WEBSHOP: Native on the Net
- 01 June, 2001 09:54
One of the most important opportunities the Internet phenomenon has afforded the business world is the ability to link disparate applications across an enterprise. The skills of systems integrators and Web developers have been in high demand as companies look to the Internet to connect back-end systems that were previously metres away, but miles apart.
For the past few years, several tier one software vendors have been developing their next suite of applications as native Internet applications, releasing versions developed in HTML and XML that are deployed on a Web server. As these new releases hit the market, integrators and developers will need to keep a close eye on where traditional opportunities will be lost and where new opportunities will be found.
Re-engineering the enterprise applicationAccording the Grace Lai, analyst at IDC Australia, the re-engineering of enterprise applications to be deployed as native Internet applications began with the introduction of SAP's mySAP.com about 18 months ago, followed quickly with efforts by Baan, Oracle and PeopleSoft. While the vendors debate about who started the trend (much of the development work was completed behind closed doors), what is clear is that the concept of the Native Internet Application has been floating around for some time.
PeopleSoft is a case in point where the re-engineering project paid off. Over a period of two years, the vendor's developers completely re-wrote the applications into new versions based on pure HTML and XML.
"We spent a considerable amount of money re-engineering our applications," says Jeff Wareing, business solutions director for PeopleSoft Australia. "We felt that the wheel had turned again. Client/server was no longer the way the applications should be written. We took a gamble on the Internet as a platform, and recognised that Internet architecture could extend the business outside the enterprise."
It was a gamble that more or less turned a company's fortunes around. In 2000, PeopleSoft Australia won tenders for blue-chips such as the ANZ and Commonwealth banks. These successes were mirrored internationally.
"We have become much more attractive," says Wareing. "It has given us a new profile and a lead on the other guys. But one of the frustrations in this industry is that when companies have a technological advantage, it doesn't exist for very long."
Oracle underwent a similar re-engineering effort, culminating in the release of its 11i suite in May 2000. Oracle aimed to Web-enable its entire application suite, making it accessible via the browser. Unlike the PeopleSoft solution, however, 11i would consist of a combination of HTML and traditional code. According to Scott Dawes, director of e-business and industry strategies at Oracle Australia, an application based purely on HTML and its derivative languages is too slow and inefficient for those functions that require heavy data-entry usage. "[11i] is browser-enabled, but there would have been screen refresh issues with a user entering 85 order lines an hour if it were written purely in HTML," he explains.
In Queensland, ASX-listed software developer Technology One undertook a similar project. According to chief executive officer Adrian Di Marco, most of the first e-business software to hit the market consisted of point solutions that needed intensive integration work to be interfaced into the back-end, a process businesses find cumbersome and time-consuming. So Technology One developed an e-business suite that would not sit natively on the Web server.
"The approach we have taken is to provide an e-business suite that allows organisations to extend their back-end systems, such as financial management software, onto the Web," he says.
The business benefit
The business advantage of such an approach, according to IDC's Lai, is cost savings achieved through easier deployment and less maintenance. "As soon as data is entered anywhere on the system, it is already based in a repository and doesn't have to be re-entered," she says.
"Organisations can consolidate their IT architecture onto a single server, consolidate data and also cut IT staffing costs," Oracle's Dawes agrees.
The native Internet application also gives data newfound mobility. The application no longer requires any agent on the client device, making it accessible from a variety of devices.
"There is no need to pre-load software, nor is there a need to manage the cost and the complexity of upgrading the software on all of those devices," says PeopleSoft's Wareing. "It eliminates any complexities over a client having the wrong version, and makes it easy to roll out new modules."
However, generating market demand for native Internet applications is not an easy task. There are no vertical industries that are easily identifiable as markets for the applications. Rather, demand patterns seem to follow lines of function and role within an enterprise as opposed to a line of business. But Wareing is confident this broad market will develop a greater taste for native Internet applications in the near future. "Wherever you look, companies are looking to drive out their costs," he says.
Lai suggests the degree of challenge depends on the price point of the upgrade. "It is a hard sell if the functionality, which is seen as an advantage but not as essential, is too expensive."
Not surprisingly, the most popular candidates for native Internet applications are those that connect the organisation with the outside world. Applications with customer relationship management (CRM) or supply chain management (SCM) capabilities are seen as the most suited for the Web environment.
A common example of where a native Internet application cuts out inefficiency is in the processing of internal human resources. An application that is easily accessible, yet easily secured, means organisations can allow employees to engage in "self-service" activities that reduce the red tape of HR administration.
"The applications have to be targeted at the casual user, for tasks such as filling out an expense claim every month, or applying for leave," says Di Marco. "You could have one application, for example, that enables you to put in a leave request in an automated way, which is routed to the relevant managers for authorisation.
"But I don't think native Internet applications are yet ready for data-entry software, the software people use all day, every day," he says.
Lai warns that not all applications are suitable to such an environment. "It shouldn't be a me-too' approach," she says. "For many applications, I would question whether it is suitable. Essentially, the application still has to sell itself. Web-enabled' is just another access point to the core functionality of the application."
Sniffing out channel opportunity
The evolution of native Internet applications raises several questions for integrators and developers. In many cases, vendors are attempting to cut out any need for third-party integration work; in others, opportunities may arise with companies wanting to protect their investment in expensive legacy systems, and seeking integrators to Web-enable their applications.
Wareing says PeopleSoft sells its applications directly, the exception being when a B5 consultant leads a tender with a PeopleSoft product. Obviously, this leaves few channel opportunities. Similarly, Dawes says Oracle has designed 11i as a complete business suite eliminating the need for third-party products such as SCM or CRM to be bolted on, and leaving little work for Oracle's SI partners. But Dawes concedes many companies will prefer to use an integrator to leverage their investment in legacy systems.
Di Marco agrees. But, like Dawes, he does not believe there are too many organisations seeking developers and integrators to completely re-engineer their applications to sit on the Web server. "The biggest opportunity for integrators and developers is to e-business-enable the back-end applications, opening them up to broader use," he says. "There is a lot of business there to be done yet. But as for taking applications from the back-office and re-writing them in HTML, we're at least four to five years away."
Wareing discounts the need for channel partners altogether. "To be honest, any company that tries to re-architect its solution on the fly is throwing good money at the bad," he says. "Converting an ERP system to XML and HTML is hard to support, and you miss out on all the new functions you get with new versions."
IDC's Lai believes the choice between a company buying an upgrade that is Web-enabled, or having systems integrators doing the work, will ultimately be decided on price. "Depending on the pricing of upgrading to new native Web versions of common applications, customers may find better value in bringing in a third party to do the work, rather than buy the upgrade," she says, adding that most vendors will re-engineer their next line of products into native Internet applications. Dawes suggests the easiest way to remain in demand as a developer is to focus on the tools and skills required to Web-enable applications, rather than the skills and tools needed for traditional client/server computing.
Di Marco sees a more fundamental shift for the software development community. "This will change the way people develop software," he says. "There is a new set of skills required, and not enough of these skills currently in the market. It's going to be a big growth area. As bandwidth gets faster, client/server computing will disappear."