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1
Market AnalysisQ3 FY06
Updated: 10/2/06
2
AgendaAgenda
• Analysis Objectives• Setting the Stage
• CEO Opening Remarks• CTO Opening Remarks
• Analysis Objectives• SOA Market Definition and Segmentation• SOA Application Development Market
• Predictions and Key Assumptions• Drill down
• BPM Market• Predictions and Key Assumptions• Drill down
• SOA Run Time Market• Under construction
• Open Discussion
3
Market Analysis ObjectivesMarket Analysis Objectives
• Analyze SOA market landscape
• Identify market “opportunity zones”
• Determine appropriateness of product positioning messages
• Capture emerging trend data to aid with future software release decisions
4
Setting the Stage
5
Current CEO ObservationsCurrent CEO Observations
• We need to identify our core – and relatively few -competitors and position effectively against them • Partner aggressively with all other market leaders
• BPM/Orchestration market segment in the SOA world appears analogous to the transaction/messaging market of the client server era• Major vendors see need to “own” it/crush new entrants which
make this an unlikely expansion area for Skyway
• Application development space still seems open due to abdication to eclipse based tools• Key problem appears competing with free/open source
offerings…will need to educate on cost of free
• Skyway’s awareness as a vendor is still very low• Need to create and execute a program to raise it in Q4/Q1
6
Setting the Stage
7
What is SOA?What is SOA?
• A new way of building software• What HTML is to User Interface – XML is to Business
Logic • Consistent access from anywhere
• Consistent access across OS and technology boundaries
• A Service is business logic exposed through XML
• A single Service is accessed by lots of applications
• Services simplify solutions• It does not take a coder to use a service
• More services means less coding
• Less coding means building solutions faster
8
Why the Need for SOAWhy the Need for SOA
• IT cannot keep up with business• Business now moves in Internet time
• IT still moves in IT time
• Adapt or die
• Coding is a dead end• Coding takes too long - even for fast coders
• Changing existing code is as bad as new code• Need a coder to figure out what was previously coded
• Need a coder to write more code to adapt existing code
• Code generation and code modeling are the next steps in building applications
9
What Skyway DoesWhat Skyway Does
• Models, Not Code• Modeling means making a graphical representation of what you
would otherwise code
• Current Modeling tools only go so far• Good modeling tools eliminate as much as 30% of code
• Skyway eliminates almost 100% of code
• Model Driven Service Design• Skyway models are implicitly SOA
• Even if you do not care about SOA
• Skyway simplicity creates confusion• The graphical nature is often confused with BPM at a glance
• Ease of understanding what was built in Skyway contributes to the misunderstanding
10
Platform Independent Delivery
Open Application Assembly
BPM
Skyway MDSD
Where Skyway FitsWhere Skyway Fits
Developer
Developer
Service
ServiceService
Service
ServiceService
Business Process
Analyst
Analyst
ServerServer
11
SOA Market Definition and Segmentation
12
SystemManagement
Software
Hardware
ApplicationInfrastructure
Applications
The SOA Software Stack:
As defined by Skyway
The SOA Software Stack:
As defined by Skyway
Source: IDC, 2006 , Triple Tree, 2005, and Skyway Management estimates
ERP, CRM, SCM, Business Intelligence / Analytic Applications
Security (Encryption, PKI, Certificate Authority)
Business Process Management - IBM, BEA, Lombardi, Savvion
ApplicationPlatforms
BEA WL Portal,SAP NetWeaver,Oracle Fusion,
IBM WebSphere
IntegrationPlatforms
IBM WBI, webMethods,
BEA WLI,Tibco
ApplicationDevelopment
Skyway, IBM Rational, Compuware
OptimalJ, Eclipse
GovernanceSystinet, AmberPoint
Application Servers
Data Warehousing & Integration Legacy Access Middleware
Application Systems Management
Databases Legacy Applications
Operating Systems Storage Software
Servers Data Storage Devices
ESBCapeClear, Tibco, BEA,
IBM
RegistryAmberPoint,
SOA Software,Infravio
13
SystemManagement
Software
Hardware
ApplicationInfrastructure
Applications
The SOA Software Stack:
As defined by Skyway
The SOA Software Stack:
As defined by Skyway
ERP, CRM, SCM, Business Intelligence / Analytic Applications
Security (Encryption, PKI, Certificate Authority)
Business Process Management - IBM, BEA, Lombardi, Savvion
ApplicationPlatforms
IntegrationPlatforms
IBM WBI, webMethods,
BEA WLI,Tibco
ApplicationDevelopment
Skyway, IBM Rational, Compuware
OptimalJ, Eclipse
GovernanceSystinet, AmberPoint
Application Servers
Data Warehousing & Integration Legacy Access Middleware
Application Systems Management
Databases Legacy Applications
Operating Systems Storage Software
Servers Data Storage Devices
ESBCapeClear, Tibco, BEA,
IBM
RegistryAmberPoint,
SOA Software,Infravio
Technology market space where Skyway plays. It is critical for us to become a leader within this space.
