June 28th update — updated below with reference to 1st of two CSB case studies, just published — bjl

————————————————— Original post follows:

I’ve just returned to the US from London where we held our annual Application Architecture, Development & Integration Summit event, which this year prominantly featured a lot of research on cloud computing. One of my sessions was on cloud services brokerage, which I kicked-off with this picture:

It’s for a street I’d not seen before in a recently developed part of Phoenix, AZ (search for “Cloud Road, Queen Creek, AZ” in Google Maps). I took the pic right before my London trip, on my drive home after picking up dinner for my wife and I. She knows I cover Cloud computing and that I’m fond of metaphors so when I showed her the pic she immediately asked, “so, … are you running with ‘Stop!’ — or ‘Go!’?” Pithy, but indeed – which?

But it’s not like we have much choice, do we? Whether you believe the Gartner Cloud computing forcast (this and other Gartner research references require a subscription) or have simply been ‘following the money’ in the increasing supply-side investment in and — more importantly — IT consumer spend on cloud computing, it’s clear that answer is ‘Go!’. But the recent problems reported by many companies including respected organizations such as Amazon and Sony has many folks also calling for a ‘Stop!’ along the way to re-assess the risk / benefit trade-offs of this new IT consumption model. Nevertheless, there’s no compelling evidence that cloud computing adoption will be substantially inhibited by such IT (and mass consumer) ‘growing pains’. While no silver bullet for IT, Cloud computing is certainly here to stay and we expect rapid adoption to continue.

So what about my point above about “re-assessing the risk” of cloud computing adoption? One aspect of this is simple: if you need help, who are you gonna call?

Increasingly, system integrators, value-added resellers, B2B e-commerce and various other IT service providers are being tasked with answering this call. By creating new cloud-centric IT service offerings or cloud capabilities for traditional IT service offerings many IT service providers are quickly assuming the cloud services brokerage role — see Cool Vendors in Cloud Services Brokerage, 2011.

Particularly in B2B ecommerce we’ve created a roadmap for providers to add the cloud services brokerages to their traditional B2B role. These providers are competing ever more aggressively to consolidate the traditional B2B integration services market and to better position themselves to also deliver cloud services brokerage. Some noteworthy events in 1H11 include:

• Ariba’s acquisition of Quadrem — added more functionality to Ariba’s growing SaaS portfolio and expanded its B2B network’s community and global scope.
• GXS’ acquisition of RollStream — gave GXS social networking-style technology and services to better manage communities with 100′s or 1,000′s of trading partners.
• Liaison’s acquisition of nuBridges — gave Liaison token-based security, bulk (managed) file transfer, and native EDI VAN functionality for its XML real-time network.
• SPS Commerce acquisition of Direct EDI — incrementally grew it’s customer base particularly in the exploding mid-market for integration brokerage (managed B2B).
• Hubspan’s partnership with NetSuite — strengthened NetSuite’s ability to service B2B integration and expanded Hubspan’s indirect channel for brokerage services.
• Workday’s Generally Available Integration Cloud Platform — delivers integration PaaS capabilities to SaaS customers and gives Workday a cloud services brokerage role.
• Ingram Micro’s Brokering of Cloud Services — one of the worlds largest IT distributors now adds SaaS to its portfolio of IT products and services for its channel partners.

On the consumption side of cloud services brokerage I’m having ever more discussions with clients who are looking for help on IT projects that involve a combination of traditional e-commerce integration and cloud services consumption. For example, in London I spoke with an architect from a European manufacturer. We first talked about traditional e-commerce B2B, then about SaaS integration — and then we talked about (to his surprise) the viability of single-sourcing a solution for both requirements from a B2B provider that was also a CSB. No, really.

And there-in lies the rub, doesn’t it? While most companies have a pretty good idea of what solutions are available to them for traditional e-commerce, few clearly understand what approaches are available to address SaaS integration. Even fewer, still, know how solutions like integration PaaS and cloud services brokerage can help. My colleague, Massimo Pezzini, has taken the lead on our iPaaS research to advise companies who prefer a technical (‘do it yourself’) approach to SaaS integration, and I’ve re-focused nearly all my attention on the IT services (‘outsourced’) approach, aka CSB.

