Benoit Lheureux

In my recent post, Liaison and ADX Fuel The B2B Frenzy, I addressed a wide range of vendor landscape changes in B2B integration market segment. Here’s an update on related research:

• Tibco’s acquisition of Foresight on Friday — my colleagues and I are still working on that
• The GXS acquisition of Inovis — we just published a more detailed analysis (login req’d)
• SPS Commerce’ December IPO filing with the SEC — detailed analysis on that available soon
• Liaison acquired ADX in January — I recently published some analysis on that (public)
• Oracle’s alliance with E2open on Business Process Networks — research here (login req’d)

What’s happening? Well, as companies strive for operational efficiency and new revenue opportunities in a challenging economy, B2B continues to florish as a key IT initiative. And, larger B2B providers are snapping up bargains while the others continue to mature and expand their own operations in anticipation (and hope) for economic recovery. And finally, mega-application vendor Oracle is dancing with E2open and SAP continues to raise its stakes with Crossgate — for years we’ve wondered how long they would continue to treat B2B as a second-class IT citizen — its not likley this status-quo can last much longer.

Net-Net: The B2B vendor landscape has never been so volitale — or interesting. Expect it to remain so through 2010 and into 2011

- bjl

Yesterday Liaison — a vendor I recently evaluated for our recent update to the Magic Quadrant for Integration Service Providers (login required) announced that it is acquiring ADX — another B2B vendor I’ve followed for years. While this particular commercial transaction was not by itself a huge deal (it does incrementally strengthen and grows Liaison’s market position while allaying concerns about ADX’s long-term viability — look for a bit more analysis on that in a day or so), their action adds to and underscores the highly active state of the B2B market segment including a series of activities including:

• Tibco’s acquisition of Foresight on Friday (my colleagues and I are working on analysis)
• The GXS acquisition of Inovis in December — see my post and published research on that
• SPS Commerce’ December IPO filing with the SEC — analysis on that too available soon
• Oracle’s alliance with E2open on Business Process Networks in November (research here)

And so on, including other such moves in 2009 such as Elemica’s acquisition of Rubber Networks, Cast Iron’s alliance with Cloud providers such as Amazon and Google, and IBM’s alliance with Hubspan to offer business process networks for WebSphere.  As I recently noted this has recently attracted substantial investor interest, but as Jijesh Devan asked in one of his comments on that post: why “this renewed interest” in B2B? I attribute this (at least) to the following factors:

• Opportunistic M&A — in a perceived ‘bottom’ (let’s hope) market movers acquire, merge, etc
• B2B maturity – by customer, pricing, or reliability, integration solutions are getting better
• OPEX vs CAPX — when capital is tight, integration services look attractive relative to software
• Cloud proliferation — traditional ecommerce still rules, but Cloud computing needs integration

Many companies still (rightfully) run their own B2B hubs but it’s clear from client interest and the rapid growing managed services business that B2B integration outsourcing in particular is hitting its prime. I’m having discussions with Cloud computing / SaaS providers about how to address on-premise integration requirements. I’m also speaking to investors and CEO’s of B2B vendors citing “upcoming announcements” — war chests are being prepared … battle lines are being drawn … no doubt the B2B market in 2010 is gonna be fun.

Today I had research inquiries on the B2B market segment (e.g., about recent B2B events including B2B mergers and IPO filings) with three Gartner clients representing VC’s and equities. I’ve remained keen on this topic even during its darkest years in the last decade, but who dared figure that in 2010 EDI (no, really) would still be so interesting?

There’s an App for that — your iPhone is your Hotel Room Key.

I’m sure to be of the minority opinion not overwhelmingly impressed with the “convenience” aspect of using my iPhone as a hotel room key [and boarding pass, et al]. I mean, after all, it really *is* such a bother to keep track — and learn to use — those horrid hotel key-cards you know. But regardless, I’ll likely use the iPhone App like others for this purpose at some point. But let me convey a personal story to underscore why the real story here is NOT about the underlying technology but what my colleague Brian Prentice says is “focus should be on the underlying process” — a theme I’ve written about before.

Over ten years ago I worked for NCR and did a lot of business in New Jersey (we were owned by AT&T at the time). Things were such logistically that I used to fly late into NJ and stay at the Newark Airport Marriott prior to my travel throughout the state. Some of you may know of this hotel, and seasoned travelers may rightfully ask “why” I bothered to stay there, since its rather utilitarian and not in a particularly lovely location.

