Microsoft Ships BizTalk Server 2006 R2

| September 11, 2007 | Application Infrastructure | Competitive Intelligence Report

| Analyst: Brad Shimmin

Current Perspective: Positive
Vendor Importance: Very High
Market Impact: Moderate/High

Event Summary

On September 10th, Microsoft announced the general availability of BizTalk Server 2006 R2, the company’s core service-oriented architecture (SOA) and business process management (BPM) technology. This product includes advancements for radio frequency identification (RFID) and electronic data interchange (EDI), as well as extended interoperability such as enterprise service bus (ESB) guidance and line-of-business adapters. Together, these capabilities make it easier for companies to connect systems within their own organizations and across those of trading partners.

Analytical Summary

• Current Perspective: Positive on Microsoft’s announcement of the general availability of its keystone SOA integration platform, BizTalk Server 2006 R2, because with this release, Microsoft is seeking to reach the “last mile” for its customers, traversing typical firewall boundaries, where business processes touch customers and partners. To that end, the company has added a number of standards and capabilities designed to appeal to branch office and supply chain customers.

• Vendor Importance: Very high to Microsoft, which relies heavily upon BizTalk as a foundational solution within its Connected Systems Division, because the updates and new technologies introduced with this release move the product forward in concert with Microsoft’s .NET 3.0 framework and a number of new opportunities within the B2B integration space with the addition of native EDI and AS2 support.

• Market Impact: Moderate to high on the application infrastructure market, specifically the SOA and integration software and services segments, where Microsoft continues to leverage its strong integration capabilities. By aggressively adopting support for RFID and the B2B integration protocols EDI and AS2, the company has sent a strong message to B2B providers that it intends to leverage BizTalk Server outside the traditional corporate firewall boundaries. Traditional SOA rivals, however, can look beyond this release for a stronger ESB competitor from Microsoft.

Recommended Competitor Actions

• Companies with strong ESB solutions (i.e., BEA, TIBCO, IBM, Sun, IONA, etc.) should call attention to the fact that Microsoft does not have a single, productized ESB solution and it must rely on a collection of documentation and source code products via its ESB Guidance for Partners initiative to “instruct” customers on how to deploy an ESB in support of a SOA solution. This solution has been released as a 1.0 product, but it is still separate from BizTalk.

• SOA platform rivals and competitors within the B2B integration market (such as Sterling Commerce, GXS, Axway, and Inovis) should carefully monitor Microsoft’s hosted B2B integration efforts via its BizTalk Services program, which is still in beta. This IaaS solution, once launched and tied to the company’s Microsoft Dynamics Life solution (also hosted), holds the potential to disrupt the SMB space, particularly with intra-company communications among SMB clients that do not have a substantial data center investment.

• Competitors such as IBM, Sun, TIBCO, Software AG, Oracle, and BEA with a complete business process lifecycle solution, particularly within the broad realm of modeling, design, and business event management (BEM), should position Microsoft’s middleware as an incomplete solution requiring multi-vendor support for BPM and, as such, one that will never achieve the same level of integration and functionality as a single-vendor, integrated solution.

• All rival firms should note that Microsoft is beginning to position BizTalk Server, .NET Framework, and Visual Studio as a cohesive foundation for its Software + Services initiative, blurring the lines between .NET and BizTalk Server. Already, Microsoft is beginning to fashion solutions such as its BizTalk Adapter Pack, which will run directly on .NET without the need for a separate BizTalk Instance. This will make .NET as much of a disruptive element as open source within the ESB market.

• SOA platform vendors, including Oracle, Sun, TIBCO, BEA, IONA, and Red Hat, should call attention to the fact that Microsoft does not actively market any open source elements within its SOA stack, particularly on the tooling end with no Eclipse-based UI. However, the company actively supports a number of open source initiatives within its partner ecosystem and it is actively working with Novell to port .NET to non-Windows platforms. This supportive approach will increasingly serve to position Microsoft as an open source-friendly vendor… the same approach the company has taken with standards support.

Recommended End User / Customer Actions

• Current BizTalk users should seek to evaluate BizTalk Server 2006 R2, piloting applications based on .NET Framework 3.0, which is now more closely integrated with BizTalk Server. Users that have .Net support in their environments should consider BizTalk as an integration solution due to its maturity of features, strong pricing, and ease-of-development advantages. Through the company’s BPA, there are a number of new BPM solutions available that can take advantage of the R2 release and .NET 3.0.

• Customers exploring the company’s ESB Guidance program can now actively begin piloting solutions based upon this suite of documents and source code elements. The solution, which required a specific beta release of the BizTalk Server R2, can now work with the standard codebase.

• Potential customers with a partial investment in Microsoft technologies should feel confident in deploying Microsoft BizTalk for either integration or broader SOA solutions, as the company has displayed a solid commitment to important SOA standards. However, customers should note that, for advanced BPM capabilities and full process lifecycle support, they will need to work with Microsoft and its BPA partners.

• Users should ask Microsoft and their Java-based providers to offer better technology for interoperability. This should include expediting the many WS-* projects as well as other efforts in the area of metadata repositories, XML, management, and the SCA and DSO efforts.

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