• This is a really good move for IBM as it establishes IBM as the de facto leader in Cloud integration
• This gets IBM some really good mid-sized clients and a mid-sized client-friendly business model
• Cast Iron offers significant value to IBM’s customers by radically simplifying the process of integrating cloud-based apps like SalesForce.com, google docs and a host of others either with eachother or with “non-cloud” apps like SAP.
• The number of different API’s and, indeed, API approaches adopted by different SaaS and Cloud players makes it a real pain to integrate them – Cast Iron makes it possible to link SAP with SalesForce.com in seconds rather than days or weeks
• While this is an excellent addition to IBM’s integration portfolio, it has also added (yet) another way to specify how two applications interact which places the onus on IBM to help customers decide which approach/technology to use

This is a really good move for IBM as it establishes IBM as the de facto leader in Cloud integration

Cast Iron Systems was originally founded as a web-EAI company and has recently repositioned as a cloud integration company. The company offers a combination of middleware, tooling and adapters that allow a range of cloud and non-cloud applications to interconnect.

IBM has been working on addressing the integration challenge presented by the explosive growth in the number (and adoption) of SaaS applications so will have been well aware of the the value that buying all of this technology already built – and pretty widely deployed.

This gets IBM some really good mid-sized clients and a mid-sized client-friendly business model

Looking at Cast Iron’s client list, it’s clear that the company has enjoyed a deal of success in the mid-market – which is the segment that is most actively adopting SaaS in anger, so in acquiring the company IBM is gaining an important foothold in a very important part of the market for SaaS and cloud.

Cast Iron also supports a more mid-sized business-friendly way of doing business (low entry cost, and a range of pricing/charging options that IBM is very likely to replicate elsewhere.

Cast Iron offers significant value to IBM’s customers by radically simplifying the process of integrating cloud-based apps like SalesForce.com, google docs and a host of others either with eachother or with “non-cloud” apps like SAP.

It would be disingenuous to write this announcement of as “IBM Buys some adapters” – but even if it were just that,  the coverage is pretty impressive – with adaptors in place for Salesforce.com,  Oracle CRM On Demand, Google Apps, NetSuite, and others as well as adaptors for  SAP,Oracle EBS,PeopleSoft, JD Edwards and Siebel as well as several others on the non-cloud side of the fence.

The number of different API’s and, indeed, API approaches adopted by different SaaS and Cloud players makes it a real pain to integrate them – Cast Iron makes it possible to link SAP with SalesForce.com in seconds rather than days or weeks

Having waded through the docs for the google API set, Twitter’s, PayPal’s and SugarCRM’s (to name a few), I can tell you with personal experience that it’s a real pain. While all of the API’s are essentially service oriented, they’re all documented differently and all implemented differently. They’re also subject to change. Managing the integration of one of these apps with one that you’ve either developed yourself or that you run on your own systems is “a bit of a pain”, doing it with two is “gnarly” and doing it with more than two starts to become really annoying.

You don’t quite appreciate how much of a pain it is till you see someone demo Cast Iron’s solution to the problem – SAP to SalesForce.com integration was demoed, live, in under five minutes.

Really… it took less than five minutes to have SAP injecting new clients into SalesForce.com. That’s less than 300 seconds!

While this is an excellent addition to IBM’s integration portfolio, it has also added (yet) another way to specify how two applications interact which places the onus on IBM to help customers decide which approach/technology to use

There is a minor caveat – IBM has now got “another” integration technology to offer customers, who are already perhaps a little spoilt for choice when it comes to picking places to drop that integration logic. Unwary clients could find themselves doing really unpleasant and gnarly things by writing custom transformations or business rules within the Cast Iron tooling (which even allows clients to write custom logic in Javascript) . IBM needs to make it clear that the Cast Iron technology is really, really, useful in the context of COTS to Cloud integration but that there may be better places for describing complex business rules and transformations.

This post may be read to the strains of the wonderful Ella Fiztgerald singing “There may be trouble ahead”.

Having slogged through the marathon that was the Oracle-Sun announcement day, we’re left with two immediate impressions:
1.They took a heck of a lot of time to say so little
2.Oracle’s back to the future pitch, while nothing like as badly thought out as some people say, just isn’t going to cut it.

