2011 market predictions for infrastructure software


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Lustratus produces an annual set of predictions for the infrastructure software marketplace. These predictions are qualitative rather than quantitative, outlining what Lustratus sees as the most important trends and likely focus areas for the market over the coming twleve months.

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2011 market predictions for infrastructure software

  1. 1. insight™2011 Market Predictions forInfrastructure SoftwareA new year means a new look ahead from Lustratus to the world of infrastructuresoftware and related hardware. 2010 saw a significant upswing in IT expenditureas the credit crunch restrictions started to lift, and Lustratus sees this carryingon through 2011, although confidence is still not back to pre-recession levels.Lustratus predictions for 2011 are:Lustratus predictions for 2011• Business rules will continue to increase in popularity• Cloud computing projects will pause for thought• SOA adoption will continue although with a lower profile• The market for open source integration tools will return to growth• Appliances will see strong growth, particularly for integration needsBefore going into the 2010 predictions in more detail, it has become traditionalfor Lustratus to score itself on its predictive powers for the closing year.Lustratus 2010 forecast performanceRecapping, the Lustratus forecasts for 2010 were• Business alignment and control (BPM, BRMS, Events) will continue to grow• Internal and Office Clouds will grow in acceptance• Security will be a growing area, particularly as Cloud picks up• Integration makes a comeback• Software patent suits will surgeOnce again, looking at how 2010 ended up, the Lustratus predictions appear tohave been pretty accurate. The first prediction was spot on, with the overall BPMmarket growing at anywhere between 15-25% depending on the market definition.The big news was probably IBM acquiring Lombardi, which has strengthened itshand, but Oracle, Software AG, Pegasystems and a host of smaller, boutiqueBPM companies also saw strong growth.The Cloud situation was a little more chequered. The level of interest in CloudComputing has remained high all year, and as predicted almost all of the attention(at least within larger companies) has been on internal clouds or on desktop oroffice-based Clouds where cloud facilities are used to store or archive desktopinformation and applications. But this is a little way from the Lustratus prediction of‘acceptance’, since the number of projects that have been implemented in thisarea remains low.The security prediction was a bit of a ‘gimme’. Security has never dropped inimportance, although it has definitely been true that concerns over security inWhile the information is based on best available resources, Lustratus Research Ltd disclaims all warranties as to the accuracy, complete-ness or adequacy of such information. Lustratus Research Ltd shall have no liability for errors, omissions or in adequacies in the informa-tion contained herein or for interpretations thereof. Opinions reflect judgment at the time and are subject to change. All trademarks ap-pearing in this report are trademarks of their respective owners.
  2. 2. insight™the Cloud Computing area has definitely held back projects. The most positiveaspect supporting the fulfillment of this prediction has been the rapidly growinginterest in appliance-based ‘cloud gateways’ where the appliance can managesecurity to and from the cloud. So in summary, this prediction was probablyaccurate enough, but was really a rather obvious one.Integration definitely made a comeback in 2010, although in truth Lustratus What are businessbelieves it never really went away. However, 2010 saw a lot of attention being rules?given to issues like how to link enterprise and cloud resources together, andhow to integrate different parts of business processes more effectively with each In IT terms, business rules are simple non-technicalother. Interestingly, there are also reports of strong demand for modernized file expressions of the rules thattransfer solutions. This may surprise some, who may feel that file transfer is so govern operational process-old that it died years ago, but the fact is that many companies still use a consid- ing.erable amount of file transfer to integrate operations, and more modern filetransfer approaches with better management/scheduling/security/performance The idea behind a businesshave proved attractive. rules solution is that business users should be able to de-Finally, there were indeed some very high profile software patent trials in 2010, fine and modify these rules,settling for multi-millions of dollars in a number of cases. Perhaps the most dynamically changing theexciting was the i4i case against Microsoft, which resulted at one point in way the IT system operates without any programming.Microsoft being ordered to stop shipments of Word. The much-touted patentsuit of Juxtacomm vs just about every software company in the world over dataexchange turned into a bit of a damp squib though, with minimal settlementsfrom companies such