More consolidation is expected in the application server market after IBM’s takeover of CrossWorlds.
As companies become more insistent on clear ROI metrics for IT projects, the projects most likely to go ahead are those that use current resources to boost revenues. This factor has driven the continued strength of the market for software that supports vertical-specific business-process integration requirements, despite the downturn.
CrossWorlds was an attractive target for IBM because of its expertise in the development of such software, based on open standards such as J2EE and XML, to enable business processes automation for multiple application integration (for CRM, SCM and ERP systems). It strengthens IBM’s already extensive portfolio of solutions that combine application server with integration software. The tech giant hopes to gain end-user mindshare at the expense of market leader BEA.
IBM’s move highlights enterprises’ insistence on software to manage high-volume transactions and integrate business processes. The trend towards disparate infrastructures and increased collaboration with business partners or clients has placed a high premium on integration and network robustness.
Consolidation of the integration software and J2EE application server markets looks set to continue as companies look to develop end-to-end solutions (as well as taking advantage of low share prices). If IBM manages to chip away at BEA’s lead, the smaller firm is highly likely to respond by partnering with or acquiring an integrator. Other integration software vendors will also look to strengthen their positions by developing solutions that compete with IBM and BEA.
At the same time, it’s clear that vendors need to develop end-to-end solutions and convince users of their technological expertise and vertical-specific knowledge. This will prove particularly important when IT budgets rise as the economy picks up, as firms are sure to want scalable solutions that complement the step-by-step roll out of their eBusiness applications.
All this points to a better future for end-users. The development of solutions based on open standards such as J2EE and XML will allow customers to worry less about integration capabilities and leave them to focus on their businesses.