If you’re in a hurry, here are the headlines:

• The back to the 60’s mantra is both more and less nuanced than you might think
• But the integrated stack pitch simply isn’t well enough thought out
• There are two killer reasons why the “single stack” pitch fails: Innovation, and Focus
• Ultimately Oracle’s hardware strategy is simply not convincing enough
• Oracle’s software strategy is much more coherent but Sun brings a mixed bag
• The absence of a services story is the elephant in the room

We’ll be thinking, talking and writing in much more detail about this – so if you’re interested in knowing more, drop me a line – gary@bathwick.com

The back to the 60’s mantra is both more and less nuanced than you might think
Perhaps the most headline grabbing component of the strategy is the notion that Oracle is planning to emulate the IBM of the 1960’s by delivering a highly integrated stack from top to bottom.

Superficially this seems like total nonsense and no doubt the die-hard Oracle knockers will make much of this “backward thinking”. But you have to remember that when Charles Phillips presented the idea he added the caveat “…but built on open standards”. Oracle isn’t advocating a return to the tightly closed proprietary systems of the 60’s; the company is focussing on the “up-side” that came with those integrated systems – improved reliability, better integration, and a single source of support.

The problem with this guiding strategy is that it isn’t anything like as revolutionary as the sound bite might appear. Of course clients want things that are more reliable, offer better performance and deliver better economics (can you imagine anyone saying they want less?). This may be why IBM has been offering tightly integrated hardware and software bundles for a long time, even before it became necessary to describe them as “appliances”.

But the integrated stack pitch simply isn’t well enough thought out
The “integrated from top to bottom” story is superficially appealing, but doesn’t stand up to scrutiny particularly well.

Let’s begin with the “complete systems” chart above. Firstly there is a pretty compelling argument (made by IBM) that there is significant benefit from not having an apps business. IBM argues that customers gain by using a platform that supports the widest possible applications ecosystem – Apps vendors and clients then both gain the best infrastructure expertise and the best industry expertise. When it comes to industry expertise IBM can argue that it offers a breadth of industry expertise that spans a wider range of verticals and runs deeper into the infrastructure than Oracle and Sun’s (with the possible exception of telecoms where Sun really does have deep roots). We were also entertained by Oracle’s characterisation of SAP – they will no doubt be a bit surprised in Walldorf to learn that they don’t have any vertically focussed apps.

Oracle’s primary assertion is that it’s easier to deliver an innovative stack if you own all the components – a point made repeatedly throughout the briefing. In his opening pitch Charles Phillips said this:-

“If you have separate companies at each layer, one company building the DB, another building the storage etc it’s very hard to get those engineers to work together”

He then nodded towards the “big” problem when he said this:

“It’s hard to get those engineers to work together even when they’re in the same company – ask IBM, they know.”

We choked on our collective coffee at this; because IBM does actually know really quite well how challenging it is to get engineers from different groups to work together, because IBM has been doing it for half a century.

In short, Oracle claims that everything will be better in Oracle stack-land because all of the release dates can be synchronised, and integration can be “engineered in ahead of time”. Well, we wish them the best of luck with that; but, saying “we know it’s hard” and even “believing” that it’s hard are a long way from experiencing the challenges associated with coordinating so many different technology life-cycles. All joking aside, as Oracle discovers that this kind of integration really is very hard to do, the company might be well advised to go and ask IBM.

The final point on the ‘total stack’ approach is that some parts of it simply aren’t core to ‘engineering in integration’ – like storage. There’s a reason IBM backed away from manufacturing hard disk drives – If IBM felt that retaining its manufacturing capability would have given it a competitive edge it would have done so. Instead the company sold it, and created a very close partnership with the company that bought it (Hitachi).

There are two killer reasons why the “single stack” pitch fails: Innovation, and Focus
The single stack pitch fails for two key reasons – It doesn’t mean that you can innovate more quickly, and a “focus” on a dozen things nets out as no focus at all.

