insight™ 2011 Market Predictions for Infrastructure Software A new year means a new look ahead from Lustratus to the world of infrastructure software and related hardware. 2010 saw a significant upswing in IT expenditure as the credit crunch restrictions started to lift, and Lustratus sees this carrying on through 2011, although confidence is still not back to pre-recession levels. Lustratus predictions for 2011 are:

Lustratus predictions for 2011 • Business rules will continue to increase in popularity

• Cloud computing projects will pause for thought

• SOA adoption will continue although with a lower profile

• The market for open source integration tools will return to growth

• Appliances will see strong growth, particularly for integration needs Before going into the 2010 predictions in more detail, it has become traditional for Lustratus to score itself on its predictive powers for the closing year.

Lustratus 2010 forecast performance Recapping, the Lustratus forecasts for 2010 were

• Business alignment and control (BPM, BRMS, Events) will continue to grow • Internal and Office Clouds will grow in acceptance • Security will be a growing area, particularly as Cloud picks up • Integration makes a comeback • Software patent suits will surge Once again, looking at how 2010 ended up, the Lustratus predictions appear to have been pretty accurate. The first prediction was spot on, with the overall BPM market growing at anywhere between 15-25% depending on the market definition. The big news was probably IBM acquiring Lombardi, which has strengthened its hand, but Oracle, Software AG, Pegasystems and a host of smaller, boutique BPM companies also saw strong growth.

The Cloud situation was a little more chequered. The level of interest in Cloud Computing has remained high all year, and as predicted almost all of the attention (at least within larger companies) has been on internal clouds or on desktop or office-based Clouds where cloud facilities are used to store or archive desktop information and applications. But this is a little way from the Lustratus prediction of ‘acceptance’, since the number of projects that have been implemented in this area remains low.

The security prediction was a bit of a ‘gimme’. Security has never dropped in importance, although it has definitely been true that concerns over security in

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insight™ the Cloud Computing area has definitely held back projects. The most positive aspect supporting the fulfillment of this prediction has been the rapidly growing interest in appliance-based ‘cloud gateways’ where the appliance can manage security to and from the cloud. So in summary, this prediction was probably accurate enough, but was really a rather obvious one.

Integration definitely made a comeback in 2010, although in truth Lustratus believes it never really went away. However, 2010 saw a lot of attention being given to issues like how to link enterprise and cloud resources together, and how to integrate different parts of business processes more effectively with each other. Interestingly, there are also reports of strong demand for modernized file transfer solutions. This may surprise some, who may feel that file transfer is so old that it died years ago, but the fact is that many companies still use a consid-erable amount of file transfer to integrate operations, and more modern file transfer approaches with better management/scheduling/security/performance have proved attractive.

Finally, there were indeed some very high profile software patent trials in 2010, settling for multi-millions of dollars in a number of cases. Perhaps the most exciting was the i4i case against Microsoft, which resulted at one point in Microsoft being ordered to stop shipments of Word. The much-touted patent suit of Juxtacomm vs just about every software company in the world over data exchange turned into a bit of a damp squib though, with minimal settlements from companies such as IBM, Microsoft and Informatica. Although a second round of suits have been put in place, since IBM in particular makes billions from data integration it seems unlikely that any of the ‘second-string’ firms will settle for much. Importantly, however, the US may finally be slamming down the shutters on the so-called ‘patent trolls’ that have been driving a lot of the legal activity. As part of its appeal against the $200M+ award to i4i, Microsoft has banded together with a range of software companies to take the issue to the Supreme Court, and at the end of 2010 the Supreme Court agreed to hear the appeal. This suggests that shooting down patents will be made much easier, particularly when it is obvious to all that the patent should never have been awarded anyway.

In summary, Lustratus hit the mark in all of its predictions, although to be fair the Cloud Computing marketplace has not advanced to the extent Lustratus expected.

Lustratus 2011 predictions Business rules will continue to increase in popularity To some extent, this forecast continues on from the 2010 forecast on the growth of the whole BPM/Events/Business Rules market. However, the reason for zeroing in on Business Rules within this sector is that the attraction of business rules is be-coming clearer to executives responsible for funding IT projects. Specifically, the two key benefit areas are emerging as business agility and compliance. Lustratus has been tipping business process management (BPM) for a number of years, and this will still be a strong area, but the attraction of business rules is that it may not be necessary to get all processes into a BPM model to gain advantages. Business

What are business rules? In IT terms, business rules are simple non-technical expressions of the rules that govern operational process-ing.