as IBM, Microsoft and Informatica. Although a secondround of suits have been put in place, since IBM in particular makes billions fromdata integration it seems unlikely that any of the ‘second-string’ firms will settlefor much. Importantly, however, the US may finally be slamming down theshutters on the so-called ‘patent trolls’ that have been driving a lot of the legalactivity. As part of its appeal against the $200M+ award to i4i, Microsoft hasbanded together with a range of software companies to take the issue to theSupreme Court, and at the end of 2010 the Supreme Court agreed to hear theappeal. This suggests that shooting down patents will be made much easier,particularly when it is obvious to all that the patent should never have beenawarded anyway.In summary, Lustratus hit the mark in all of its predictions, although to be fairthe Cloud Computing marketplace has not advanced to the extent Lustratusexpected.Lustratus 2011 predictionsBusiness rules will continue to increase in popularityTo some extent, this forecast continues on from the 2010 forecast on the growth ofthe whole BPM/Events/Business Rules market. However, the reason for zeroing inon Business Rules within this sector is that the attraction of business rules is be-coming clearer to executives responsible for funding IT projects. Specifically, thetwo key benefit areas are emerging as business agility and compliance. Lustratushas been tipping business process management (BPM) for a number of years, andthis will still be a strong area, but the attraction of business rules is that it may notbe necessary to get all processes into a BPM model to gain advantages. Business
  3. 3. insight™rules can be set up specifically for the key areas of business control, and these rulescan be gathered together in a simple, readable set of controls for the business. It istherefore easy for business users to adjust these rules to handle new requirements,but it also provides an ideal summary of business compliance to regulatory or cor-porate requirements.A couple of examples might help. A supplier might want to put in place a loyalty What is Cloud?program that assigns a discount level to a customer based on volume. A business Cloud Computing is a utilityrule would read something like “If customer volume > 1M units, then add 10% to -based model of operationsthe discount”. Now, if the management team decide they need to put more incentive where users can call upin place for the first quarter it is simple to change this rule to specify 15% as the resources from a sharedearned discount, and then change it back after the first quarter. pool as needed, in a self- service fashion and with aAlternatively, a manufacturer may be required through regulations to spread risk by usage-based accountingensuring that no supplier controls more than 20% of the supply for any one part. A model.business rule could be set to say something like “If purchase order to this supplier Resources could be ITtakes overall volume beyond 20%, reject the PO”. It is now a simple matter for a infrastructure, an applicationcompliance officer to check this rule periodically to ensure that regulations are environment or even a pre-being properly applied. packaged application. These resources may resideOne reason business rules are suddenly becoming a much more active area is that internally, externally or both.the vendors providing business rules engines such as IBM, Oracle, Software AG,SAP, TIBCO and Pegasystems are doing a much better job of supporting the useof legacy applications and code as part of business rules. This usually involveswrapping the legacy code up so that its functionality can take its place in the rele-vant rules, but this enables a lot more companies to look at applying business rulesto their current IT implementations.Cloud Computing projects will pause for thoughtAs Lustratus tipped last year, 2010 was a year in which a lot was written andspoken about Cloud Computing. Hundreds of vendors jumped into the emergingCloud market, all claiming that Cloud Computing was going to totally change theface of modern IT. Many companies found themselves looking at Cloud andwondering whether they should be getting involved.However, as the year went by, user companies began to realize some importantissues around Cloud. The first was that while an internal cloud that remainedwithin the corporate boundary might take virtualization a little further, externalclouds brought with them a whole load of uncertainties. Security is clearly aworry for many, with the thought of putting corporate data outside the firewallbeing anathema to many senior executives. There was also a lot of churn in theCloud marketplace in 2010, with a number of cloud suppliers going bust.But perhaps most importantly, many companies have started to realize that de-spite what the hype might claim, the Cloud Computing model does not suit alltypes of applications. While it might be a very attractive option for projects likevirtualizing a swathe of vanilla Microsoft Office laptops into a cloud-based model,where the applications and data can live in the Cloud, running business applica-tions in an external cloud creates a whole host of problems.