We’ve already published a pretty good CSB body of research, addressing such basics such as our CSB definition, reference model, vendor landscape, etc. But we need to make it more ‘real’ — we need examples. Thus I’m happy to report that in the next couple of weeks we’ll be publishing two CSB case studies:

• The Men’s Wearhouse: Leveraging StrikeIron to improve customer service via the use of CSB to deliver near real-time contact validation across 20+ core applications. June 21st update — now published! See Case Study: Men’s Wearhouse Finds StrikeIron’s CSB Suits Its Customers (login required)
• Mohawk Fine Papers: Working with Liaison to drive process innovation and new business via traditional B2B integration services plus CSB for rapid SaaS enablement. July 19th update — now published! See Case Study: Mohawk Fine Papers Uses a CSB to Ease Adoption of Cloud Computing (login required)

I’m grateful to both organizations for the time they’ve spent with me to understand their business, the problem they were solving, and the role that CSB had in helping address that and their adoption of cloud computing. These bits of research will provide insight into the CSB role and begin answering the cloud computing challenge question above — when you need help, who are you gonna call? In 3Q11 Daryl Plummer and I will also publish our 2nd annual CSB special report in which we’ll cast more light on CSB use case scenarios, the CSB landscape, the role of CSB in the cloud services value chain, etc.

So, yes, ‘Go!’ — cloud computing is here to stay. But, ‘Stop!’ — if you’re like many companies cloud computing will be a bit tricky to tackle alone. CSB can help.

Cheers,

– bjl

A recurring theme with users integrating multiple SaaS applications is whether to put the integration solution ‘center of gravity’ on-premise – or in the cloud. And whether to implement the solution themselves – or with the help of an external provider. Building upon our recent special report on cloud services brokerage we’ll deliver more research on the outsourcing option in 2011. For example, we just published our definition of integration brokerage [subscription required], a form of IT outsourcing focused on Cloud services integration often delivered via cloud services brokerage. B2B integration specialists (e.g., IBM, GXS, Hubspan, Liaison) and cloud-focused system integrators (e.g., Appirio, Bluewolf, Celigo) offer cloud services brokerage.

Most integration brokerage is still delivered in conjunction with traditional ecommerce supply chain integration, e.g., typically you turn over customer or supplier integration project to a B2B integration specialist or system integrator who implements and runs that for you. Some integration brokerage is delivered in conjunction with SaaS – for example you may have a system integrator doing SaaS integration in conjunction with some custom SaaS development. I am interested in hearing from those of you with integration projects that involve both traditional ecommerce integration *and* SaaS integration. Perhaps you implemented order management as SaaS – and now need to get orders electronically from your customers. Are you addressing this with integration technology or integration brokerage?

These Predicts 2011 Reports include (subscription required):

• Predicts 2011: Cloud Computing Is Still at the Peak of Inflated Expectations
• Predicts 2011: Application Integration: A Nimble Veteran of IT
• Predicts 2011: Platform as a Service: The Architectural Center of the Cloud

These reports are chock full of predictions and detailed analysis — I hope you saw them. But in case you were a bit too busy with your own year-end activities to see these reports I’ve summarized a few choice bits here that underscore some of the fundamental changes in IT that are affecting companies that do B2B integration and are adopting Cloud services.

Select Strategic Planning Assumptions:

By 2014, the CSB vendor landscape will have grown from dozens to hundreds of providers.

Daryl Plummer and I have already identified a few dozen providers that deliver some form of CSB offering, but we believe that the proliferation of cloud adoption, combined with challenges of consuming cloud services for their IT users, will create demand for more CSB offerings to help facilitate consumption. In case the concept of CSB is new to you, we just recently published a bunch of research on CSB in our Special Report on Cloud Service Brokerages.

By 2015, 40% of integration projects involving A2A, B2B, MFT and cloud services will be implementing with one IT solution.

My colleagues and I predict that over time companies increasingly will use just one integration product or service to address all forms of application integration. This is because users increasingly wish to single-source their product or service to address various integration problems. In response, IT providers are doing substantial R&D and mergers and acquisitions, such that they can increasingly offer consolidated integration solutions that address A2A, B2B, MFT, service-oriented architecture (SOA) and cloud integration project requirements.

By 2015, 50% of “Integration as a Service” (IaaS) will be consumed as an embedded feature of other IT offerings.

Today, we estimate that over 90% of IaaS functionality is consumed directly by IT users or IT services providers as a stand-alone solution for traditional e-commerce or cloud integration requirements. But we believe that over time, IaaS will increasingly be embedded and consumed in conjunction with other IT solutions — for example, as an embedded feature of ERP, SaaS, PaaS, Integration Brokerage, iPaaS or cloud services brokerages (CSBs).

What All This Means

As companies do more ecommerce B2B integration and consume more cloud services they will be looking for more complete and more highly evolved forms of B2B products and services to help them achieve their IT and business goals. Consolidated integration solutions, embedded integration, and Cloud services brokerage are examples of how IT solutions are evolving to meet more demanding IT user requirements.

