Software AG: XML will lead e-business

The lessons from the hype of 1999 and 2000 were hard learned ones, said Viljoen, but the IT industry and their business customers have emerged with a better understanding of what e-business entails.

“This is a reality check that has happened, where integration within an organization must come first before it can even think about externalizing its e-business initiatives,” said Viljoen. “B2B will take a lot longer than previously thought, but it’s going to be a lot more solid and viable.”

Viljoen’s argument follows Gartner’s projection of a technological hype-cycle which posited a hype of B2B expectations during the go-go years of 1999 and 2000 followed by a trough of disillusionment in the waning year of 2000 (see chart).

Software AG, however, sees a different recovery curve from Gartner and expects another dip of expectation within the next two years. Which means, more hard times ahead.

As one of the largest software companies in Europe, Software AG positions itself aggressively as a developer of native XML solutions. Its developmental efforts in the last 3 ½ years culminated in the release of its flagship, Tamino XML database in 1999.

The Tamino, however, has since grown to incorporate a lot more functionality than just a database. According to Software AG, the platform now has features that overlap with the domains of application, integration and database servers. It is this expanded functionality of the XML server that Software AG hopes will make the technology a central part of any integration initiative.

“What we had when we started was a database,” said Viljoen. “But by reacting to market trends and demands, we have since evolved to include a lot more functionalities that are vital to the XML server.”

A query with an XML based database, for instance, allows not only searches by key words, but also searches by keywords within a context. That gives the language immense flexibility as a messaging tool for machine-to-machine and even system-to-system communication.

In an e-business infrastructure where information is stored in a disparate network of machines, databases, file systems and applications, XML can play a vital role as the glue that gel the whole system together.

The outlook for the uptake of the language is also very positive. Gartner estimates that by the end of this year, as much as 80% of all Web-based technology will use XML-defined data interchange. Jona Research is equally enthusiastic about the technology, predicting that businesses using or are planning to use XML will increase from 20% in 2000 to 78% in 2001.

Companies, however, have yet to jump onboard the XML bandwagon. In the solutions provider space, XML based e-business applications are noticeably lacking from the mix. Typically, smaller companies are the first to experiment with the technology in the hopes of gaining a competitive edge through innovation. But larger companies are also taking notice as vendors like IBM and Microsoft are also rolling out their own XML based solutions.

“Companies that have the most to lose are actually the application developers, because they have already invested so much into developing their products. So it’s a big decision for them, to make the switch from relational database products to XML based systems,” said Viljoen. “But it has to start somewhere and we’re very excited about where the market acceptance is going.”

For now, Software AG pursues an aggressive partnering strategy to keep XML on the forefront of integration technology. Just this month, the company announced technology and business partnerships with Hewlett-Packard, BEA and Singapore’s Finesses Alliance. The partnerships with HP and BEA are especially significant as they confirmed Software AG’s claim that the Tamino XML server is a complimentary technology to application and integration servers.

A big part of the company’s development strategy has been compliance with existing standards. Software AG employs three full time experts who sit on the W3C panel. These experts advise the company on product development and give the company inside scope on panel debates.

“By sticking as close as possible to the standards and making sure that you don’t go the proprietary route is the guarantee of longevity,” observed Viljoen. “Doing that and differentiating ourselves by how well we deliver the products have really served well for us.”

With Microsoft, IBM and Sun pursing an aggressive strategy in XML development, it is certain that the technology will play a prominent role in the future of e-business no matter what happens. For a company who began following the technology right from its inception—Software AG began developing XML based solutions almost as soon as the first standards were finalized—the pay-off is potentially huge.