  4. 4. insight™Numerous factors need to be taken into account, like how often an applicationneeds to consult corporate databases, what type of operating environment itrequires, whether it is handling sensitive information, what the local regulationsrequire in terms of location of data and many others. As a result, Lustratus pre-dicts that 2011 will be a year of pause. After an initial surge of excitement,companies are going to step back and give the whole Cloud Computing modelmore thought. Research will be needed to look at workload candidates for What is SOA?Cloud, analysing what the applications do, what resources they need and what SOA is a model of opera-sort of performance, availability, reliability and security they need. tions where programs are delivered as businessSOA adoption will continue, although with a lower profile services to deliver specific pieces of business function-During 2010 there was little spoken about service-oriented architecture (SOA). This ality.had been very much in the fore of market chat for a number of years, but in 2010 itwas displaced by discussions about BPM and Cloud. So does this mean SOA is These services can benow out of favour? accessed from anywhere in the network, and can beIn fact, the lack of chat around SOA is really just a symptom that the service- combined and recombinedoriented concept has matured to the point that many companies just assume that to deliver different business functionality quickly andit is a best practice and therefore it needs little further discussion. Admittedly, many easily.companies are being somewhat selective about their SOA adoption, perhaps de-ciding to make do with an ESB and web services and not taking on the full-scaleSOA architectural revamp. But the SOA concepts are now firmly embedded in theIT psyche. It must also be remembered that SOA concepts are a fore-runner totechnologies like BPM, Rules and even to some extent cloud-based applications.Anywhere that business integration is required, SOA will be there or thereabouts.The market for Open Source integration tools will return to growthBack at the start of 2009, when the credit crunch was at its worst, Lustratuspredicted that Open Source projects would enter a level of hiatus. The reason-ing was that at a time when everyone was trying to reduce people costs, theidea of taking on Open Source offerings which by definition tend to need‘putting together’ was suddenly highly unpopular.However the situation has been steadily improving over the last 12 months, to thepoint where Lustratus believes companies are once more prepared to considerOpen Source offerings as a way to save costs. Normally the popular areas forOpen Source tend to lag the hype curve, and the integration tools area is agreat example of a more mature area where Open Source has a real chance ofmaking inroads. All companies still need to handle integration needs, but thetechnological maturity in this area makes it ideal for delivering a commoditized,open source version of the tooling. Companies like Talend, MuleSource, JBOSSand FuseSource have established offerings, and with VMWare’s backing Spring-Source could become another contender.Of course, mature technology in itself is not enough to drive an open sourcemarket segment. A major inhibitor to open source is the perceived risk that theadopter is taking on. What about support? What about new requirements? Butin the integration tools space there are already many companies either supplyingopen source offerings or providing support and implementation help aroundthem. Open source will never replace the large-scale integration vendors and
  5. 5. insight™projects, but the presence of such commercially-based activity helps to makethe overall market fertile for open source initiatives. Having plenty of knowledge,experience and best practices already available around the technology helps tomake the open source approach viable and mitigates the risk.Appliances will see strong growth, particularly for integration needsThe recession at the end of the last decade has had some lasting effects on the What are appli-IT landscape, and one that is not going to go away any time soon is the desire ances?to simplify. IT infrastructures have got increasingly complicated as they have Appliances are dedicatedspread and become more inter-connected, and this drives up skills and people servers designed to handlecosts to support, maintain and enhance the infrastructure. But the recession specific functional chal-brought a high level of focus onto these costs, and companies are continuing lenges. They are usually pre-this focus even though most economies have more or less returned to growth. loaded, only requiring con-Integration has continued to become more and more prevalent as companies figuration on installation.look to streamline and automate processes across the value chain, but integration Appliances are delivered in aplaces considerable demand on the underlying infrastructure and contributes self-contained hardware formsignificantly to the level of complexity. factor, delivering hardened security and hardware-basedOne response to this need for infrastructure simplification is the appliance performance assistance.model— package up some of the infrastructure functionality in a pre-packagedbox and just connect it up. This offers a level of standardization and uniformityacross the enterprise while at the same time delivering a solution with a strongsecurity profile. Within a network of integrated systems, for example, an appli-ance may make a lot of sense as a gateway between different domains. Cloudcomputing offers another obvious scenario for a secure and robust gatewayfrom the enterprise network into the Cloud.But it is really the simplicity that is driving the appliance market. Not only doappliances offer pre-built solutions, but by their nature they are pretty tamper-proof, and offer only very limited opportunities for modification. Often, applianceshave a proprietary operating system environment that does not allow program-mers access to the functionality, with configuration options being the only level ofcustomization offered. This helps to maintain uniformity and reduces the need forsupport staff.
