Software AG's goal is to become a €1bn company within three years — and, according to chief executive Karl-Heinz Streibich, SOA will be a key engine for growth.
The German software company started life in 1969 selling the Adabas mainframe database-management system but, by the mid-1990s, the world seemed to have passed it by. It started the slow march to modernisation in 1997 when it introduced its EntireX integration middleware. Six years later, Streibich joined the company as chief executive and deepened its focus on middleware, steering it towards the nascent SOA (service-oriented architecture) and BPM (business-process management) markets.
A major move was the $546m (£350m) purchase of integration specialist WebMethods last year. WebMethods now acts as the company's SOA and BPM business unit, while its enterprise transaction systems unit handles mainframe application integration.
Rivals SAP and Oracle see their applications as a Trojan horse in corporate accounts, as they introduce an underlying SOA framework into which all other SOA components will plug. Unlike them, Software AG believes customers prefer to take an independent middleware approach in order to avoid lock-in. But it's not clear which approach will predominate — if either — as enterprises may choose one or the other, depending on their focus. Whichever way the market goes, what happens over the next few years will be crucial.
ZDNet UK caught up with Streibich at Software AG 's Business Innovation Forum 2008 in London this week, to find out how and where the company intends to make a mark as it makes its bid for growth and leadership.
Q: One of your key business focuses at the moment is SOA. But Gartner has indicated SOA implementations have halved over the last year, due to the poor availability of staff with the right technical skills and general difficulties in building a viable business case. What impact is this likely to have on the company, and how do you intend to address it?
A: Regardless of quarterly movements up and down, SOA is a paradigm change, not a trend. It's an inevitable movement, like the one from mainframes to client/server, which also had its ups and downs. So SOA will happen over the next 10 years, not in 10 years, and I'm sure it will be the IT industry's dominant theme.
The time of silos is over. Silos cause more problems than opportunities, and so integration and automation are a key element of SOA. But SOA is a destination. There are no big-bang SOA projects. They're step-by-step and are driven by specific opportunities. So they're incremental in their nature, and that's their value.
But with SOA, you don't just implement a technology solution. SOA is a business value architecture and capability, and that's what has been put into WebMethods. Our focus is on reducing the total cost of ownership of a middleware platform, which is driven through ease of use. When we implement a proof-of-concept at a customer site, we take two days with three or four guys, while our rivals take 10 days with 10 guys, because we have the benefit of simplicity.
So 'getting there faster' isn't just a marketing slogan — it's realising that a step-by-step approach is key. It's Software AG's key differentiator.
But we also consider long-term relationships to be important, because we believe the long-term journey to transforming the business to SOA requires long-term trusted partnerships. The City of Philadelphia, for example, has been a customer for 35 years.
How much of a threat do you expect Oracle and SAP to pose in the SOA space? Some analysts believe the fact they are building their Fusion and NetWeaver middleware into their applications, to act as a default SOA framework, may make life difficult for independent middleware vendors.
Middleware is the new agility hub, and the last thing that customers want is to be subject to monopolies. SOA is the perestroika of IT. The CIO of Volkswagen said, for example, that he doesn't want an IBM or Microsoft SOA, but a Volkswagen SOA that matches his requirements.
So SOA allows people to partially get rid of the monopolistic grip they have experienced in the past, and people are very aware...