Source: IDC, 2006 , Triple Tree, 2005, and Skyway Management estimates
14
SystemManagement
Software
Hardware
ApplicationInfrastructure
Applications
The SOA Software Stack:
As defined by Skyway
The SOA Software Stack:
As defined by Skyway
ERP, CRM, SCM, Business Intelligence / Analytic Applications
Security (Encryption, PKI, Certificate Authority)
Business Process Management - IBM, BEA, Lombardi, Savvion
ApplicationPlatforms
IntegrationPlatforms
IBM WBI, webMethods,
BEA WLI,Tibco
ApplicationDevelopment
Skyway, IBM Rational, Compuware
OptimalJ, Eclipse
GovernanceSystinet, AmberPoint
Application Servers
Data Warehousing & Integration Legacy Access Middleware
Application Systems Management
Databases Legacy Applications
Operating Systems Storage Software
Servers Data Storage Devices
ESBCapeClear, Tibco, BEA,
IBM
RegistryAmberPoint,
SOA Software,Infravio
Technology Market segments that enable SOA applications but do not require direct partnerships.
Source: IDC, 2006 , Triple Tree, 2005, and Skyway Management estimates
15
SystemManagement
Software
Hardware
ApplicationInfrastructure
Applications
The SOA Software Stack:
As defined by Skyway
The SOA Software Stack:
As defined by Skyway
ERP, CRM, SCM, Business Intelligence / Analytic Applications
Security (Encryption, PKI, Certificate Authority)
Business Process Management - IBM, BEA, Lombardi, Savvion
ApplicationPlatforms
IntegrationPlatforms
IBM WBI, webMethods,
BEA WLI,Tibco
ApplicationDevelopment
Skyway, IBM Rational, Compuware
OptimalJ, Eclipse
GovernanceSystinet, AmberPoint
Application Servers
Data Warehousing & Integration Legacy Access Middleware
Application Systems Management
Databases Legacy Applications
Operating Systems Storage Software
Servers Data Storage Devices
ESBCapeClear, Tibco, BEA,
IBM
RegistryAmberPoint,
SOA Software,Infravio
Technology market segments offering many products that solve a large portion of the SOA runtime problem, making them not interesting and most likely expensive for Skyway to enter but is a good opportunity for partnering.
Source: IDC, 2006 , Triple Tree, 2005, and Skyway Management estimates
16
SystemManagement
Software
Hardware
ApplicationInfrastructure
Applications
The SOA Software Stack:
As defined by Skyway
The SOA Software Stack:
As defined by Skyway
ERP, CRM, SCM, Business Intelligence / Analytic Applications
Security (Encryption, PKI, Certificate Authority)
Business Process Management - IBM, BEA, Lombadri, Savvion
ApplicationPlatforms
IntegrationPlatforms
IBM WBI, webMethods,
BEA WLI,Tibco
ApplicationDevelopment
Skyway, IBM Rational, Compuware
OptimalJ, Eclipse
GovernanceSystinet, AmberPoint
Application Servers
Data Warehousing & Integration Legacy Access Middleware
Application Systems Management
Databases Legacy Applications
Operating Systems Storage Software
Servers Data Storage Devices
ESBCapeClear, Tibco, BEA,
IBM
RegistryAmberPoint,
SOA Software,InfravioTechnology market
segments that are important for us to watch for possible partnering opportunities and offer added value integration capabilities.
