Microsoft Posts Hosted Integration Services, Extolling ''Software Plus Service''

| May 8, 2007 | Application Infrastructure | Competitive Intelligence Report

| Analyst: Brad Shimmin

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

Event Summary

On May 3rd Microsoft launched a Community Technology Preview (CTP) program for BizTalk Server, hosting two BizTalk Services focused on connectivity and identity management. An SDK and access to these services are immediately and freely available on labs.biztalk.net, encouraging developers to provide feedback and build services for deployment on this Microsoft-hosted test environment. Building upon the notion of “software plus service,” BizTalk Services will empower developers with the ability to create a service capable of running on-premise, in a hosted environment on labs.biztalk.net, or on-premise utilizing other hosted services.

Analytical Summary

• Current Perspective: Positive on Microsoft’s call for developer participation in the evolution of its hosted application framework based upon BizTalk Server and .NET technologies. Available for test and feedback as an SDK and an initial set of two hosted services, BizTalk Services represents a significant advancement in thought concerning where applications live over their course of service. BizTalk Services-built applications can be deployed and redeployed on-premise, in-cloud, or as a mixed solution with minimal recoding.

• Vendor Importance: High to Microsoft, which needed to move its middleware efforts forward through innovation rather than continued sales channel penetration. The company has been slow to embrace many SOA trends such as an ESB. However, with BizTalk Services, the company has moved forward aggressively into the realm of SaaS, which Microsoft refers to as “software plus service,” owing to the notion of on-premise software mixed with hosted software services.

• Market Impact: Very high on the SOA and integration software and services markets, because, despite Microsoft’s very tentative steps with BizTalk Services, the company’s release of two initial BizTalk Services focusing on identity and connectivity that can be accessed via SOA standards undoubtedly warrants cautious monitoring by all rivals. This is particularly true for B2B integration vendors (such as SEEBURGER, Sterling Commerce, and Axway) and SOA competitors with line-of-business applications (such as SAP and Oracle).

Recommended Competitor Actions

• Traditional VAN and B2B integration vendors with hosted offerings should take special note of Microsoft’s foray into hosted integration solutions with both BizTalk Services and Dynamics CRM Live. BizTalk services in particular, owing to its technological neutrality, will offer a very compelling option for SMB customers looking to participate in or host external trade networks without investing in on-premise resources.

• B2B integration vendors such as SEEBURGER, Axway, GXS, and Sterling should continue to incorporate ESB capabilities actively within their solutions. While traditional integration servers and ESB services have always shared many tenants, such as transformation and mediation, advanced ESB capabilities focusing on process design and service orchestration will become indispensable capabilities as organizations continue to adopt SOA practices.

• B2B integration vendors with hosted solutions (GXS, Inovis, and Sterling) and hosted network services should promote their established security, scalability, and management capabilities as a differentiator compared with solutions provided by Microsoft and its partners in the future.

• SAP and Oracle should continue developing hosted application integration solutions, deepening existing connectors between line-of-business applications and in-cloud solutions. These vendors should also consider partnering with Microsoft to provide pre-built lines of communication with a BizTalk Services-based hosted network.

• Vendors providing SaaS-enabling technologies such as Progress Software should consider expanding beyond strictly consulting engagements to productize these solutions for consumption within the broader ISV and enterprise communities.

• Traditional SOA rivals with predominantly Java-based solutions such as Oracle, TIBCO, Sun, Software AG/webMethods, and others should see this move as particularly threatening in terms of broadening the adoption of BizTalk Server as an integration platform. Microsoft’s acknowledgement of and support for non-Microsoft technologies within BizTalk Services will help broaden the appeal of BizTalk Server and .Net.

Recommended End User / Customer Actions

• Existing BizTalk customers, particularly those with line-of-business application integration needs, should welcome and support Microsoft’s efforts with BizTalk Services, as the company’s vision will leverage existing Microsoft know-how but not limit customers to Microsoft server-side technologies. In addition, the company’s write-once-deploy-“anyhow” (as a standalone application, as a hosted service, or something in between) approach will undoubtedly resonate with resource-constrained IT departments.

• Both potential and existing Microsoft customers should press Microsoft for a more definitive plan of attack for BizTalk Services, which at present is limited to exploration rather than productization. It will be important to understand first and foremost if Microsoft will market BizTalk Services to ISVs, in which case customers will interact with these services via an intermediary within existing channel partner programs.

• Customers with some investment in Microsoft technologies that are currently subscribing to integration solutions from traditional B2B integration and VAN vendors should watch Microsoft carefully as the company stretches its wings and learns how to fly in this space. Whether BizTalk Services emerge as a Microsoft-hosted offering or as an ISV partner-driven offering, these customers will benefit from the use of or interoperability with BizTalk Services-based solutions.

• Potential customers should press Microsoft to extend the scope of BizTalk Services to encompass technologies from the company’s human workflow and collaboration server, SharePoint Server. Already, Microsoft has indicated a need for integrated workflow within its envisioned ISB, so this is not an unreasonable course of action.

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