Innovation first. Oracle is promising to invest $4.3 billion on R&D in 2011 to cover the apps business, middleware, servers, processor design, storage, workstations, and network equipment. By comparison, IBM spent $5.8billion on R&D in 2009, on middleware, servers, processor design, and storage. In other words, IBM is spending $1.5bn more, on fewer things. Oracle won’t be able to invest as much in server design, processor design or middleware development as IBM, either from an overall budget, or a return on investment point of view. IBM’s R&D is already bolstered by partnerships with vendors like Hitachi (hard disks and semiconductors) and Sony (processors) which exist because they deliver far more innovation than IBM (or Hitachi or Sony) could deliver alone.

The further point is that coordinating development to ‘engineer integration in’ means that the whole will generally advance at the speed of the slowest, which will by definition slow innovation down.

Second, the question of focus. Oracle’s acquisition strategy prior to the Sun purchase was absolutely focussed on augmenting Oracle’s already successful applications and middleware businesses. The justification and value creation arguments were clear, and more importantly were focussed on something that Oracle was already very good at. The addition of Sun with its mixture of businesses (and particularly hardware) creates too many areas for Oracle’s senior management to think about – which argues against the ability to focus at all.

Ultimately Oracle’s hardware strategy is simply not convincing enough
While we’re prepared to believe that Oracle will do a better job than Sun did of making their businesses more commercially focussed (although that’s not saying much), we think that at best Oracle will buy a temporary reprieve for the hardware business, rather than preventing a decline that we see as inevitable.

There’s a real danger that Oracle will come to discover, between 12 and 18 months from now, precisely why IBM’s strategy was to walk away from certain elements of the hardware stack and, indeed, why IBM chose not to acquire Sun when it had its chance. In the meantime, IBM (and HP for that matter) will continue to provide a warm welcome to those clients who decide that while the Sun platform isn’t yet “burning”, there’s a distinct whiff of smoke in the air, and they’d rather be on a platform with a clearer more secure future.

One particularly interesting point is that Oracle stated that it’s not all that interested in the X86 market, which implies a level of confidence in Sun’s proprietary processors that the market doesn’t share. Sun cannot ship the volume that is necessary to maintain a viable processor family. A focus on “high value, differentiated products” can easily turn into “unprofitable but expensive niche” unless Oracle can find a way to bankroll the ongoing development of the Sun processor technology similar to the one that IBM found in its deals with the games console suppliers. IBM has shipped tens of millions of processors for games consoles, all of which form part of, and help to fund, the Power family of processors.

Oracle’s software strategy is much more coherent but Sun brings a mixed bag
While Java is the big prize, there are some niche technologies (the identity management technology for example) that add value to Oracle’s software portfolio. Much of Sun’s Java middleware is to be positioned as the reference implementation (which much of it originally was).

Given Oracle’s stewardship of InnoDB we think Oracle will most likely provide a good home for MySQL. But we’re not convinced that technologies like NetBeans are going to enjoy much attention as time goes on.

The absence of a services story is the elephant in the room
For a while now we’ve been characterising this decade as the decade when the power shifts from software to services. In simple terms the 1970’s and 80’s were the decades of hardware, the 90’s and the 00’s the decades of software and we’re now into an era where services holds sway.

It’s a simplistic characterisation of an industry that’s too complex to be defined in such a pat way, but it was interesting to hear the word “solutions” used over and over again by Oracle – as so many others have for the past 20 years – just as vendors like IBM are beginning to talk about “business outcomes”.

Yes, Oracle will be able to find customers that want to buy hardware, and even “solutions”, but the real money, particularly in the high end of the market, increasingly lies in the ability to help customers deliver business outcomes.

This is why, even before Oracle started talking about a return to the 60’s, we felt that the acquisition of a hardware company was basically a retrograde step, and that Oracle’s long term success would have been better served if the company had bought a services organisation. Of course, there’s still plenty of time for Oracle to do that. Watch this space.

Check out detailed information here

Now, I freely admit that I’m an iPhone fan – it’s a rocking phone, wrapped in a business model that is rocking too (for now at least).