Source: IDC, 2006 , Triple Tree, 2005, and Skyway Management estimates
17
SOA Market CharacteristicsSOA Market Characteristics
55055Relative Partnership Potential 2
00500Relative Competitive Threat 2
ModerateHighHighHighHighStrategic Importance to SOA 1
2%16%7% SW
5% total4%3%CAGR
$110B
$121B
$12B
$25B
$3.7B SW$34B total
$5.2B SW $45B total
$37B
$45B
$16.5B
$19B
Market Size 2004
Market Size 2009
App Platforms
Security
AppDevTools
(software only vs. total)
DatabaseApp ServerMetrics
Notes:1 Skyway Management determination
2 Relative ranking on scale from 0 (low) to 5 (high)
Source: IDC, 2006 , Gartner, 2006 and Skyway Management estimates
18
SOA Market Characteristics (cont.)SOA Market Characteristics (cont.)
44313RelatitvePartnership Potential 2
11242Relative Competitive Threat 2
High (after several Services projects completed)
High (after several Services projects completed)
High (after several
Services projects
completed)
LowHighStrategic Importance to SOA 1
42%22%10%3%CAGR
$60M
$350M
$7.5B
$20.5B
$1.9B
$3B
$135B
$160B
Market Size 2004
Market Size 2009
ESBRegistryGovernanceBPM & BPELEAIMetrics
Notes:1 Skyway Management determination
2 Relative ranking on scale from 0 (low) to 5 (high)
Source: IDC, 2006 , Gartner, 2006 and Skyway Management estimates
19
Relevant DiscussionRelevant Discussion
• Segment Review
• Application Development
• Deep dive
• BPM Overview
• SOA Governance – section under construction
• Open Discussion
• Market Opportunities
• Product Development Gaps and Response Plans
20
SOA Application Development (AppDev) Market
21
AppDev: Market OverviewAppDev: Market Overview
• $3.7B worldwide in 2004• Java segment is approximately 60% ($2.2B)
• $5.2B worldwide by 2009 (CAGR 7%)• Java growth is 36% during same time period ($3.5B by 2009 or 67%
share)
• Trends• SDLC is moving to Service Oriented Development of Applications
(SODA)• Gaps in SODA
• Service to UI integration• Service to BPM integration• Design Time to Run Time (and back to Design Time) transition
• Analysts and Market validate modeling trends• Key Quote #1 – coding wont provide you agile IT (Gartner, 2006)• Key Quote #2 – tools are back (Gartner, 2006)
Source: IDC, 2005 and Gartner, 2006
22
AppDev: Market Predictions and Key Assumptions
AppDev: Market Predictions and Key Assumptions
• Analyst Predictions• By 2008, SODA will provide the basis for 80% of new development projects
(0.8 probability)-Gartner
• By 2010, 75% of mainstream IT organizations will have formal open source acquisition and management strategies (0.8 probability)-Gartner
• 675 firms with >40,000 will implement SOA this year-Forrester
• IT cannot code its way to Agile IT – it must be done through modeling- Gartner AppDev Summit, Sept. 2006
• AppDev tools are back-Gartner AppDev Summit, Sept. 2006
• Skyway’s Key Market Assumptions• Developers at SI and Enterprise shops have productivity problems due to the
inherent limitations of coding • Modeling is the answer to faster and more agile application development
• Skyway’s main competition is status quo/Eclipse (free)
• Developers are protecting their coding turf
23
AppDev: Business Problems require solutions to IT issues
AppDev: Business Problems require solutions to IT issues
• Business Issues• Persistent competitive pressure to differentiate• Limited success in commercializing new business opportunities• Ongoing need to improve customer service levels and total
customer experiences• Increased requirements for speed and flexibility• Adoption-paralysis of newer, enabling technologies
• IT Issues• Inefficient IT resource utilization and an inability to cost-effectively
reuse established applications• Inability to align IT with the Business Unit• Declining data consistency and quality• Increasing levels of IT backlog• Lack of available skills and expertise to maintain legacy systems• Culture of status quo, apathy, and complacency
Source: Gartner, 2005 and internal Skyway data
24
AppDev: Critical Success FactorsAppDev: Critical Success Factors
• Improved IT responsiveness to business change
• Improved resource utilization
• Reduce application backlog and extend legacy application platforms