  6. 6. SummaryEconomies have started the long path to recovery in 2010, and although 2011may still be quite a rocky ride, the path is likely to continue to be in an upwarddirection. However the days when companies will leap into uncharted waters inthe hope of gaining some sort of advantage are all but gone, at least for themoment. Instead there is a much more pragmatic air around IT projects andpurchases.The focus on tying IT projects to specific and detailed business aims will continue,driving interest in areas such as Business Process Management (BPM) andBusiness Rules. Rules in particular provide a quick and easy way for businessesto become more agile and to seize more control. But focus will also continue onways to integrate different parts of the business and the value chain more closely,to squeeze savings out of IT operations and to reach higher levels of processefficiency and effectiveness. Service-oriented architecture will continue to have alot to offer in this area.But the pragmatic focus will also cause people to need to be really sure beforeembarking on a potentially costly new project. Perhaps the clearest example ofthis is likely to be Cloud Computing. While everyone is talking about it, andmany people really like the idea of ‘utility computing’ where a company onlypays for what it uses, businesses are not just going to blindly rush into it justbecause vendors or market ‘experts’ say it is the right thing to do. After theinitial furore around Cloud Computing in 2010, 2011 is likely to be a year ofmore sober reflection as some of the issues such as security and selecting theright workloads for cloud rear their heads.Having said that, as more technology areas reach the required level of com-moditization, open source is liable to return to the agenda. After the hiatus of2010, when companies did not have the people to spare to assemble opensource-based solutions, companies are likely to drift back to the attractions ofreplacing commodity software products with open source ones. Integration isone such area which is likely to see increased activity, with the technology ...insight 2011 will be the year of ’simplify, simplify, simplify’ in the IT space. Business users look for simple rules to control operations, companies strive to simplify and streamline processes through better integration and appliances offer a new approach to significantly reducing infrastructure complexity and costs. The companies that succeed will be those who can see past the media hype, and focus in on pragmatic measures to make things simpler.reaching a bit of a plateau after 15-20 years of major advances.But finally, the buzzword in IT organizations for 2011 is going to be‘simplification’. Complexity has reached the point where itjust costs too much and inhibits movement. The emergence © 2011—Lustratus Research Ltd. Customers who have purchased this report individu-of commercially viable appliances could not have been ally or as part of a general access agreement, can freely copy and print this document for their internal use. Customers can also excerpt material from this document provided thattimed better. They offer an easy, reliable and secure means they label the document as Proprietary and Confidential and add the following notice into significantly reduce complexity and free up resources and the document: “Copyright © 2011 Lustratus Research. Used with the permission of the copyright holder”. Additional reproduction of this publication in any form without priormoney. written permission is forbidden. For information on reproduction rights and allowed usage, email info@lustratus.com. Ref SC/LI/26762369/V1Lustratus Research LimitedSt David’s. 5 Elsfield Way, Oxford OX2 8EW, UK. Tel: +44 (0)1865 559040. www.lustratus.com