By William Fellows
SmartDB is looking to take some of the technobabble out of EAI enterprise application integration and is offering BluePrints for Oracle and PeopleSoft to enable developers to interface application knowledge and documentation and link Oracle or PeopleSoft applications without writing code. New interface accelerators read metadata and automatically generate templates which can be used by SmartDB’s EAI suite now renamed Interfacing Studio to better reflect what the software does. The accelerators work with PeopleSoft and Microsoft SQL initially, with support for Oracle and other packaged applications to follow. Integrating applications doesn’t require rocket science, says CEO Frank Florence, echoing the sentiments of other EAI vendors such as Vitria Technology.
Version 5.0 of the software, formerly known as Workbench, enables developers to create templates for passing data between different applications. What SmartDB calls templates would be called adapters or connectors by other EAI vendors. It uses an in-memory database and a Corba infrastructure internally, NT for the front end and Unix or NT at the back end, but is agnostic about the client or host transport environment. A four developer license starts at $50,000. The Integration server is $25,000, accelerators are $10,000 each and blueprints $3,000 to $10,000 per entity.
Florence believes that EAI vendors will move on from supporting ERP to extended ERP, including customer relationship management and other front office applications, and then on to electronic commerce. SmartDB is beginning to address the extended ERP market and says it will have a footprint in e-commerce by year-end.
It claims 310 customers and claims revenue will grow 48% this year. If that’s somewhat less than in previous years that’s because we ride the curve of ERP, explains Florence. Average deal size is $50,000 to $70,000 and it’s doing more consulting these days. SmartDB has raised $6m funding in seven years. It expects to seek a second round of funding this year. It does not foresee an IPO until after the next major release of its software which is expected by year-end.
Florence says SmartDB does not compete with Active Software or Vitria Technology because it performs finer grain interfacing at the transaction level. It says that other vendors’ interface applications are at a much higher level and do not capture all business processes.
Florence notes that although Active and Vitria are heading to the market, both of their red herrings list e-business as their key opportunity when a few months ago e-business was not on the EAI community’s radar. And if the enterprise opportunity is so big, as market researchers keep suggesting, then why are they both touting their e-business credentials, he wonders.
Florence believes that the EAI industry is waiting tables as far as the e-commerce opportunity is concerned and that it will accelerate even faster once Y2K issues are resolved. Moreover, however the market is sliced and diced and it’s still hard getting beyond the stovepipe model. TSI has a unique SAP view, Neon has finance and STC has most of its eggs in the healthcare basket and Vitria is targeting telecoms. 90% of all interfaces built today are still periodic, Florence notes. While integrators and the bigger players like BEA, Oracle and IBM will become increasingly influential in the market, there will be a large battle fought over front-office and back-office territory. Florence believes the front office will win. Integrators are scrambling to add front office expertise or get left behind as a legacy, back-end shop.
Florence notes that while tectonic plates are shifting – witness Neon’s implosion – it is still the very early days of the EAI market, and it exhibits the same characteristics as any other emerging technology. In 1997 and 1998 some $250m of venture funding and capital flowed in while in 1999 less than $25m has so far been poured in. Seven start-ups did $80m in sales in 1999 and as a group lost $95m having a combined total capital of $175m. The hype is wearing off, reality is setting in, says Florence, and users are confused. Hand-coded solutions still outstrip product license sales; integration products are mostly first generation in any case, he says, predicting that by the end of this year half of the 25 EAI start-ups will be gone or absorbed. While the market opportunity is large – enterprises have an average of 49 applications – Florence believes that vendors will need to offer users a better understanding of the potential return on investment using EAI. He thinks e-commerce will be a key driver and that no one integration solution will fit all sizes.