• Consistent, progressive, and flexible policy and process implementation
• Eliminate attrition risk
• Long term IT cost savings
Source: Internal Skyway data
25
AppDev SWOT: SkywayAppDev SWOT: Skyway
Strengths Weaknesses
Opportunities Threats
• Broadest and most advanced modeling tool available
• Built from the ground up to enable modeling as the path to SOA
• Deployment and Model combine to keep all solutions platform-independent
• How to leverage
• Simplify core marketing messages to focus on value created for Application Developers
• Expand customer support capability to capture wider range of market feedback for future releases
• Private company and small Sales force
• Limited functionality (via Governor) in the Analysis phase
• Assemble phase offers great strengths, but is limited by not having built in connectivity to service registries and Test phase is greatly enhanced by allowing developers to code automated tests, but no functionality that enables Quality Assurance engineers
• No functionality in the Manage phase
• How to mute
• Consider partnership with BPM & ESB/Registry companies (efficiency gains for Service creation)
• Skyays underutilized multi-orchestration capabilities
• Linkage to Services created by BPM
• Creation of new Services built via Builder
• “Hidden” UI services
• Partnership with complementary companies (ie, BPM, ESB, Registry, Governance) to accelerate creation of new Services
• How to capitalize
• Refine Builder’s Orchestration marketing messages
• Enter partner agreements in Q4
• Lack of broader market acceptance
• Lack of awareness of marketing messages and inability to communicate value of models vs. coding
• Selling power of larger competitors
• How to mitigate
• Partner with SI to ensure faster technology adoption
• Communicate partnerships with larger ISV companies to “buy scale”
26
AppDev SWOT: IBM/RationalAppDev SWOT: IBM/Rational
Strengths Weaknesses
Opportunities Threats
• Large public company with large Sales force and large installed base
• Combined benefits of models and Java coding; excellent functionality in the areas of Analysis, Design and Test
• Perceived as standards based due to pioneering of UML and the Rational Unified Process
• How to position Skyway as an alternative
• Rational models only go to the skeleton code level and do not accelerate construction
• Complexity of Rational makes it difficult to learn and use
• As a result of numerous acquisition, they offer a large but complex tool set that is difficult to use and learn
• Very limited integration exists between the various offerings to address the SOA cycle
• IBM offerings are not integrated with the Rational offerings
• Why Skyway is the answer
• We model the Java code, they write it
• We deploy anywhere, they offer no deployment options in Rational and only IBM support for Eclipse plug-ins
• There is very little opportunity to work with Rational since they view themselves as very competitive to us
• IBMs size, scope of offerings, and large installed base
• Shops that use Rational likely will not consider Skyway
• While the value of the offerings are quite different, IBM claims Rational does pretty much what we do and may be able to “freeze” deals
• If IBM were to rewrite and refocus Rational as a direct play against Skyway, they could be a very fiece competitor
• How can Skyway mitigate
• Emphasize our model-based coding strengths andhighlight Rationals coding/complexity weaknesses
27
AppDev SWOT: BEAAppDev SWOT: BEA
Strengths Weaknesses
Opportunities Threats
• Strong and well rounded offerings around SOA management and development
• Perceived as a leader in the SOA space
• Doing a good job of integrating point solutions they purchased to have an integrated offering
• Excellent EAI and integration tools
• Drives may SOA and Java specifications
• How to position Skyway as an alternative
• No modeling or service creation components other than coding
• Skyway complements BEA and feeds new services into its tools
• Most solutions are not fully integrated since they were acquired
• No focus on service creation; the answer is to write code like you always do
• Why Skyway is the answer