One thing that I liked about the hotel at the time was a feature that I’ve yet to see repeated by any other hotel since. As you approached the entrance to the hotel a desk clerk would be standing out front, next to a rack of small folders. As you walked up he/she would greet you a “Hello” and ask “my I have your name, Sir?”. After giving your name and showing an ID, the clerk would reach over, flip through the folders, and draw the one prepared in advance with my name – and an enclosed key – and hand it to me, saying “Welcome, Mr. Lheureux, enjoy your stay”. At which point I’d waltz directly into the bar, order a drink and my dinner. Nice.

Why, for the life of me, has no other hotel I’ve ever been to since also do this???  I couldn’t explain that if my life depended on it. But more importantly, perhaps, yes, if because someone is so utterly smitten by the beauty of the iPhone [hammer] and looking for an “App for that” [nail] and they come up with the brilliant “new” idea of speeding up my hotel room check-in then of course that’s all fine and good. But PLEASE don’t tell me this is new. An otherwise unremarkable hotel stuck in the middle of the airport traffic loop at Newark Airport differentiated itself over ten years ago by smoothing my hotel check-in – SHOCK – w/o using an iPhone!

It’s the process that matters

- bjl

This week in Las Vegas at Gartner’s SOA / ADI Event I hosted a Analyst / User Roundtable on the topic of Cloud computing / SaaS integration.

One attendee which has already (impressively) leveraged the services of a dozen SaaS vendors claims that four of the twelve  providers have changed API’s without notifcation, impacting production operations. A few other members of the group cited some experience with what I’ll coin here (strictly for the entertainment value, of course) “API slamming”.

By any interpretation API slamming is not good. While I understand how this can happen at a technical level, in the SaaS user’s defense I don’t understand why any SaaS provider would change its runtime API’s without notifying users (er, in advance, please). In the SaaS provider’s defense, I can imagine that implementing a proactive notifcation mechanism quickly becomes non-trivial, e.g., just maintaining user contact information is problematic

When I said that a leading SaaS vendor claimed to take a different approach, since they told me it “never” changed its API’s and instead just revisions them and keeps the old — the skepticism around the table was palatable.

This group of users considers “API Slamming” to be a Cloud computing / SaaS integration “risk and concern”.

So what do you think?

Is it possible that I just happened to run across a “tough crowd” and an associated exceptional but perhaps not so representative data point on API slamming? Or is it possible that I’ve just uncovered an ugly little secret (and risk) of Cloud computing / SaaS integration?

This morning GXS and Inovis announced that they will merge.

My colleagues and I will respond to our clients with our detailed analysis of this event soon (and in 5 minutes I’m rushing off to breakfast with some of the GXS and Inovis folks to learn more), but after covering the B2B integration market segment for ten years I can say from the top of my head that this merger is, stated simply, a game-changer.

Between this event, and SPS Commerce’ recent filing of an IPO, the B2B market segment has changed, permanently. The other vendors will need to re-assess their role in this evolving IT landscape has just begun. IT users of B2B services will need to re-assess their perceptions of which vendors will be most likely to succeed.

After years of decline and painful, systemic redefining and rebuilding of fundamental business models around delivering B2B services following the dot com market collapse and associated impact on the B2B market overall, these events mark the beginning of a major shift towards vendor landscape consolidation and fight to the finish.

There’s more to come — I’ll be here monitoring and publishing on these events, and helping our clients sort through the confusion.

Cheers,

- bjl

DECEMBER 16TH UPDATE: My formal position on the GXS / Inovis merger is now available

Something cool happened today: I gave IT advice to my 750th named Gartner client.

To be more specific, for over ten years I have kept track of all the companies that I have given advice to. I track each company and the people within that I speak to within using a proprietary XML-based personal knowledge management (PKM) application I wrote in Visual Basic (ick – long story). I manage the list of Gartner client companies in one of my many (as of today precisely 4070) knowledge maps — here’s a partial screen shot of that (with links to each individual Gartner client company MAP mostly hidden by my system clock to honor client confidentiality):

The total number of companies I have advised is much higher if you include companies (some Gartner clients, some not) that I meet at our conferences world-wide, which I don’t track. Gartner publicly cites a customer base of over 10,000 companies world-wide so I estimate that I’ve given IT advice to somewhere between 7.5% and 10% of all named Gartner clients.