The idea behind a business rules solution is that business users should be able to de-fine and modify these rules, dynamically changing the way the IT system operates without any programming.

insight™ rules can be set up specifically for the key areas of business control, and these rules can be gathered together in a simple, readable set of controls for the business. It is therefore easy for business users to adjust these rules to handle new requirements, but it also provides an ideal summary of business compliance to regulatory or cor-porate requirements.

A couple of examples might help. A supplier might want to put in place a loyalty program that assigns a discount level to a customer based on volume. A business rule would read something like “If customer volume > 1M units, then add 10% to the discount”. Now, if the management team decide they need to put more incentive in place for the first quarter it is simple to change this rule to specify 15% as the earned discount, and then change it back after the first quarter.

Alternatively, a manufacturer may be required through regulations to spread risk by ensuring that no supplier controls more than 20% of the supply for any one part. A business rule could be set to say something like “If purchase order to this supplier takes overall volume beyond 20%, reject the PO”. It is now a simple matter for a compliance officer to check this rule periodically to ensure that regulations are being properly applied.

One reason business rules are suddenly becoming a much more active area is that the vendors providing business rules engines such as IBM, Oracle, Software AG, SAP, TIBCO and Pegasystems are doing a much better job of supporting the use of legacy applications and code as part of business rules. This usually involves wrapping the legacy code up so that its functionality can take its place in the rele-vant rules, but this enables a lot more companies to look at applying business rules to their current IT implementations.

Cloud Computing projects will pause for thought As Lustratus tipped last year, 2010 was a year in which a lot was written and spoken about Cloud Computing. Hundreds of vendors jumped into the emerging Cloud market, all claiming that Cloud Computing was going to totally change the face of modern IT. Many companies found themselves looking at Cloud and wondering whether they should be getting involved.

However, as the year went by, user companies began to realize some important issues around Cloud. The first was that while an internal cloud that remained within the corporate boundary might take virtualization a little further, external clouds brought with them a whole load of uncertainties. Security is clearly a worry for many, with the thought of putting corporate data outside the firewall being anathema to many senior executives. There was also a lot of churn in the Cloud marketplace in 2010, with a number of cloud suppliers going bust.

But perhaps most importantly, many companies have started to realize that de-spite what the hype might claim, the Cloud Computing model does not suit all types of applications. While it might be a very attractive option for projects like virtualizing a swathe of vanilla Microsoft Office laptops into a cloud-based model, where the applications and data can live in the Cloud, running business applica-tions in an external cloud creates a whole host of problems.

What is Cloud? Cloud Computing is a utility-based model of operations where users can call up resources from a shared pool as needed, in a self-service fashion and with a usage-based accounting model.

Resources could be IT infrastructure, an application environment or even a pre-packaged application. These resources may reside internally, externally or both.

insight™ Numerous factors need to be taken into account, like how often an application needs to consult corporate databases, what type of operating environment it requires, whether it is handling sensitive information, what the local regulations require in terms of location of data and many others. As a result, Lustratus pre-dicts that 2011 will be a year of pause. After an initial surge of excitement, companies are going to step back and give the whole Cloud Computing model more thought. Research will be needed to look at workload candidates for Cloud, analysing what the applications do, what resources they need and what sort of performance, availability, reliability and security they need.

SOA adoption will continue, although with a lower profile During 2010 there was little spoken about service-oriented architecture (SOA). This had been very much in the fore of market chat for a number of years, but in 2010 it was displaced by discussions about BPM and Cloud. So does this mean SOA is now out of favour?

In fact, the lack of chat around SOA is really just a symptom that the service-oriented concept has matured to the point that many companies just assume that it is a best practice and therefore it needs little further discussion. Admittedly, many companies are being somewhat selective about their SOA adoption, perhaps de-ciding to make do with an ESB and web services and not taking on the full-scale SOA architectural revamp. But the SOA concepts are now firmly embedded in the IT psyche. It must also be remembered that SOA concepts are a fore-runner to technologies like BPM, Rules and even to some extent cloud-based applications. Anywhere that business integration is required, SOA will be there or thereabouts.

The market for Open Source integration tools will return to growth Back at the start of 2009, when the credit crunch was at its worst, Lustratus predicted that Open Source projects would enter a level of hiatus. The reason-ing was that at a time when everyone was trying to reduce people costs, the idea of taking on Open Source offerings which by definition tend to need ‘putting together’ was suddenly highly unpopular.

However the situation has been steadily improving over the last 12 months, to the point where Lustratus believes companies are once more prepared to consider Open Source offerings as a way to save costs. Normally the popular areas for Open Source tend to lag the hype curve, and the integration tools area is a great example of a more mature area where Open Source has a real chance of making inroads. All companies still need to handle integration needs, but the technological maturity in this area makes it ideal for delivering a commoditized, open source version of the tooling. Companies like Talend, MuleSource, JBOSS and FuseSource have established offerings, and with VMWare’s backing Spring-Source could become another contender.