• Skyway works well with BEA tools
• We deploy to anything; their tools focus only on BEA deploys
• Opportunity to work with BEA from a service-creation perspective
• Skyway tools create services that can feed directly into BEAsofferings
• BEAs size and scope of offerings
• If they choose to focus on modeling, we will be “frozen” from most BEA accounts
• Even without entering the modeling space, if they perceive us as competing for dollars then they could position us as unnecessary
• How can Skyway mitigate
• Emphasize our model-based coding strengths and highlight BEAs coding/complexity weaknesses
28
AppDev SWOT: Compuware/Optimal JAppDev SWOT: Compuware/Optimal J
Strengths Weaknesses
Opportunities Threats
• Combined benefits of models and Java coding
• Integrated tightly with Eclipse
• Very extensible for organizations that desire to continue writing code and only partially use models
• Integrated with the Compuware Optimal Trace product for Requirements Gathering in the Analysis phase
• How to position Skyway as an alternative
• Skyway is true modeling with Java code output
• Optimal J sill requires substantial code writing
• The model only goes to a limited depth, substantial coding is required to get from model to solution
• No functionality in the Assemble phase
• They only address the Test phase through existing coding standards, they offer no functionality themselves
• The Model is not insulated from the underlying infrastructure – models are tied to explicit platforms once coding is begun
• Deployment is not addressed at all, standard technologies such as Ant are their only answer
• Why Skyway is the answer
• We model the Java code, they write it
• We deploy anywhere, they offer no deployment functionality
• Very little opportunity for Skyway to work with Optimal J since the products are similar in positioning and value
• While Optimal J will not see the same acceleration that Skyway can, it could be more accepted as a middle ground by developers
• It allows them to continue writing code
• But still see some acceleration through modeling but to keep code in the equation
• Compuwares size and large installed base of Optimal J users
• How can Skyway mitigate
• Emphasize our model-based coding strengths and productivity gains combined with access to standard, well-formed Java code
29
AppDev SWOT: Microsoft/VisualStudioAppDev SWOT: Microsoft/VisualStudio
Strengths Weaknesses
Opportunities Threats
• All solutions are fully integrated
• Easy to use for building simplistic solutions
• Perceived as the easiest platform to use for building solutions
• Very easy to SOA enable anything that is built
• How to position Skyway as an alternative
• For Java development environments, we are the most productive modeling tool in the market
• Once a heterogeneous environment beyond Microsoft is required, complexity arises
• Very little is offered to accelerate the test phase, they rely on ease of developer tools to accelerate this phase
• BizTalk is utilized for Assembly, but no clear connection between it and the Build phase
• Why Skyway is the answer
• Microsofts inability to align with non-Microsoft environments and/or non-Microsoft products
• If Skyway were to deploy to .Net servers, there are string partnering opportunities with Microsoft
• Microsoft has not been focusing on their tools or SOA infrastructure; instead, they are focusing on solutions delivered through SOA
• They are Microsoft
• If they choose to enter the modeling space, they likely would create an excellent product
• Skyways lack of support for .Net limits our overall market opportunity
• How can Skyway mitigate
• Explore feasibility of adding .Net functionality
30
AppDev SWOT: Sun/Java Studio CreatorAppDev SWOT: Sun/Java Studio Creator
Strengths Weaknesses
Opportunities Threats
• Still perceived as a leader in the Java space
• Broad coverage of the SOA SDLC spectrum
• Marketing message blurs the SDLC reality and makes SOA appear ready for today – takes SOA knowledge to get around
• How to position Skyway as an alternative
• They offer nothing in the way of service creation, other than writing code
• Their focus is more BPM than creating the services to feed the BPM
