Introduction

Every business, regardless of size, geography or industry, faces a common problem: The business has many different applications, databases and data sets but no good way of connecting them together. A large Wall Street bank can have tens of thousands of databases underneath the applications that are running the trading desk. To connect them all, a company would need millions of interconnections and teams of programmers writing fragments of code. Or the company could centralize matters using a solution analogous to the network industry concept of the router: Instead of having thousands of interconnections among computers, this single device can send the same information across many computers.

This Fuji-Keizai USA report examines the business strategies and directions of 30 integration vendors from the public and private landscape that apply various unifying technologies so existing and new systems, databases, software/hardware infrastructures and business processes can talk to one another, across applications and, usually, over the Internet. Each vendor's integration solution may have different functions. There are solutions for:

·	Integrating different generations of computers and the applications running on them from mainframes to client/server systems and Internet-based system
·	Integrating different types of resources internal databases, application servers, packaged and custom applications, and the  systems of business trading partners
·	Managing the underlying business processes that define interactions between computing resources
·	Allowing access to new types of real-time data, such as RFID data, flowing through integrated systems
·	Providing integration and interoperability using maturing Web services technologies
·	Providing security or management capabilities for legacy systems integrated with Web services
·	Integrating systems on the data, application and/or business process levels as a managed network service

Integration is a large, multidimensional marketplace with many competing technologies and services available today. It is a large business challenge. If you are up to the challenge - and want to know how vendors are preparing for what's going to be in demand tomorrow - you're up for this report.

This report describes the core business strategies of 30 integration vendors. To be included, a vendor had to meets one or more of the following criteria:

Vendor Selection Criteria	Definition
Medium-size	12 of the 30 vendors (40%) are midsize, which we broadly define as vendors whose revenues (on average) range from $10 million to $100 million. Companies in this midrange have significant upside growth potential. They may be public or private. Another 3 vendors (10%) are larger, with revenues of $150 million to $200 million, but still smaller than a mega-integrator like IBM.
New or venture-funded	14 of the 30 vendors (47%) are start-ups with revenues that fall under the midsize threshold (<$10 million). Start-ups are included since they are developing or applying technology in a unique way to gain a competitive position or create a new market. Most start-ups are focused on Web services-enabling solutions.
Growth potential	Mid-size and start-up companies, taken together, have the largest or fastest market growth potential, including the potential to: _Generate new customers _Generate demand for new IT or network services _Generate revenues and profits
Application integration focus	To be included, the vendor has to offer a solution that integrates or processes data at the database or application levels, although the solution can be implemented as either: _Middleware (most commonly) _Hardware that handles limited integration functions _A hosted network service
Broad market scope	Selected vendors have a customer base that is reasonably broad, spanning either: 1. Geographies TH with U.S. and/or EU, Japan or worldwide customers; or 2. Two or more vertical industries TH e.g., healthcare, retail, energy/utilities, finance/banking, manufacturing, telecom or other segment
Value proposition	The vendor's solution must create value or get better business results for the end-customer and/or its value chain. The value-added proposition can be: _Improved operational efficiency (speed) _Cost savings _Improved productivity of staff _Expanded capacity to distribute information _Revenue-additive value

A NOTE ABOUT IBM Although this report focuses on midsize vendors and emerging companies in the integration technology space, we must acknowledge the role and influence of IBM, which is the largest of the system integrators. IBM's influence is strongly felt throughout the integration market because it has solutions in every segment covered in this report. For this reason we've included in Section 2 a profile of IBM Software Group's core integration business, technologies and strategy.

Target Venders ( 29+IBM)

AMBERPOINT, INC. AVAKI CORPORATION BluePhoenix SOLUTIONS, LTD. BLUE TITAN SOFTWARE INC. CAST IRON SYSTEMS COMPOSITE SOFTWARE, INC. CONTIVO, INC. DATAPOWER TECHNOLOGY, INC. DATASYNAPSE, INC. EPIANCE CORPORATION, FLAMENCO NETWORKS GRAND CENTRAL COMMUNICATIONS HUBSPAN, INC. IBM CORP. (SOFTWARE GROUP), INFORMATICA CORP. IONA TECHNOLOGIES, INC.JACADA, LTD. METAMATRIX, INC. NetManage, INC. PLATFORM COMPUTING, INC. POLARLAKE REDPRAIRIE CORPORATION SARVEGA, INC. SeeBeyond TECHNOLOGY CORP. SONIC SOFTWARE CORP. VIACORE, INC. VITRIA TECHNOLOGY, INC. VIZIONAL TECHNOLOGIES, INC. WEBMETHODS INC. WRQ, INC.

Research Point

Integration Market Trends & Analysis of Profitable Businesses

Part 1 presents our findings and an analysis of the strategies of 30 different integration vendors.

Readers should then refer to Part 2 for individual business profiles of each of the selected vendors.