In 2011 my colleagues and I are substantially evolving our B2B research agenda which, amongst other things, will increase our emphasis on these areas of innovation. What can you expect from us in 2011?

• Look for research on “integration brokerage”, an evolved form of managed services for B2B/EDI that is relevant to both traditional ecommerce and cloud computing projects. I am putting the final touches on a 2011 research plan for my colleagues and I to address how the market is evolving, how to choose vendors, etc.
• Look for research on “integration platform as a service” (iPaaS), an evolved form of integration as a service (IaaS) that delivers a hybrid combination of integration, governance, security and other interoperability capabilities delivered in the Cloud to link applications, SOA services and Cloud services. in 2011 Massimo Pezzini will lead a group of analysts including myself in an active 2011 research agenda on this concept.
• Look for more research on Cloud services brokerage, a form of Cloud-enabled IT services offering specifically designed to aggregate and add value to proliferating Cloud services. Besides individual research throughout the year Daryl Plummer and I and other contributors will publish another special report later in the year.

I’ve been covering B2B integration with Gartner for over 10 years and its been a good run (you can find abstracts for most of my research online here — yeah I know it ain’t pretty, but its efficient). I’ve helped users and vendors navigate and adapt to fundamental changes in B2B before, e.g., when B2B software emerged and when the EDI VANs evolved into Integration Service Providers. But the changes to B2B occurring now — driven by Cloud computing, IT consolidation, outsourcing and vendor M&A activity — are having a higher impact on B2B than anything I’ve ever seen before.

Which is why we’re making so many changes to our research. You’ve gotta adapt. We’ve gotta adapt. That’s the consequence of perpetual innovation. But in the end we’ll get through these changes — too — together.

Cheers and Happy New Year!

- bjl

• My peer review of Eric Knipp‘s upcoming case study on New York Time’s Open WOA
• A client specifically asked me — “do any B2B integration vendors offer Cloud API’s?”
• I spoke with the folks at ECGridOS — who offer a full set of Cloud integration API’s

Eric’s research tends to focus on how IT end user companies use Open WOA API’s. The storyline he’s unfolding is that there’s real value in API’s both from the technology point of view — e.g., to lower technical barriers to implementing collaborative multienterprise processes — and the business point of view — e.g., how API’s help companies to tap into “The Collective” of their external constituents to increase insight into their customer’s needs — and even their own business.

The same week a Gartner client was speaking with me about their B2B consolidation project — a typical strategic IT initiative focused on consolidating various B2B and Cloud services integration projects onto one shared B2B infrastructure (either via on-premise software or via some form of B2B managed services outsourcing). In our conversation after we’d explored all their options they casually asked me whether any of the B2B integration vendors I cover day-to-day offer a full set of API’s into their integration services, much like those publicly available for Force.com, Amazon S3, etc.

That was a great question. I’ve been following the emerging role of Cloud API’s for some time now — see Will WOA API Adoption Kill Integration? and Are You a Victim of “API Slamming”? — but not many clients ask about API’s related to integration services in particular very often. A typical use of API’s for integration services that I’ve seen is where B2B providers (e.g., GXS and Hubspan) publish API’s for their provisioning engine, e.g., so that IT end users or channel partners can provision new trading partners electronically, e.g., from Microsoft BizTalk into the GXS Trading Network. Or API’s to support automated message tracking, i.e., instead of forcing the consumer of integration-as-a-service to login with a browser or run a report.

But most API’s for integration-as-a-service are limited in scope — I am not aware of any prominent B2B provider that publishes a full set of API’s for their integration services. But Loren Data Corp — a very small Ecommerce provider with a history of OEM’ing basic VAN transport capabilities — has recently deployed a comprehensive set of API’s for their integration-as-a-service offering at ECGridOS.net. (As a .NET developer myself I was struck my the breadth and readability of these integration-related API specifications).

Without promoting one provider over another, I found it intriguing to discover such a full set of API’s devoted to integration-as-a-service. I wonder if other providers of integration-as-a-service also publish such comprehensive API’s. It also makes me think that perhaps other providers — who, Boomi? Cast Iron? Hubspan? GXS? — should also do so in order to better serve the needs of their users.

I will be following this closely, and welcome hearing more from other providers who publish API’s specifically for integration as a service. Everyone who knows me knows that I’m not prone to hyperbole, and frankly I consider API’s to be simply another incremental opportunity to enhance your overall value to external constituents. But given that Cloud services and the SOA approach to integrating distributed functionality is an enduring, high impact IT scenario I believe that B2B providers *should* be developing an API strategy for exposing their integration as a service functionality. If not immediately, probably soon.

What do you think?

- bjl

• 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.

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!