WebMethods CEO eyes Web services innovation

SAN FRANCISCO (11/24/2003) - Integration vendors such as webMethods Inc. are constantly attempting to simplify application integration technologies. According to Philip Merrick, chairman and CEO at webMethods, the next round of innovation in the integration space will come from leveraging Web services standards to improve workflow and business processes.

At the same time, Merrick argues that U.S. companies should not discount the engineering talent available in countries like Australia. After speaking in November at the ANZA Technology Network conference in Silicon Valley for Australian and New Zealand companies attempting to break into the U.S. market, Merrick sat down with fellow Australian Mark Jones, InfoWorld's executive news editor, to discuss the future of the integration business.

InfoWorld: What areas of innovation are webMethods focused on right now?

Merrick: We see a couple of things happening. No. 1, companies want to move their entire software architectures to SOA (services-oriented architecture), built from the ground up on Web services. And it's really difficult to get there by just stitching together application servers and integration servers and a Web services management solution from some small startup down the road. We think there's a very large opportunity to provide a complete infrastructure product designed from the ground up. We're doing that with a product we call webMethods Fabric. It's based on technology that we recently acquired from a very innovative Web services company called The Mind Electric Inc.

Secondly, there's a whole other layer to deal with, what I call the semantic integration problem. Web services are great but they standardize pure connectivity between applications. The applications still have highly varied data models, extremely different ideas of what business processes should look like. Yet for most large organizations, a business process is going to span many applications. So you're always going to need in the middleware stack something that can do wrapping, transformation, and, more than that, can actually keep the model of how the business processes are implemented across all of the infrastructure pieces.So (you need) something that's technology-neutral underneath, like our Fabric product, and then on top have the ability to orchestrate business processes across all of these nodes in the fabric. Our customers now want to get real-time intelligence about what's happening with the business and with the business processes, and they want to see it in dashboards, they want alerts. So we can put real-time monitoring around (IT infrastructure) at the business process level.

InfoWorld: BI, enterprise application vendors, and other integration players are already working on this problem. How is webMethods different?

Merrick: The winner is going to be the one who can provide the most comprehensive set of solutions to the customer in the shortest amount of time with the greatest assurance of success and lowest cost of ownership and best return on investment. We're really in a unique position. We have Fabric, we have the ability to have a pure SOA, our ability to bring everything we do in integration on top of that, and our ability to deliver some pretty interesting business activity monitoring technology that (our competitors) don't have. We're also able to offer enterprise event management, (injecting) business events into some kind of AI (artificial intelligence)-based rules engine.

InfoWorld: How does the utility computing model figure into your plans?

Merrick: The reality of that is the world is much more complex (than utility computing vendors claim). I'm sure some CIOs are getting seduced by the IBM (Corp.) and HP (Hewlett-Packard Co.) visions of on-demand computing. The problem is you can't just take everything that's there and rip it out. IBM can come in and take over the datacenter, but that's not on-demand computing, that's just regular old outsourcing. In fact, my suspicion is that a lot of this on-demand vision that IBM puts forth is really just the new clothing around their outsourcing solutions. My fear is that all these new initiatives generally don't solve the problem, they just layer more complexity on top of what's already there.

InfoWorld: What will drive the next round of innovation in the integration space?

Merrick: I think the interesting thing is what can you do if everything is accessible as a Web service, everything across your enterprise, everything across your suppliers' and your customers' enterprises? And what if you had some tools that allowed you to pull all these things together in ways that we haven't even thought of yet? You could literally build business processes on the fly. We've still got companies with some very antiquated business processes, and certainly none of these business processes were re-engineered with the idea of taking advantage of complete real-time interactivity across the whole enterprise and across the whole supply chain. So I think that that is going to have a very profound effect on how businesses run and how they speed up, and it's going to drive a ton of productivity.

InfoWorld: Offshore software development is a hot political issue in the United States, with most of the talk centered around preserving U.S. jobs. We're familiar with Israel, Ireland, and India as sources of engineering talent. What about Australia and New Zealand?

Merrick: I've always thought for a long time that there's great engineering talent in Australia. New Zealand, I can't speak to. But certainly, if you look at the education system and you look at the kind of graduates that are produced from places such as Monash University and some of the Sydney-based (universities), they've all got fantastic computer science programs. They produce great computer science graduates. And there is a pretty good cost differential between what they earn in Australia and what the going rates are still in the United States. I think the advantages for Australia lie in the ability to innovate and, instead of producing pieces of a product, producing the whole product. Other advantages are the economic system is relatively close to the U.S. system.

InfoWorld: How can U.S. companies find the balance between taking advantage of cheaper offshore development but at the same time protecting U.S. jobs?

Merrick: I think that a lot of companies in the software industry have already started on this. They're making the bet that they can get the cost advantage, preserve innovation, and preserve quality all at the same time. I think you can do really great quality software engineering in places like India in particular. But you have to do a really good job of laying out what the specifications are. India can do probably the best job in the world of coding to a specification and producing from the type specification fairly bug-free code.

One of our competitors is being very aggressive in this area. Tibco is saying that they're going to ultimately have 40 percent of their R&D happening offshore. They've made that bet. Our bet is we'll do better by keeping the innovation onshore but taking advantage of offshore opportunistically.

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