But, Canalys seems a little “down” on Droid -

Rather than eating into RIM and Apple’s integrated platform sales, Android appears largely to have cannibalized the use of other free Linux minority platforms and taken the lunch away from Microsoft’s Windows Mobile.

(Pete Cunningham – Canalys)

I think that Pete may well have a point right now – but I expect droid-based phones to put up an increasingly strong showing as time passes. It wont be as quick as supporters of Android like but the ecosystem is still in its very early days.

My wild stab in the dark (and I mean wild stab in the dark) for the next 12 months…

• The number of droid-based phones will grow in number to create the real potential for a world-beathing ecosystem – Provided that droid phone makers don’t rush off in too many directions
• If Apple can negotiate data roaming deals with the leading global mo-telcos then RIM is going to be in big big danger
• Apple needs to be ready to adapt the closed-garden a) for the enterprise and b) for non-commercial apps
• WinMo and Symbian are going to see their share of the market halve.

In Richard’s post he mentions that it seems that Michael Jackson (former Chairman of Sage) had made an offer for the Kashflow business of £1m, which was rejected by Kashflow’s founder Duane Jackson.

According to Richard, Jackson made the offer with a view to using the Kashflow product to act as the “heart” of a new SaaS venture he was planning.

Well done Duane for saying no to the £1m for 100%… If I were him I wouldn’t give the company up at this point in time, but I’d be very keen to find a way to sell Michael Jackson some kind of stake since he’d made a very city-friendly supporter and has a wealth of experience that money cannot buy.

I’m only posting this, because it reminded me of a conversation I’ve had several times with Holway – I’ve always been critical of what I perceive to be a deep lack of innovation at Sage, and have given Richard a hard time in the past over his positive opinion of the company. Richard only needs to point to the company’s long-term financial performance to justify his view of course, but I believe that Sage will be dead in 5 years unless it can develop a completely new platform around SaaS – which is something you don’t do by buying lots of companies and cobbling them together.

Sage could actually be behind Kashflow in terms of its ability to deliver a user (and accountant) friendly product that is delivered as a service.

Yes, SMB take-up of SaaS has been tentative – but there’s now doubt that the technical, legal and emotional barriers are falling away, and there is absolutely no guarantee that the biggest share of the market will belong to today’s incumbants.

Sage needs to invent Sage 2.0… and learn from some of the minnows that are emerging.

On a personal note, I can’t tell you how delighted and excited I am. Katy is an amazing person to work with – and I’m over the moon.

Here’s the press release:

Bathwick Group Press Release:

For Immediate Release

5.6.2008

Dr. Katy Ring joins The Bathwick Group

Dr. Katy Ring has joined the Bathwick Group as a Principal analyst in the IT Services field. Highly regarded internationally as an analyst with insightful and challenging views on the development of the IT services market, Dr Ring will be responsible primarily for developing Bathwick’s new Global IT Services research programme, due for launch in Q4 2008.
Jonathan Steel, CEO at The Bathwick Group, said “I am delighted to welcome someone of Katy’s calibre to Bathwick; her experience and ability adds a sharp edge to Bathwick’s IT Services research and consulting business.”
Latterly with NelsonHall, Dr. Ring spent 12 years at Ovum leading research into the opportunities for emerging software and services markets as well as developing the company’s Outsourcing Practice. Prior to her tenure as a Principal analyst and Practice Leader at Ovum, Katy was a journalist with publications such as Computer Weekly and Computergram, and was founding editor of Software Futures.
Commenting on her appointment at Bathwick, Dr Ring said, “It is refreshing to join a research organization committed to developing research that is both commercially relevant and intellectually engaging. The Bathwick Group has the operational agility, professionalism and cultural audacity to enable its researchers to think differently. I am very excited by the opportunity to build a Global IT Services programme here.”

Dr Ring holds two degrees: an Honours degree in politics, philosophy and history from the London School of Economics and a PhD in the popularisation of science from the University of Kent at Canterbury.

Sun has acquired MySQL AB the Swedish software company behind the eponymous (well without the “AB”) open source database. for what the press release describes as “approximately$1 billion”.

This move is of real interest to me since I’m currently writing a “MySQL and VB.NET” how to guide (see my development blog for the first installment).