• Solutions where acquired and are not integrated
• No offerings in the modeling space; fixated on the SDLC as if critical mass of services already exist
• Test and Deploy phases are only expedited for Assemblies – no value at all when constructing new services or solutions
• Build phase handled by Studio Creator, which can facilitate only the construction of user interfaces but provides virtually no value for complex business solution creation
• Design phase very limited, again covered by Studio Creator for prototyping
• Why Skyway is the answer
• Skyway works well with Sun tools
• We deploy to anything; their tools focus only on Sun deploys
• Since they offer no solution for the creation of atomic services, Skyway can likely offer the same value to them that we can to any other BPM vendor for building service content
• Suns size and scope of offerings
• The Sun suite of products appear to be very well-rounded and solve many problems within SOA
• Sun has some ability to “freeze” deals when they are head-to-head with Skyway
• How can Skyway mitigate
• Emphasize our model-based coding strengths and highlight our ability to also create/assemble services to support their BPM tool
31
AppDev SWOT: EclipseAppDev SWOT: Eclipse
Strengths Weaknesses
Opportunities Threats
• Open source, and in only 4 years, they are represented in 50% of Java development projects (EvansData, 2005)
• The de facto coding environment for Java today
• Excellent tool for Java developers in the Build phase
• Many open source plug-ins to augment functionality
• Standards based for just about everything and quite open and extensible
• Efforts under way to provide a modeling plug-in through open source, it is still aiming at coders just like OptimalJ
• How to position Skyway as an alternative
• Skyway generates the same Java code but at a much lower cost
• IBM links
• Manual coding is only option (high cost, high knowledge requirement, no independence during deployment)
• Almost no functionality in the Analyze and Design phases – even free open source plug-ins are not available
• Assemble phase is only addressed in Eclipse by plug-ins, but no free plug-ins for this phase are available
• Test is only addressed through standard test coding tools (JUnit)
• Deploy is only addressed through standard scripting tools (Ant)
• Why Skyway is the answer
• We model the Java code, their tool requires coding
• We deploy anywhere, they do not have deployment functionality
• Moving Skyway on to the Eclipse platform will give us a much more open appearance
• This would allow us to leverage the Eclipse brand, installed base, and momentum
• For people that want to keep coding, Eclipse is the de facto Java standard
• Eclipse has modeling initiatives that could be competitive over time
• How can Skyway mitigate
• Explore feasibility of adding Eclipse functionality
32
AppDev: Key Segment ParticipantsAppDev: Key Segment Participants
12BEA
Manage
4
12
14
8
19
17
TotalAssemble
Sun
DeployTestBuildDesignAnalyzeSolution
Eclipse
Microsoft
Optimal J
IBM/Rational
Skyway
R R R
Full capability in current product offering
Partial (or lack of) capability in current product offering
R – Denotes the solutions from the Rational product line – these solutions are detached from the other IBM solutions that were
delivered through numerous acquisitions
Source: Gartner, 2005 and internal Skyway data
AppDev SOA Lifecycle
33
IBM
IBM
IBM & MSFT
IBM & MSFT
Skyway
IBM
High
Skyway1.350.900.901.501.051.500.300.15Viability
7.45 (3)
1.20
1.60
0.75
3.00
BEA
7.10 (5)
1.05
1.40
0.75
3.00
Sun
10.35 (2)
1.35
2.00
2.00
3.50
MSFT
6.80
(6)
0.90
1.60
1.25
2.00
Optimal J
Skyway1.802.000.200.2Awareness
0.75
1.00
Eclipse5.65 (7)
11.25 (1)
7.30 (4)
1.0Total Score
Skyway0.751.500.300.15Execution
Sun BEA
Eclipse1.502.250.25Differentiation
Eclipse4.754.250.25Innovation
LowEclipseIBMSkywayWeight
Factor
Segment Success Factors
AppDev
Source: Skyway Management estimates
Notes:Total maximum weight-adjusted score is 14.5
AppDev: Competitor SummaryWeight-Adjusted Analysis
AppDev: Competitor SummaryWeight-Adjusted Analysis
34
AppDev: SummaryAppDev: Summary
