The realities of today’s economy, plus fallout from September 11-related world events, are giving a new urgency to customers’ need to integrate their business-critical systems. In some arenas, this need is bordering on compulsion as managers pursue strategies to improve operational efficiency and drive costs out of their businesses. In response, a new generation of connectivity software is arising to address the issue, and a huge new market for enterprise interoperability (EIO) – $62+ billion worth by 2006 (see figure) – is being created along the way.

EIO is Kinetic Information’s umbrella term for various technologies that can be used to join systems together. It does not refer to any one, but rather embraces many different kinds that can be used, each in its own way, to “get stuff to work together.” We describe them as follows:

• Business Process Management (BPM) chains flows of work together to design and even simulate optimal business processes that frequently span multiple information systems. Often involved in the creation and management of individual procedures and sub-level tasks, BPM tools can be critical to building effective computing infrastructures and ensuring not only interoperability, but smooth systems management as well.

• Workflow enables interoperability by routing content from user to user according to a set of business rules. As such, it does not actually integrate anything, but loosely couples systems together so business objectives can be met. The goal here is to move data around, track its progress – prompting for action when necessary – and put it back when it’s done. Electronic forms, steeped in routing capabilities as they are, can be found here, as can elements of imaging, document management, and collaborative computing as well.

• Portals are effective aggregations of connectivity technologies that are orchestrated for the express purpose of providing access to content from a common point – in other words, EIO for the front end. In Kinetic Information’s view, portals represent a class of technology rather than a technology unto itself. However, they are a crucial part of the EIO landscape in that they present a common and often familiar interface through which users post and gather critical content and perform transactional activities that keep the business running.

• Integration Tools tightly-couple applications together to create integrated environments, usually by programmatic means. Essentially the “connective tissue” of the computing world, offerings in this arena include the likes of middleware, Web services, EAI, and application servers.

This convergence is beginning to wreak dramatic change in the competitive landscape, and as it does, it is generating much confusion as buyers and sellers scramble to differentiate one offering from another, and as key players ‘partner-up’ to better capture their fair share of the emerging market opportunity (see figure).

Outlining the Market Opportunity
EIO is a problem that touches all industries, all departments, and all levels of management. It can’t be addressed as a line item on one divisional budget; rather the entire organization – from R&D to manufacturing to inventory to sales to human resources – is involved, sometimes subtly and sometimes blatantly, in achieving, maintaining, and improving interoperability on system, process, and human levels. There is one budget for EIO – the corporate budget for IT – and as just noted, very soon there will be but one market.

Within that single market, vendors from each technology space will see growth through 2006. But most of them will gain traction by building, buying, or borrowing tools from other categories. These combined-technology sales, or “converged solutions,” will prove their worth in solving big pieces of the EIO puzzle, and in general will grab market share from “pure-play” technology solutions (see figure).

We expect the following six technology combinations to be most prevalent by 2006:

1. BPM with Workflow
2. BPM with Integration Tools
3. BPM with Portals
4. Workflow with Integration Tools
5. Workflow with Portals
6. Integration Tools with Portals

1. EIO will be a platform play
2. Transaction technology will move downmarket
3. Web services will go from fad to fundamental
4. Business activity monitoring is EIO’s potential “killer app”
5. ERP vendors will go mainstream
6. “Content” technologies will turn commodity
7. Storage will rebound as a network utility
8. Symbiosis will emerge between wireless services and distributed software