusinessWorks, with about 30 deployments so far.

However, it has become clear in recent months that EAI vendors also need to embrace the wider organization with more business- and solution-oriented propositions that extend the requirement for integration beyond a pure technology-oriented argument. From Tibco's perspective, this is taking the company into the broader market of process management, business activity monitoring and even Web services management. Potential customers are far more likely to buy into a solution that provides them with intelligence and visibility into previously hidden relationships – both within and between organizations – than one that merely plugs together disparate applications.

Indeed, Tibco says that in some industries – especially retail and consumer packaged goods – integration networks between buyers, suppliers and other partners are increasingly efficient at a process level, with suppliers able to react quickly to changes in demand. But what has been lacking in these supply chain networks is intelligence, says Tibco. A company may know exactly how much inventory its suppliers have at a specific point in time, but may not know why inventory levels are too high or too low.

Technology: BAM software – such as that Tibco acquired from Praja last year – provides real-time visibility across an enterprise and access to the information that helps managers make the right decisions. BAM tools sort and interpret in real time data collected from CRM, supply chain management (SCM) and ERP systems.

Unlike traditional data warehousing, which focuses on data normalization, BAM is focused on providing a rapid understanding of activity and end-user functionality by monitoring key performance indicators. It's a natural complement to message-based integration software, such as Tibco's Active Portal. BAM offerings use information from a variety of sources, and the emergence of Web services will help to serve as the integration infrastructure for collecting and assimilating that data.

For example, manufacturers can use BAM applications to adjust forecast levels and production costs. Ideally, BAM can provide time-sensitive notification of problems and enable a business to determine the nature of a problem, the key drivers behind it and, consequently, the best action to take.

Strategy: Tibco says its BAM capabilities – which it has branded Tibco BusinessFactor, as part of the Active Enterprise suite – play an important role in defining business metrics, which are then executed using its business process automation and management platform, especially among Active Portal users. However, the company also plans to add further analytical capabilities over the coming year. It expects to do this through a variety of alliances and strategic partnerships, as well as through organic development and acquisitions. The company is currently sitting on roughly $700 million in cash, which it is eager to spend on the right acquisition.

Although it plans to continue partnering with analytics vendors like Informatica for functions such as data extraction, transformation and loading (ETL), which feeds the BAM tool with data, Tibco will focus its own development and acquisition efforts on business process management.

Interestingly, Tibco sees itself playing in the Web services space – not just from an integration perspective, but also from an orchestration and management standpoint. Signs are growing that organizations are taking Web services seriously, says Tibco, and the company believes that emerging Web services management firms are only addressing the semantic layer, and doing relatively little in terms of orchestrating and executing Web services. This is where Tibco sees an opportunity to build functions that allow organizations to configure their own processes around Web services, which can then be monitored in a way that can intelligently trigger actions based on predefined rules. This is where the company will aim its research and development dollars through 2003.

Tibco is already working with German railway operator Deutsche Bahn to build a system capable of handling the higher passenger levels expected when the country hosts the 2006 World Cup soccer tournament. The system will use Web services to link together information from all areas of the infrastructure, so that in the event of any problems delay information can be automatically sent to stations, and maintenance engineers can be notified.

Competition: Tibco names IBM and WebMethods as its two largest competitors, although it says Microsoft's BizTalk server is starting to make an impact, at least from a price perspective. Meanwhile, it believes the gap will continue to widen between itself and the likes of Vitria and SeeBeyond. It says BEA Systems isn't yet cutting the mustard from an integration perspective, although it fully expects the rumors that have been circulating for months about it buying an integration player to culminate in something substantive sooner or later.

Tibco can expect to increasingly find itself playing against the likes of Actional and CapeClear as it targets the Web services opportunity, and the BAM sector is also attracting plenty of interest lately. In addition to Tibco's own move for Praja, IBM bought business process integration and real-time monitoring specialist Holosofx last September, and also has plenty of its own capabilities via its MQSeries messaging product and the fruits of its CrossWorlds acquisition.

Meanwhile, Vitria has its Business Cockpit BAM tool, allowing users to manage business processes in real time and without programmer intervention, and Mercury Interactive is developing a BAM toolkit with consulting group Accenture. Although WebMethods does have a partnership with Informatica to provide real-time analytical capabilities, Tibco says that its own BAM capabilities have been an effective differentiator against the company.

The451 assessment: Tibco is a major player in the EAI market, with over 1,900 customers, and BAM provides it with the ability to extend its ROI message to new areas. By expanding its capabilities further into the realms of enterprise analytics and Web services management, Tibco is demonstrating that it can at least keep up with IBM. Organizations are indeed looking for more business-oriented solutions, and its cash pile should ensure that Tibco can continue to play at the leading edge. Still, there's no lack of integration problems to solve at large enterprises, but dollars to spend on EAI solutions are still at a premium. Perhaps the company's greatest challenge will be one of maintaining focus on its core strengths as its portfolio expands.

The451 is an analyst firm that provides timely, detailed and independent analysis of news in technology, communications and media. To evaluate the service, click here.

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