Here are some additional random tid-bits about the clients I’ve served over the years:

• I’ve served clients with company names that begin with every letter of the alphabet, including three X’s and Z’s
• You collectively do business across dozens of countries on every continent [I maintain a MAP for every country so I can track a list of clients by country]
• I usually give advice to several people in your company — its actually kind of rare to have a research inquiry with only one person
• Over time for the same client company I will often speak with people in different groups, divisions, and even different countries
• You do business across at least 41 different industries [I maintain separate MAPs for each industry]
• For B2B projects you are users of IT solutions from at least 169 of the total number of vendors [656 as of today] that I track [one MAP per vendor]
• The several hundred B2B integration projects you’ve described to me are very roughly evenly divided between small, medium and large B2B projects
• When you have questions I cannot answer I have referred you to one or more colleagues across 175 different IT topic categories [yep, there's a MAP for that]
• When I take a call with you there’s a better than 2/3 chance that I have advised you or someone else in your company before. [Er, no MAP -- just an estimate ]
• When I’m in the office I average 3 to 4 client research inquiries per day; on my busiest days I can serve 8 clients [the rest of the day? meetings, research, email, etc.]
• Given my primary area of research it should not be surprising that the primary topic of discussion with most (at least 90%) of my clients is B2B integration
• I do several hundred research inquires per year, thus I have provided IT advice to clients on several thousand research inquiries over the last ten years

For some of my figures above I say “at least” because I have not always had a MAP (nor always have the time to update every MAP) for all this sort of metadata.

Regardless, from what I *do* track the numbers speak for themselves — the last 10+ years have been a good run. I’ve certainly learned a lot, and I hope my advice to you has been helpful. To my 750 — and counting — client companies and the several thousand people across those companies that I’ve had the opportunity to meet its been my pleasure and priviledge to server you. THANK YOU for trusting me to give you IT advice.

Tomorrow I’ll speak with my 751st client … I very much look forward to that call, and the many others to follow!

- bjl

I mean, if you build it [Cloud API], will they [IT end users] come? And if companies keep building them [Cloud API's], will they [IT end users] keep coming? My colleague, Eric Knipp, is following the rapid adoption of WOA API’s at various companies like Best Buy. Such rapid proliferation of Cloud / SaaS API’s is undeniable — and compelling.

But does that mean the death of Integration, meaning the need for integration skills and technology? In an earlier post this year I compared Cloud computing / SaaS API’s to EDI Implementation Guides — the implication being that while many users will be savvy enough and willing to consume Cloud-based API’s directly, many others will not.

This begs the question: How are such API’s consumed? At one extreme Cloud API users will directly execute API”s in new application logic, e.g., within a mash-up. At another extreme API users will execute API”s in association with an integration project, e.g., linking a Cloud service at the process or data level to an on-premise application. At one extreme IT end-users will consume such API’s directly. At the other, other Cloud service providers, system integrators, resellers, value-added resellers, integration service providers, Cloud service brokerages and other  of various IT service providers of various sorts — which are typically quite IT-savvy — will consumer API’s.

Five years from now who will be the predominant Cloud computing / SaaS API consumers? IT end-users? IT service providers? Even consumers? (think: iPhone Apps) And will those Cloud-based API’s be consumed directly most of the time? If so, does that portend the death of integration technology such as integration as a service? I believe that there will be a significant amount of direct WOA API consumption w/o utilization of integration functionality. But I also believe that there will also still be a significant amount of such API consumption via integration technology one way or another, e.g., to address semantic reconillation. But frankly its anyone’s guess how that works out, proportionately.

That being said, what do YOU believe?

I am a stickler for doing things *in context*. Ask my wife – she’ll be cooking and ask me to fetch the cooking wine and I’ll ask her “why?”. That’s right – asking for context when her stir-fried shrimp are already turning color is simply unnecessary – and annoying.

But when you’re doing business activities like B2B integration, e-commerce or Cloud computing, understanding context is important – lest you get distracted by technology (“Web 2.0 — wow, cool”) and your day-to-day tasks (“please send me that file!”) and you lose sight of the whole point of why you’re doing such things.

Which brings me to my take-away observations from the Gartner BPM Summit here in Orlando that’s just winding down. I gave two presentations on the role of BPM technology in B2B / Ecommerce projects. Here’s a few bits of wisdom from conversations with our attendees:

Consume B2B in the form of processes!