• Skyway is very strong with our disruptive offering relative to our “peers”
• Our “peers,” however, are much larger and possess more recognizable brands
• Partnerships can help us acquire scale quickly and improve our Sales execution capabilities
• Areas needing attention or consideration
• Finalize up our positioning and accelerate broader awareness of our value proposition
• Consider Eclipse and .Net functionality to help with scale, but without diluting our core value proposition
• Monitor the market for new entrants and/or new products as modeling acceleration continues
35
Business Process Management (BPM) Market
36
BPM ProcessBPM Process
37
BPM: Market OverviewBPM: Market Overview
• $1.9B worldwide in 2004• $3B by 2008 (CAGR 10%)
• Trends• Customers are demanding end-to-end solutions (ie, BPM Suites [BPMS])• Consolidation is in process to move from BPM to BPMS
• IBM acquired Filenet, Bowstreet• BEA acquired Fuego• Metastorm acquired Commercequest• Adobe acquired QLink
• EAI is moving from point-to-point solutions to architected SOA solutions• BPMS is encompassing both human- and system-centric process
management• Blurring functionality between EAI and BPMS
• SOA has become a “must have” requirement for BPMS, including ESB• Focusing on service delivery and re-use
• Process- model development for human-centric BPM is a given• Rule-based BPM is emerging as a “should have” capability• Document repository is becoming a “should have” capability
Source: IBM, 2006, Lombardi Software, 2006, and Forrester, 2006
38
BPM: Market Predictions and Key Assumptions
BPM: Market Predictions and Key Assumptions
• Analyst Predictions• A massive consolidation of the BPM market will take place by 2009 (0.7)-
Gartner
• Through 2010, more than 80% of organizations will improve business process efficiencies by at lest 15% by establishing a strategy for optimum acquisition of Web-Service enabled software and services (0.7)-Gartner
• BPM, ESB, Governance, Registry and EAI are morphing into a new segment known as BPMS-Gartner AppDev Summit, Sept. 2006
• Skyway’s Key Market Assumptions• BPM tools also address the development productivity issue
• BPM may benefit greatly from a modeling tool like Skyway that generates services
• Large ISVs see BPM/SOA runtime as a critical market segment and will protect their share at all costs
• BPM vendors are not focusing on the AppDev segment and have conceded turf largely to Java/Eclipse
39
BPM: Business ProblemsBPM: Business Problems
• Issues• Inability to optimize business performance/results due to non-
standard business processes, tools, and personnel
• Lack of consistent performance
• Poor coordination between functional groups
• Lack of real-time feedback and data
• Limited “what-if” scenario planning
• Difficulty with linking processes and metrics to user documentation
• Poor post-event reporting
• Weak interaction and coordination with IT
40
BPM: Critical Success FactorsBPM: Critical Success Factors
• Consistently execute the optimal process
• Efficient and effective Services creation
• Provide real-time feedback to line managers to support process improvement
• Effective Services methodology and toolset to model/simulate all interaction patterns between staff, systems, and data
• Efficient cross-functional coordination and data management
• Long term IT cost savings
Source: Gartner, 2006 and internal Skyway data
41
BPM: Key Segment ParticipantsBPM: Key Segment Participants
Full capability in current product offering
Partial (or lack of) capability in current product offering
22Pegasystem
Simulation Functions
Analysis Functions
Rule Centric
PM
20
15
21
17
16
9
Total
System Centric
PM
Metastorm
Document Library
Process Registry
Human Centric
PM
Graphical ModelingSolution
Savvion
Lombardi
BEA/Fuego
IBM/Filenet
Skyway
Source: Gartner, 2006 and internal Skyway data
BPM Core Capabilities
42
BPM: SummaryBPM: Summary
• We score much lower than our “peers” in this space• Our Open Application Assembly (OAA) capability is merely a
bridge benefit resulting from the strength of MDSD and PID; we should avoid direct interaction in this space
• We do, however, produce the requisite services for these tools
