Tuesday, June 24, 2003

The End of Enterprise Software?

It feels to me that we're close to a tipping point on enterprise software. While I do think that the various silver bullet solutions - .Net, J2EE, SunONE, grid computing, reflective middleware, computing-on-demand, web services, agent-based software, utility computing, application service providers, etc. - are mostly overhyped in general, I do think that taken as a whole, they do reflect the beginnings of a sea-change in how large companies obtain and use software. And that change has less to do with the nature of the software itself as it does with the way that software relates to other software.

In the old days, a new software installation was likely a greenfield installation - automating or monitoring an existing process that was previously handled manually. The software, it was hoped, would improve the ability of the enterprise to predict, monitor, and control this process, whether it was manufacturing, inventory management, purchasing, etc. As the trend continued, however, these pieces of software began to butt up next to each other; the purchasing system would need to send/get information to/from the accounting system, for example, or the sales system would need to update the inventory. This began the Dark Age of Enterprise Software, at least from the point of view of the customer. From the point of view of the big IT consulting shops, this was the Best of Times.

There's a couple ways to solve this problem, and one of them is to get an integrated package that does every single thing that your company wants done via software. This is basically Oracle's strategy, and similarly IBM and SAP. However, generally this trades off decreased inter-application integration costs for increased customization costs.

What's beginning to emerge, however, is the idea of a middleware bus, a way for many disparate applications to discover each other and dynamically send and receive data. Web services is one slice of this, but also a host of proprietary solutions put forth by startups; if you look at the VC deals being done, or the NIST or DARPA grants being given out, this receives a lot of attention. At first, this trend may make web-based solutions like Salesforce.com a little less competitive, but eventually ASPs will catch on to the game and allow reflective and adapative integration as well.

This is good news for companies, although it won't arrive in a mature form for another few years. It's bad news, however, for the large system integration shops, as their jobs slowly but inexorably get automated away.