Once upon a time, the IT industry had systems integrators - techies who knew how to make software from different developers work together on the same system. They were often considered the lifeblood of a business's network.
Over time, the term "systems integration" all but disappeared, having morphed, as part of the industry's constant need for new acronyms, into EAI or enterprise application integration.
But, no matter how you say it, it still means the same thing - it's the process of integrating multiple applications that were independently developed, may use incompatible technology and remain independently managed.
EAI involves consolidating and coordinating computer applications in an enterprise. That may require developing a new total view of an enterprise's business and its applications, seeing how existing applications fit into the new view, then devising ways to efficiently reuse what already exists while adding new applications and data.
During the late 90s, it took on a whole new life form and was taken over by big consultancies and the major software companies, which offered "all-in-one" solutions that were often unwieldy, sometimes ineffective and usually expensive.
According to IDC, the enterprise integration software (EIS) market grew by a massive 88 per cent from 1999 to 2000. Whilst growth rates are expected to slow over the next five years due to economic conditions, IDC says the market will continue to outpace the overall software industry through to 2005, with a compound annual growth rate of 43.9 per cent.
Gartner also expects continued strong growth and forecasts that the worldwide application integration, middleware and portal markets will grow from $US5.1 billion in 2001 to $US10.5 billion by 2006.
Like IDC, Gartner analysts believe the need to integrate enterprise applications, both inside the firewall and with trading partners via the Internet, will drive deployments. Integration technology can also help companies control costs and streamline business processes, the consultancy says.
This global growth has been mirrored in Australia, where companies like SeeBeyond and TurnAround Solutions are reporting strong growth, despite the tech wreck and September 11. SeeBeyond's Australian managing director, Des Powell, says the company now has 65 installations active in the Asia-Pacific region, with the large majority of these based in Australia.
While SeeBeyond is one of the larger integrators, TurnAround Solutions is a prime example of the trend back to the specialist systems integrator. The company has about 60 staff, 20 of which have been employed Australia-wide in the past 12 months. According to CEO Stephen Williams, despite the company's US business halving following September 11, there has been strong growth in the Australian market and the demand for specialist integrators has been steadily on the rise.
"Big companies like some of the telcos are finding they do not know how much they are owed until the end of the month and they might have 20 or 30 different applications throughout their organisation to tell them, so they want to integrate their many applications.
"SIs are technology and product agnostic, so they're not pushing a particular solution. Often they employ staff from larger organisations, consultancies and outsourcing companies who bring with them a wealth of expertise and knowledge. IT buyers are starting to recognise the need for core competencies, particularly in key areas such as data warehousing, security and application development, and that makes the specialist systems integrator attractive."
Williams says there are opportunities for SIs in internal Web services and areas such as data warehousing. "We don't see anything for us in CRM. That's an area that is owned by a select few and to do CRM you really need critical mass," he says.
Meta Group's program director for server infrastructure strategies, Dr Kevin McIsaac, says the vendors most likely to succeed in the EAI space will be those that offer not only a complete set of middleware, but that can back it up with expert design and implementation services.
"EAI is a complex area, requiring a high degree of expertise and experience. The successful long-term players will either have the skills themselves to help customers implement their technology, or will have a very good partner network to provide that capability on their behalf. They will also need to be of a sufficient size and depth to afford the substantial investment required to build themselves into this space."
But PeopleSoft Asia Pacific's director of industry and product marketing, Ray Kloss, disagrees. "We are seeing a real resurgence of the smaller systems integrator. What we are finding is a couple of trends across customers. The first is an expression that big is bad. In the late 90s, it was in vogue to do "the big project". Just about every major Australian company at the time did a million-dollar or multimillion-dollar project which involved trying to rearchitect a back-office application for their environment.
"Many of them needed to get it done and a lot were successful, but they really fatigued some organisations. So what you see now is organisations trying to find point solutions that fix the immediate problems and can be implemented within a planning period that actually has an impact on the business before the next internal organisational change.
"The Australian marketplace has become really pragmatic and wants to see some real value, some grey hairs in the consultants doing the work and the solutions to be very targeted around niche activities that drive some value," he adds.
However, Kloss warns that analyst predictions of a boom in Web services may be premature. "There's a difference between what analysts talk about and what customers are actually doing. People are asking about Web services and the Web serviceability of our product so we have to have it, but we don't see people implementing it yet."
However, Fujitsu Australia's general manager, marketing, Terry Carter, says strong growth in the EAI market is being fuelled by the push to compete online, along with the need to integrate disparate databases, or to deal with acquisition integration issues.
Fujitsu, which has been strong in EAI in Japan and other parts of Asia, has just established a new Australian business unit focused on EAI solutions and capabilities.
John Englaro, who runs project management company SI2, claims there is a shift away from consultancies and software vendors in EAI, driven by a proven inability for many to deliver on mission-critical commitments. "While partners and top consultants are first class at selling the benefits of change, including projects such as ERP or CRM, their expertise ends at the strategic consulting level. It is no longer sufficient for them to schmooze CEOs, convince them of the benefits of this product or that, win the contract to make it happen and then subcontract the whole project to another systems integrator and wash their hands of anything that occurs after the management fee is paid.
"To the software vendor, implementation projects are too much trouble. They cease to make any real money after the product has been sold, so any effort required to actually install it is diverting the company from the much larger returns received from selling further licences to new clients."
Stephen Plank, business solutions group manager for gen-I, sees opportunities for smaller players in the ERP space, aided by the fact that technology such as XML has helped reduce the effort and skills required for implementing EAI.
"Small-to-medium integrators are now capable of engaging in large projects using very mature off-the-shelf technology. The major ERP players are now revealing more of their products through XML Web services, leaving opportunities for small players to start pouring glue around the edges."
Plank says the entry price for EAI technology has also fallen in the last couple of years, due to pressure from vendors such as Microsoft and with the advent of XML and associated messaging/management technologies. The dream of affordable online collaboration is finally a reality and has opened the door for the smaller players.