_Section 1 examines dominant technology and business trends among integration vendors. Almost all of the new hardware, software and network services developments relate to creating and managing an infrastructure to support a services-oriented architecture (SOA) and strategy.

_Section 2 presents current market size data and a demand forecast for the integration market as a whole, and for individual competing approaches to integration.

_Section 3 ranks the vendor participants by category, growth rate and profitability.

_Section 4 categorizes the vendors by their product roadmaps and strategic directions.

_Section 5 describes how strategic partnerships and alliances are shaping the integration marketplace.

_Section 6 explains the issues and trends in legacy system migration/integration.

Part 2- Integration Vender Activity:

The 30 vendors profiled here were selected because they have relevant and/or novel integration technology solutions that meet the criteria set out in Part 1. The companies are listed alphabetically. Each company profile includes:

A. Contact information
B. Company performance data

For start-ups and private companies, financial data is limited. In these cases, the information is approximated and presented to provide a comparative view of the company's performance over the last two years vis--vis other companies in the integration market.

C. Analysis of current business line

Product/system/service categorized according to the vendor's primary market segment (as identified in Part 1, Section 3).

D. Analysis of new business lines - where business growth is expected in the near future
E. Legacy migration strategy
F. Partner strategy and strategic alliances
G. Interesting case study
H. Summary of Fuji-Keizai's findings

Table of Contents

Introduction
Who's Covered in this Report: Vender Selection Criteria
Who Is Not Covered in This Report

Part 1: Analysis and Directions
    Integration Market Trends & Analysis of Profitable Businesses

1. Advanced Integration Vendors: 2005 - 2006 Directions

  The Reshaping of EAI
  ESB and EII Market Segments
  Web Services (WS)
    Web Services and XML-Based Standards (partial list)
  Business Process Integration
  Service-Oriented Architectures (SOA)
  Integration Inside the Box: Hardware-Based Solutions
  Application Integration Routers
  XML Processors and Security Gateways
  Integration as a Network Service (External Integration Service Providers)
  Integration "On Demand"
  RFID Integration

2. Demand Size and Forecast for Key Integration Technologies
    2003 - 2008

  Total Demand
    Total Integration Technology Market Size (Global)
    EAI and Closely Related Integration Technologies
    Comments/Explanations
  Demand by Category
    EII Software Revenues (Global) & Growth
      Comments/Explanations
    ESB Software Revenues (Global) & Growth
      Comments/Explanations
    WS/XML Integration Revenues (Global) & Growth
      Comments/Explanations
    BPI Software Revenues (Global) & Growth
      Comments/Explanations
    RFID Integration SW & Services Revenues(Global) & Growth
      Comments/Explanations

3. Integration Vendor Roadmaps (1) by Category - Table Formats

  3.1 Revenue Ranking
    Rank, Company, Revenue ($ M), Business Type, Technology/Platform,
    Main Application, Unique Service, Business Model
  3.2 Growth Rate Ranking
    Rank, Company, Revenue Growth %, Business Type, Technology,
    Platform, Main Application, Unique Service, Business Model
  3.3 Profit Ranking
    Rank, Company, Revenue ($ M), No.of Employees, Rev. per Employee
    Business Type, Main Application, Unique Service, Business Model

4. Integration Vendor Profit-Ranking Analysis (2)

  Advanced Integration Vendors and Success Models
    (1) New Application or Solution
       Company, Core Strength, Directions
      Strategy 1
    (2) New Market Segment
      Company, Core Strength, Directions
      Strategy 2
    (3) New Technology (Software, Middleware, Hardware)
      Company, Core Strength, Directions
      Strategy 3
    (4) New Service Platform
      Company, Core Strength, Directions
      Strategy 4
    (5) New Business Model for Profit
      Company, Core Strength, Directions
      Strategy 5
    (6) New Value Chain Offering
      Company, Core Strength, Directions
      Strategy 6

5. Strategic Trends of Partnerships (Alliances)

  Partnerships as a "Cover All The Bases" Strategy
  Partnerships to Generate Revenue
  Partnerships to Create a Vertical Industry Strategy
  Partnerships to Expand the Vendor's Geographical Presence
  Partnerships for Joint-Product Development

6. Trends and Directions for Legacy System Migration/Integration

Part 2 - Integration Vendor Activity: At-A-Glance View of Integration Vendors

  Common Research Items:
    A. Contact Information
    B. Company Performance Data
    C. Analysis of Current Business Line
      (Product/system/service categorized according to the vendor's primary market segment)
    D. Analysis of new business lines TH where business growth is expected in the near future
    E. Legacy Migration (strategy of replacing mainframe and midrange AS400 systems)
    F. Partner Strategy or Strategic Alliance
    G. Interesting Case Study
    H. Researcher Finding and Comments

Venders (29+IBM)

Part 3 - Key Finding and Conclusions

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