Market

Market

The size of the real-time computing market is hard to project because it cuts across so many different computing categories, including infrastructure, operating systems, Web services, enterprise application integration, messaging middleware, business process management, business process performance management, and a number of key functional areas such as supply chain management and enterprise resource planning. Supply chain management can be further broken into subcategories that are prime candidates for real-time solutions such as supply chain event management (SCEM) and supply chain decision management (SCDM). What is certain is that real-time computing is a fundamental direction in which the technology sector is moving and one which businesses are readily adopting on a global enterprise scale. Real-time computing can be both an enabler and a desirable end-state. As businesses are able to unbundle themselves from a core competency and business process perspective, they are also able to ensure that these digital manifestations of their business services are moving in real time.

Already we have seen the business trends of just-in-time inventory and build-to-order. An example of build-to-order is Dell Computer Corporation. Dell takes customers' orders and payments and then orders supplies to build computers to the required specifications. In this way, it can avoid carrying large amounts of inventory that may need to be written off if customer demands shift. Moving to real time eliminates a lot of the guesswork or extrapolation that is required when attempting to predict demand. Even in service industries such as the airline industry, companies can leverage real-time operations to manage flutuations in demand and plan their schedules and routes accordingly. They can also offer dynamic pricing in order to sell unused seating assignments close to departure time. In this regard, inventory in the services industry is very similar to traditional product inventory: Both need to be dynamically managed for changes in supply and demand.

Evolution of the Real-Time Enterprise

As we mentioned earlier, the evolution toward real-time computing and the real-time enterprise has been continuing for decades. Now that many of the obstacles have been removed, the enterprise is free to redesign itself in order to leverage the increased business agility, increased productivity, and competitive advantage that real-time processes have to offer. One of the first industries to adopt real-time computing was the financial services industry and other trading-related industries that rely on real-time data feeds across their systems. Their first requirements for any information technology application are often speed and reliability. Other industries starting to adopt real time now include many consumer and industrial products industries and high-tech segments that have a desire to optimize their supply chains or their retail operations. This has spawned the rise of software categories such as SCEM and real-time supply chain visibility.

Bill Barhydt, CEO of KnowNow, a real-time enterprise software vendor based in Mountain View, California, sees all trends pointing toward an always-on, dynamically configurable, real-time enterprise an enterprise that concerns itself not only with real-time visibility but with ongoing detection of, and response to, a continually expanding and contracting universe. He sees four stages in the evolution and adoption of the real-time enterprise in the business world. Firstly, enterprises will gain internal visibility of their own information. Secondly, enterprises will add the ability for this information to be integrated with anything, either a machine or a user device, helping to convert the potential energy of information visibility into the kinetic energy of two-way transactions. Thirdly, enterprises will move toward global visibility for their business processes across employees, customers, and business partners. The final stage is when the enterprise moves to dynamically configurable business processses called business Webs.

This vision for the real-time enterprise shows how the concept cuts across so many IT and business functions. It will ultimately help to create a real-time business operating system at a corporate-wide or even an industry-wide level connecting employees, customers, and suppliers via real-time, dynamic business processes that apply emerging technologies such as Web services to help standardize and provide the flexibility for the real-time integration and interaction. The real-time business operating system can also include a variety of devices and intelligent objects such as those tagged with radio frequency identification, or RFID tags. This will help to incorporate physical objects into the business Web and provide real-time information not only between computers but also between objects.

Drivers for Adoption

Drivers for the adoption of real-time computing and the migration toward the real-time enterprise include IT advances in processing power, ubiquitous connectivity, and freely available bandwidth together with the business drivers of increased productivity and reduced costs, increased business agility, competitive advantage, and customer satisfaction. Another IT advance that has served as a driver for adoption is the increased ease and reduced cost of application integration. For a real-time enterprise to be implemented, businesses need not only connectivity but also integration into a variety of back-end systems, machines, people, and devices. With Web services helping to ease the pain of integration, companies that previously could not afford to migrate to a real-time enterprise, due to the costs of expensive proprietary middleware, can now afford to do so. The current back-to-basics approach within the economy also serves as a driver by focusing businesses on productivity improvements and internal efficiencies. Moving business processes close to real time instead of batch processing can save time and permit immediate action based upon business events. For example, in the supply chain, being able to provide customers and business partners with real-time information related to the status of goods and assets can provide them with actionable information and can avoid late fees or other forms of penalty. GlobeRanger is an example of a company that provides these kinds of solutions. The company offers supply chain visibility and mobile asset management solutions using data collection devices that include cellular, satellite, two-way paging, and GPS positioning.