Of course, mature technology in itself is not enough to drive an open source market segment. A major inhibitor to open source is the perceived risk that the adopter is taking on. What about support? What about new requirements? But in the integration tools space there are already many companies either supplying open source offerings or providing support and implementation help around them. Open source will never replace the large-scale integration vendors and

What is SOA? SOA is a model of opera-tions where programs are delivered as business services to deliver specific pieces of business function-ality.

These services can be accessed from anywhere in the network, and can be combined and recombined to deliver different business functionality quickly and easily.

insight™ projects, but the presence of such commercially-based activity helps to make the overall market fertile for open source initiatives. Having plenty of knowledge, experience and best practices already available around the technology helps to make the open source approach viable and mitigates the risk.

Appliances will see strong growth, particularly for integration needs The recession at the end of the last decade has had some lasting effects on the IT landscape, and one that is not going to go away any time soon is the desire to simplify. IT infrastructures have got increasingly complicated as they have spread and become more inter-connected, and this drives up skills and people costs to support, maintain and enhance the infrastructure. But the recession brought a high level of focus onto these costs, and companies are continuing this focus even though most economies have more or less returned to growth. Integration has continued to become more and more prevalent as companies look to streamline and automate processes across the value chain, but integration places considerable demand on the underlying infrastructure and contributes significantly to the level of complexity.

One response to this need for infrastructure simplification is the appliance model— package up some of the infrastructure functionality in a pre-packaged box and just connect it up. This offers a level of standardization and uniformity across the enterprise while at the same time delivering a solution with a strong security profile. Within a network of integrated systems, for example, an appli-ance may make a lot of sense as a gateway between different domains. Cloud computing offers another obvious scenario for a secure and robust gateway from the enterprise network into the Cloud.

But it is really the simplicity that is driving the appliance market. Not only do appliances offer pre-built solutions, but by their nature they are pretty tamper-proof, and offer only very limited opportunities for modification. Often, appliances have a proprietary operating system environment that does not allow program-mers access to the functionality, with configuration options being the only level of customization offered. This helps to maintain uniformity and reduces the need for support staff.

What are appli-ances? Appliances are dedicated servers designed to handle specific functional chal-lenges. They are usually pre-loaded, only requiring con-figuration on installation.

Appliances are delivered in a self-contained hardware form factor, delivering hardened security and hardware-based performance assistance.

Summary Economies have started the long path to recovery in 2010, and although 2011 may still be quite a rocky ride, the path is likely to continue to be in an upward direction. However the days when companies will leap into uncharted waters in the hope of gaining some sort of advantage are all but gone, at least for the moment. Instead there is a much more pragmatic air around IT projects and purchases.

The focus on tying IT projects to specific and detailed business aims will continue, driving interest in areas such as Business Process Management (BPM) and Business Rules. Rules in particular provide a quick and easy way for businesses to become more agile and to seize more control. But focus will also continue on ways to integrate different parts of the business and the value chain more closely, to squeeze savings out of IT operations and to reach higher levels of process efficiency and effectiveness. Service-oriented architecture will continue to have a lot to offer in this area.

But the pragmatic focus will also cause people to need to be really sure before embarking on a potentially costly new project. Perhaps the clearest example of this is likely to be Cloud Computing. While everyone is talking about it, and many people really like the idea of ‘utility computing’ where a company only pays for what it uses, businesses are not just going to blindly rush into it just because vendors or market ‘experts’ say it is the right thing to do. After the initial furore around Cloud Computing in 2010, 2011 is likely to be a year of more sober reflection as some of the issues such as security and selecting the right workloads for cloud rear their heads.

Having said that, as more technology areas reach the required level of com-moditization, open source is liable to return to the agenda. After the hiatus of 2010, when companies did not have the people to spare to assemble open source-based solutions, companies are likely to drift back to the attractions of replacing commodity software products with open source ones. Integration is one such area which is likely to see increased activity, with the technology

reaching a bit of a plateau after 15-20 years of major advances.

But finally, the buzzword in IT organizations for 2011 is going to be ‘simplification’. Complexity has reached the point where it just costs too much and inhibits movement. The emergence of commercially viable appliances could not have been timed better. They offer an easy, reliable and secure means to significantly reduce complexity and free up resources and money.

...insight 2011 will be the year of ’simplify, simplify, simplify’ in the IT space. Business users look for simple rules to control operations, companies strive to simplify and streamline processes through better integration and appliances offer a new approach to significantly reducing infrastructure complexity and costs. The companies that succeed will be those who can see past the media hype, and focus in on pragmatic measures to make things simpler.

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