By William Fellows
Jim Demetriades, CEO of Software Technologies Corp, plans to take his enterprise application integration outfit public within 12 months. STC, which is heir apparent to a large slice of the EAI market – Demetriades claims that STC owns 60% of it – expects to do between $40m and $50m revenue this year, mostly in the healthcare sector where the company has its roots. However it is moving quickly to other markets and claims that its non- healthcare revenues were up 450% to $9.6m in 1998 out of total revenues of $36.5m. It says it sees revenues of between $30m and $40m in verticals, and already has some heavyweight support. Oracle is plumbing its Applications suite with STC’s DataGate integration software and Ray Lane sits on STC’s board. PeopleSoft is using DataGate to link its applications to SAP, Hewlett- Packard is using DataGate internally and Andersen Consulting is selling STC’s work to all of its clients. Andersen chose STC for its EAI requirement after an exhaustive comparison of 17 EAI players. STC said Andersen found more 250 companies claiming to offer EAI, of which 15 are real and just five have any market presence. Demetriades’ claim to be ahead of the EAI pack is backed with some interesting numbers. He says STC has 1,200 sites and a commercial base of some 35 to 40 verticals. He estimates Wall Street darling New Era of Networks Inc has a commercial base of around 200; Active Software Inc 30; Crossworlds Software Inc and Tibco Software Inc 25 each; Vitria Technology Inc six or seven and Extricity Software Inc just one production site. Demetriades expects STC to pick up 200 to 300 new accounts over the next 12 months which should help plump it up for an IPO. It won 16 new accounts last quarter and will pick up at least 25 this quarter. It has been little heard of until recently as Monrovia, California-based STC, which has 360 employees, only picked up a dedicated marketing team last summer. As Demetriades likes to observe, STC has many more staff working on R&D than a competitor like Vitria has in its entire company.
It works
The business of linking applications is difficult, but Demetriades says STC’s DataGate can use any relational database as its queue, connect any message to any message and support 2,000 simultaneous connections. It has built 20,000 interfaces. STC’s value proposition, he says, its it works. Typically 40% of the services cost of implementing an ERP system is writing interfaces. Services are typically 10 times the cost of the software. The attraction of EAI is that typical businesses should be able to realize a 1%-2% cost saving. In the competitive world, this is a huge amount, Demetriades says. While EAI is hard, but not rocket science. Demetriades claims 60% to 70% of STC’s installed base was configured by others and STC and its partners have already connected 300 applications just in the healthcare market. He says healthcare so important because hospitals have traditionally bought a lot of software but their average IT budgets – between $8m and $15m – do not offer a lot of room for integration. This spawned a demand for third party integration of software to link hospitals’ once disparate patient care systems. The healthcare industry now has over 2000 sites that have EAI technology installed, which is ten times bigger than the next vertical industry. The next big opportunity for EAI is web-enabled e-commerce, Demetriades says. In the near term, the company plans to focus on delivering pre-packaged integration components to support internet, LANs and WANs; packaged applications; databases; middleware and legacy systems. A third generation of its DataGate suite codenamed Montana and due imminently will handle up to 4,000 message per second with any number of processes within a distributed framework. It will offer peer-to-peer services, more APIs, dynamic configurability; queuing and transport independence and improved GUI and management tools.