Despite technology advancements such as Web services standards and applications helping to reduce the costs of integration, migration toward a real-time enterprise can still be a significant cost for a large corporation. In fact, Gartner has estimated that a multinational enterprise should allocate between 30 and 60 percent of the total IT budget if it wants to develop real-time capabilities. For a $5-billion-a-year business, this translates to between $80 million and $160 million per year for five years. This high cost estimate is probably the cost for an enterprise to get almost all of its candidate business processes migrated to real time. Businesses can, however, pursue a phased approach to the migration to real time and focus on quick wins that can be less expensive. The strategy section later in this chapter will help to explore some of these opportunities.

Value Chain

The value chain for the real-time enterprise consists of a stack of software technologies designed to perform three basic computing tasks: to collect information, to process information, and to output information. Real-time enterprise applications must be able to collect information from a source such as human-generated input or a machine-generated event, to process or analyze the information in some manner, and then to output the information to the desired systems or recipients. Real-time events can be as simple as moving a data file or data message from one location to another or as complex as a real-time business process that includes complex algorithms for determining the appropriate actions based upon a variety of "what-if" scenarios. Real-time processes can therefore span the entire spectrum of IT infrastructure and applications, propagating through all layers of the so-called "stack." Typical layers in the stack may include traditional applications such as mainframes and databases, packaged applications such as supply chain management software, application servers, enterprise application integration servers and messaging middleware, wireless middleware servers, business rules and workflow engines, business process management software, and finally, end user devices such as PCs, cell phones, pagers, and personal digital assistants. Additionally, embedded systems and wireless communications can play a large role in real-time monitoring systems that can serve as additional data inputs into a real-time system.

In some cases, real-time software rides on top of these existing applications and helps to ensure that the data is routed appropriately across various applications and devices. Software vendors such as KnowNow are a case in point. Their software rides on top of existing applications such as browser-based applications, spreadsheets, or client/server systems and is designed to serve as a real-time router, moving information from one application to another in a publish/subscribe metaphor. The publish/subscribe metaphor is a strong enabler for real-time processes since it allows applications or even companies to become publishers and subscribers to information flows related to various topics. By subscribing to a particular topic, a business can receive all data that is published on that topic from publishers on the network in real time. The vendor profile on KnowNow provides more information about the company and their technology.

Figure 4-1 shows a value chain for real-time enterprise software. The value chain aims to illustrate some of the categories of software that may have a play in the real-time space when constructing a real-time solution. For any particular business application, any number of these software categories may be required. In some cases, just one software package may be all that is required to solve a particular requirement. The main categories include real-time infrastructure, platforms, integration, processes, and applications.

Figure 4-1. Value Chain for Real-Time Enterprise Software.

Real-time infrastructure includes elements such as network services for security, management, and monitoring of real-time events and communications services such as cellular and satellite systems. The network services are provided in an application service provider model offering real-time software functionality as a subscription service. An example is Bang Networks, which provides an Application Services Backbone comprised of a set of network services layered on top of the public Internet that enables Web applications to gain the functionality and performance of local area network-based applications. Their solution includes a globally-distributed LAN-quality network backbone, network resident application messaging and security services, and Web-native application interfaces. Many of the vendors in other parts of the value chain may offer their software in this network resident manner in addition to offering it as enterprise software that is purchased and installed within the company. Another company in the infrastructure space is FineGround Networks. The company offers a software product called the FineGround Condenser that combines a range of optimization techniques in order to accelerate dynamically generated and personalized content. The benefits of the condensation technology include increased Web performance and reduced bandwidth. The company claims up to 10-fold increase in Web performance from using its software.

Real-time platforms include the real-time operating systems and embedded computing systems that can aid in data collection and monitoring of external factors that may trigger business events or alerts. Intrinsyc is one of the vendors in the real-time platform space making a variety of embedded systems in the industrial automation sector. The platform section of the value chain also includes development tools for the construction of real-time applications. As an example, WindRiver makes software that is used in conjunction with embedded, or hidden, microprocessors that make up over 90 percent of all computer chips sold today.