I think that on balance this is good news. Of course there are caveats – Sun has a mixed record when it comes to acquisitions – but provided that they keep faith with the user base (and I think that they will) and can keep a few of the key MySQL engineers (and I think that they can) MySQL will continue to prosper.

There are couple of other “wrinkles” two key database vendors own bits of technology that are pretty “core” to MySQL; Oracle owns InnoDB (one of the core database engines that MySQL uses), and IBM owns Solid (another storage engine). But both Oracle and IBM should be smart enough to know “not to go there” when it comes to horsing with something as popular with the community as MySQL.

Some people have asked me whether this makes MySQL a “contender” – in other words should Oracle and IBM be scared by the threat that MySQL poses to their databases? My answer is that MySQL was already a “contender” in many respects – Sure, banks haven’t flocked to use MySQL as the data store for their core systems – but gazillions of web-sites and “Web Two-do-Oh” businesses are built on MySQL.

Where it comes to existing applications, and the data that resides in them, people don’t just “swap out” one database for another – As a general rule, databases only get switched off when the apps that use them get switched off – And here’s the long-term “gotcha” for the existing DB vendors – As new applications emerge MySQL will increasingly be the database that runs them. Whether it’s SugarCRM, dotProject or WordPress… the next generation of CRM, Collaboration, and publishing applications all (more or less) use MySQL.

Some of my colleagues are still sniffy about MySQL – one past colleague even refused to call it a “Database” – insisting on referring to it as a “data-store” – And, indeed, I would have said the same right up until the end of 2005 when version 5.1 was released (which added vastly improved support for transactions, along with cursors, stored procedures, triggers and views).

MySQL is out there – in production. It sits behind millions of websites (including mine), and it’s increasingly finding itself used as the data store for custom and ISV applications.

I’m developing a client-server application for a client, they’re an all windows shop, and the client will be written in VB.NET (so that they can maintain it themselves) and I’ve chosen to use MySQL rather than add to my client’s cost by licensing SQLServer or another database.

Wouldn’t it be cool if Sun were to capitalise on this – Add a few simple API’s to make it easy for a third party application to administer a MySQL database (not that it’s that hard to do today) but with a small investment on embeddability – MySQL could be even more attractive to ISV’s.

Another commonly asked question relates to MySQL’s scalability. MySQL’s scalability isn’t really in doubt – it’s sitting behind some massive applications already – and the work on improving the performance of the different core “engines” that you can choose continues.

So.. MySQL’s adoption will grow, surely and steadily – and in a couple of years from now, some of the bigger database vendors will notice some eating away at the edges of their market share – Their choice will be to carry on competing in a market that will be essentially commodtised, or to carry on adding value over and above the core database – IBM didn’t buy Cognos for $5bn just for laughs, let’s face it.

DB2 and Oracle will retain their blue chip client-base – residing at the top of the market in terms of scale and complexity – They’ll just begin to notice that the number of “little apps” that are deployed on their technology will first stop growing as quickly as it once did and will then begin to slow.

The biggest potential loser, I reckon, is Microsoft’s SQLServer – SQLServer is a tremendously sophisticated, scalable and fast database and for 99.99% of applications it’s every bit as good as DB2 and Oracle… but Microsoft hasn’t been able to get past the “toy database” stigma – which is really very very unfair – and now there’s a free database that can also cater for the vast majority of applications – MySQL.

This is the key point – So what if MySQL can’t, yet, scale to a gazillion writes/second… the number of applications that require that kind of scale is so low that it can almost be written off as a statistical error. Steve O’Grady at Redmonk blogged on this topic this morning and produced a quote that I’ve never heard before – Apparently someone at Oracle once said “MySQL is a Toyota Corolla to our 747″ in order to disparage MySQL… what an utterly stupid thing to say – As Steve points out – there are many many more Corollas kicking about than there are 747’s and very very few of us would choose a 747 to nip down to the shops or to deliver goods to our clients – And just as the corner shop is far more likely to choose a Corolla over a 747 for the delivery – it seems that the budding e-commerce and social networking sites are choosing MySQL’s Corolla over Oracle’s 747 to build their businesses on.