• Rather than compete directly, we should partner instead• They don’t develop services; we do• Target large cap ISVs• ISVs who lack service development or production capabilities• ISVs who have “committed” to Eclipse• We need to develop supplemental marketing messages
43
Governance Market
44
Governance: Market Predictions and Key Assumptions
Governance: Market Predictions and Key Assumptions
• Analyst Predictions• In 2006, the lack of working governance mechanisms in the midsize-
to-large post-pilot SOA projects will be the most common reason for project failure (0.8 probability)-Gartner
• Many middleware technologies will cease to exist by 2010 such asEAI, ETL, Data Integration, rules engines, and others, due to their inability to move to SOA (0.8 probability)-Gartner
• Skyway’s Key Market Assumptions• SOA runtime will merge with BPM to form a new segment called
BPMS and it will consist of the very large players (BEA, Oracle, IBM, etc)
• The large players consider this space a core area that they need to own
• SOA application development & SOA runtime currently do not speakwith one another presenting a product opportunity for Skyway
• ESB is considered a commodity – large vendors do not consider this product space strategic to them but need to offer a solution
45
Governance: TBDGovernance: TBD
46
Market Analysis Summary
47
Market Analysis SummaryMarket Analysis Summary
• Analyzed SOA market landscape• Evaluated AppDev segment (polarization of pure code and pure model frameworks)• Identified Services trends• Identified BPMS trends – many potential friends and some foes• Considered SOA Run Time player(s) – unknown opportunity here
• Identified market opportunity zones• Identified relevant and potential partnerships• Evaluated real and potential competitors• Characterized our market dependencies
• Determined appropriateness of product positioning messages• Need to create and/or refresh collateral and develop a process to manage and distribute
information to Sales• Must accentuate core capabilities
• Captured emerging trend data to aid with future software releasedecisions
• BPA integration• Eclipse compatibility• .Net adoption• Open source adoption• Service broadcast capability during run time
48
Open Discussion
49
Open DiscussionOpen Discussion
• Market Analysis Recap• AppDev
• BPM
• Governance
• Market Opportunities• Q4 FY06
• FY07
• Product Gap Plans• Build
• Buy
• Partner
• Other
50
Appendix
51
2.00101.6082.00100.2010.20Awareness –Marketing execution
6.80
0.90
1.05
1.25
2.00
Optimal J
Wt AdjScore
34
6
7
5
8
Optimal J
Gross Score
11.25
1.50
1.50
1.50
4.75
IBM Rational
Wt AdjScore
55
10
10
6
19
IBM
Rational Gross Score
1.50100.3020.15Viability - Company Financial Strength
8
14
10.35517.30311.0Total Score
1.3590.3020.15
Sales Execution -Company Sales Effectiveness
2.002.2590.25
Differentiation –Unique Product and Service Positioning
3.504.25170.25
Innovation -Application Development Offering
MSFT
Wt AdjScore
MSFT
Gross Score
Skyway
Wt AdjScore
Skyway
Gross Score
Weight
Segment Success Factors
AppDev
Source: Skyway Management estimates
AppDev: Competitor Array (Page 1 of 2)AppDev: Competitor Array (Page 1 of 2)
Notes:Maximum Offering score is 28; other maximum scores are 10 (each)
Total maximum gross score is 68; total maximum adjusted score is 14.5
52
1.8091.6081.4070.2010.20Awareness –Marketing execution
7.45
1.20
0.90
0.75
3.00
BEA
Wt AdjScore
37
8
6
3
12
BEA Gross Score
7.10
1.05
0.90
0.75
3.00
Sun
Wt AdjScore
35
7
6
3
12
Sun
Gross Score
1.3590.3020.15Viability - Company Financial Strength
3
4
5.65307.30311.0Total Score
0.7550.3020.15
Sales Execution -Company Sales Effectiveness
0.752.2590.25
Differentiation –Unique Product and Service Positioning
1.004.25170.25
Innovation -Application Development Offering
Eclipse
Wt AdjScore
Eclipse
Gross Score
Skyway
Wt AdjScore
Skyway
Gross Score
Weight
Segment Success Factors
AppDev
Source: Skyway Management estimates
AppDev: Competitor Array (Page 2 of 2)AppDev: Competitor Array (Page 2 of 2)
Notes:Maximum Offering score is 28; other maximum scores are 10 (each)
Total maximum gross score is 68; total maximum adjusted score is 14.5