Whatever you think you’re doing – “B2B integration”, “e-commerce”, “Cloud computing” – remember that you’re implementing PROCESS. Thus, if you’re implementing the procure-to-pay process for a supply chain look for solutions that are process-aware, e.g., pre-configured with the right B2B documents, maps for translation, process visibility rules and dashboards. One way of consuming B2B processes directly is in the form of “business process networks” (BPNs) – in his own blog David McCoy briefly mentions BPNs and here’s our formal definition of BPN’s for Gartner clients (login required). Though not available for all projects, BPNs are a direct way to implement B2B processes, increasingly available for e-procurement, financial services, logistics, etc.

Selectively model B2B processes!

Janelle Hill and I had a great conversation with some nice folks of an international B2B / Ecommerce services provider that attended my session and wanted to explore options for their increasing need of BPMS technology (including process modeling and a rules engine) specifically so they could deploy configurable ecommerce projects with scale for their customers. We agreed that for complex, high-value and fast-changing processes that can be leveraged across multiple B2B communities, BPMS technology would be a great addition. But that for more static, less-complex processes that traditional application development is still fine. Its important to apply BPMS technology judiciously — I’ve blogged before on the issue of when — and when not — to use BPMS technology.

Instrument the process!

Once you’ve automated a B2B process across your community don’t miss out on the opportunity to “mine” that flow of messages and transactions to expose key performance indicators and drive process improvement. I had great discussions with a few clients about its benefits – such as sharing multienterprise process insight amongst your B2B peers – and challenges – such as plugging a potentially CPU-intensive BPM rules engine on top of your high-throughput B2B traffic! But regardless, nearly everyone agrees that one way or another IT users are long overdue to benefit from the decade-long oft-failed promised of “mining” B2B / ecommerce (and now Cloud) traffic! I have recently spoken to a few reference customers that specifically cited the valuable impact that process visibility has on their B2B projects.

I welcome your thoughts on all this!

As I post this I’m preparing to head back from the BPM Summit. The event has come to a close, but its impact will endure. Look to me for more on the role of BPM technology and discipline in the domain of B2B, e-commerce and Cloud computing!

Last winter for the first-time in my life I created a compost heap. My first attempt wasn’t as large as this steaming beauty down under…

… but indeed the fires of bacteria were raging such that the first time I thrust my hand deep into the core it nearly burned. (Yeah, my wife thought that was a dumb thing to do too – but you know, I simply didn’t count on my first bacteria party being such a big hit!)

So last week I spent some time on the phone with folks at Google (I know, harsh transition – indulge me) getting an update on the Google App Engine (GAE) and in particular adoption patterns for its new Secure Data Connector (SDC), which I recently referenced on a blog post regarding Cloud and EDI – The Ultimate Mashup. Precious few public details so far from Google on enterprise adoption of GAE and SDC, but they claim there’s viable quiet early adopters and I’m willing to give the folks at Google the benefit of doubt and a bit more time to make good on future public examples.

Also seeking to more easily link Cloud-based services to on-premise enterprise Apps, Amazon recently announced the Amazon Virtual Private Cloud to help drive adoption of Amazon Elastic Compute Cloud (EC2). It has partnered with Cast Iron to provide for Cloud-enabling integration as a service (IaaS) capabilities to help accelerate adoption of Amazon EC2. Here again adoption of IaaS to solve Cloud computing / SaaS integration problems is still light, but given the potential for Amazon to get real traction on EC2 I’m willing to give this new market time to mature.

So back to our steaming compost heap … of traditional B2B.  EDI tenaciously persists; as well do the providers of supply chain-enabling IaaS that carry huge chunks of EDI-based B2B traffic such as GXS, EasyLink, Inovis, and Sterling Commerce. While Cloud computing providers steal IT headlines and forge relationships with Boomi, Cast Iron, Informatica, Pervasive and other emerging purveyors of Cloud-enabling IaaS, the large providers of supply chain-enabling IaaS are quietly modernizing their networks and laying business intelligence across billions of transactions. (Follow the money)

Cloud-enabling IaaS. Supply chain-enabling IaaS. A delicate new sprout. The compost heap that nurtures its growth. Cloud. EDI. The point I made in my Cloud and EDI – The Ultimate Mashup post was that the Cloud and EDI world will soon be IT’s biggest Mashup ever. Expect some cross-pollination. But who ultimately will be the IaaS winners? Native members of the new Cloud eco-system? Incumbent carriers of most supply chain traffic today? Or yet others, jostling now to govern Cloud interactions? In the end, will the steaming compost heap of B2B nurture the Cloud?