Real-time integration enables data to be moved based upon business events from one application to another. This has historically been achieved via messaging middleware such as IBM's MQSeries or via software from companies such as TIBCO. Other vendors include companies such as SeeBeyond, Vitria and webMethods; all are positioning their integration technologies as critical enablers for real-time information flows. SeeBeyond provides a unified, comprehensive platform for business integration, enabling a Real-Time Information Network to facilitate the seamless flow of information. Vitria's BusinessWare has been a major player in the enterprise application integration space using a publish/subscribe metaphor for moving data on an information bus. The software has been used extensively in the communications, manufacturing, energy, and financial services industries. Their core BusinessWare platform has components for business process management, business-to-business integration, enterprise application integration, and real-time analysis. WebMethods' integration platform is being applied for global business visibility through its business process management and integration capabilities.

The real-time processes section of the value chain relates to software that is business process oriented. This includes business process management software, which will be covered in the following chapter, and business process performance management software. Many integration vendors products extend into this portion of the value chain as well since most enterprise application integration software is adding business process management as a top-layer of functionality. Vitria's Business Cockpit allows business managers to define, analyze, and optimize their business processes in real time. Likewise, webMethods has a global business visibility workbench that aims to enable nonprogrammers to design global business views. In addition to some of the major enterprise application integration companies offering products in this portion of the value chain, there are also specialty players such as Systar who focus exclusively on the business process performance management field. This field aims to help businesses monitor critical business events in real time and to act accordingly. A dashboard presents key metrics and information that need to be monitored.

Finally, the real-time applications section of the value chain includes software solutions for a variety of enterprise scenarios including supply chain management, enterprise resource planning, customer relationship management, business intelligence, and data warehousing. Sample vendors include CommerceEvents, DemandTec, Nonstop Solutions, PowerMarket, Rapt, Savi Technologies, SeeCommerce, Tilion, Vigiliance, and WorldChain. Many of these vendors such as PowerMarket and WorldChain are focused on the supply chain. Tilion and Vigilance focus on SCEM, SeeCommerce focuses on supply chain performance management (SCPM), and Savi Technologies focuses on real-time supply chain visibility. Others focus on other optimization areas such as demand-based management in the retail industry (DemandTec), demand planning and supply chain management (NonStop Solutions), decision intelligence and profit optimization for manufacturers (Rapt), and automatic identification and data capture (CommerceEvents). Most of these companies have real-time computing as a fundamental part of their value proposition to business customers. They enhance traditional supply chain solutions by adding an optimization layer that helps to manage supply chain events across their lifecycle and to monitor supply chain performance.

Vendor Profiles

One of the real-time computing vendors that we'll profile is KnowNow. The company's product sits in the integration portion of the real-time value chain and is applicable across a wide range of industries. It helps to provide a real-time solution for moving data across a variety of applications using open standards and common Internet protocols.

Real-Time Computing Example

KnowNow

www.knownow.com

KnowNow is an emerging player in the real-time computing arena. The company was founded in April 2000 and is based in Mountain View, California. KnowNow sells software for what it terms "integration everywhere," which enables business integration by using the Internet to continually exchange information among applications.

KnowNow focuses its efforts on making integration software that is simple, scalable, and standard. Their software is aimed at developers who are building integrated applications that run inside and outside the firewall. The approach has been to make communications bidirectional, i.e., initiated by either the client or the server. This enables proactive notifications to be delivered to any enterprise application via event-based asynchronous messaging.

The technology consists of three main components: event routers, modules, and microservers. Event routers are server software that routes topic-based events from publishers to subscribers. The routers provide real-time connectivity by maintaining persistent Web connections with publishers and subscribers. Modules provide content filtering, data transformation, content-based routing, and advanced security for the solution. Microservers are used to hold open persistent Web connections between the event router and any application running in a variety of programming environments. They allow applications to send and receive the KnowNow events to the event router.

Typical scenarios for deployment include interconnecting applications over the Internet, collecting, disseminating, and monitoring business data, and real-time enabling of any application exposed to a network. Suitable functional areas for this type of technology include the supply chain, business intelligence applications, and any applications that require real-time communications across distributed systems. The company targets industries such as financial services, energy, telecommunications, and high tech.

Real-time publish and subscribe software solutions have been available from software vendors for several years but have traditionally required extensive custom coding and have been highly proprietary. The advantage of KnowNow is that it is one of the first vendors to address this space using lightweight technology that incorporates Web services standards and common Internet protocols.

KnowNow's customers include PeopleSoft, Wachovia, and Morgan Stanley. The company's investors include Kleiner Perkins Caufield & Byers, Morgan Stanley, Texas Pacific Group, Palomar Ventures, and RSA Ventures.