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TUCON: Product Announcements, including a Messaging Appliance

I decided to break this out into a separate post although it’s all the same keynote, since this is getting a bit long and this post has all the product goodies in it, including TIBCO’s first-ever hardware release in the form of a messaging appliance.

Matt Quinn, TIBCO’s SVP of engineering and technology strategies, discussed product directions and their focus areas for 2008/2009:

Event-driven computing everywhere
invest in neutrality and enterprise breadth
Continue to simplify and streamline user experience

A bit of this was covered in the GTM strategy yesterday, but he provided much more information on specific products:

TIBCO ONE, covering all user interfaces from design time to run time, is now under the auspices of a single user experience team. They’ll be adopting Microsoft’s Silverlight as an alternative to their own General Interface, and some functionality will soon be available on Silverlight as well as GI.
He announced Spotfire version 2.1 for creating interactive business mashups, and discussed the Spotfire Operations Analytics that Ahlberg showed us yesterday.
BusinessEvents version 3 is in the final testing stages, providing a fully distributed and fully clustered rules, CEP and streaming engine, apparently a first in the market.
Over the next year, a new product called ActiveSpaces will be introduced for distributing data and state management cache, and is design to handle massive volumes in real-time.
iProcess version 11 is now in final testing, with real-time worklist management based on events, and some improvements to installation, LDAP support.
Business Studio version 3 is also being released, now fully based on Eclipse as part of the TIBCO ONE’s initiatives, and now (wait for it) with full functionality of the older process modeler, including Eclipse-based forms design.
ActiveMatrix version 2 and BusinessWorks 5.6 have been shipping since December, with improved capabilities such as multiple projects per BW engine, and AMX support for BW. In the future, the BW user interface will become part of TIBCO ONE, new testing, development and performance tuning tools will be added, and new deployment options such as clustering will be supported.

There were other announcements about enterprise messaging, managed file transfer, service performance management and CIM; it all went by pretty fast but there will be more information over the next two days.

The big finale was the announcement of a messaging appliance, which they showed on stage to spontaneous applause: a dedicated piece of hardware with Rendezvous embedded within it for incredible performance characteristics, allowing multiple services to be replaced by this single appliance. The appliance doesn’t replace existing Rendezvous installations, but is intended to work with them. They’ll be shipping the first units in September; press release here.

TUCON: Keynote

Before I start, I have to make a comment about the analyst dinner last night. I usually have a hard-and-fast rule about not blogging anything that happens when I have a drink in my hand, but I want to shout out to Heidi Bartlett for organizing the analyst summit yesterday and arranging for an amazing dinner last night. Not only were there excellent food and wines, but I sat with Christopher Ahlberg (Spotfire) and Bruce Silver so had excellent conversation as well about analytics and BPM.

The keynote session was hosted by Tom Laffey, EVP of products and technology — an engineer in the sea of sales and marketing people that’s typical for these events. After a brief intro, we heard from Vivek Ranadivé reprising his message from yesterday of Enterprise 1.0 being the mainframe era (1960-1980), Enterprise 2.0 being the database era (1980-2000) and Enterprise 3.0 being the event-driven era (2000-2020). Someone really needs to get the message to him, or whoever in marketing writes his stuff, that Enterprise 2.0 has a specific meaning in the current vernacular, and this isn’t it.

He does have a good message, which is that we’ve moved from having some of the information available in some places some of the time, to having all information available in real-time, on demand wherever we want it. In reality, we’re not there yet — my bank, one of the largest in Canada, still can’t post my banking transactions to the web in less than 24 hours — but infrastructure like TIBCO is going to help to make it happen by providing the mechanisms to tie systems together and perform complex event processing. He seeing the transition from the last 10 years to the next 10 years as being from static to dynamic, from database to SOA, from ERP to BPM, and from BI to predictive business. A modern-day event-driven architecture has an event-driven service bus as the backplane, kicking up events to the "event cloud" where they can be consumed and combined by analytics for visualization and analysis, rules to determine what to do with specific combinations of events, and BPM to take action on those decisions.

Ranadivé was followed by Kris Gopalakrishnan, CEO of Infosys (a major TIBCO integration partner), who talked about the changing markets, economies and demographics, and how enterprises need to change in order to respond to and anticipate the new requirements. A rapid consumerization of enterprise IT is happening, with greater demand for richer digital experiences both by internal enterprise workers and external customers. Process cut across systems and organizational boundaries, and need to be managed explicitly. IT systems need to be exposed as services that are aligned to business operating model in order to allow IT to respond quickly to business needs. Analytics need to be provided to more people within an enterprise to aid decision making, and there needs to be a convergence of BPM and BI to drive business optimization. He sees that the fundamental problem of information silos still exists: a point of view that I agree with, since I see it in client organizations all the time.

We then heard from Bob Beauchamp, CEO of BMC Software, to hear the customer viewpoint on IT process management using TIBCO’s products. The theme of the conference is "building bridges", with lots of pictures of the Golden Gate bridge and other famous bridges as slide backdrops, and analogies about building bridges between systems, and he used the Golden Gate bridge in another analogy about software: the bridge cost $24 million to build, and $54 million per year to maintain. This analogy is especially true of custom integration software, where in many cases you either effectively rewrite it constantly to keep up with other changes in your environment, or allow it to fall into disrepair.

In particular, however, he’s talking about how IT processes are the last to benefit from new technologies, since they’re too focused on providing these to (or testing them on 🙂 ) other departments within an enterprise. BMC is using TIBCO ActiveMatrix and some of their own technology to bring functions together in order to enable more efficient IT processes, including service support such as asset configuration, service automation such as auditing and compliance, and service assurance such as predictive analytics and scheduling. He sees this as transformational in how IT is managed, and believes that it will have a huge impact in the years to come.

Next up was Anthony Abbattista, VP of technology solutions at Allstate insurance. They’re a huge company — 70,000 employees and 17 million customers — and always felt that they were unique enough that they had to build their own systems for everything, a mindset that they’re actively working to change now. With a 7×24 operation that allows customers direct access to their back office systems, they had some unique challenges in replacing their custom legacy systems and point-to-point integration with standardized reusable components that gives them greater agility. They’ve completely rearchitected for data hubs, service bus and a range of new technologies, and taking advantage of standards to help them move into a new generation of systems and business processes.

TIBCO Analyst Summit: Partner and Channel Strategy

Dean Hidalgo, Director of Industry and Partner Marketing, discussed the partner network and how it ties into their overall strategy. As we heard in the sales strategy sessions, partnering is extremely important in certain regions and will be increasingly so as TIBCO pushes into new geographies that they can’t cover with their own people directly. The usual big system integration companies are here: HP, EDS, Infosys, Wipro, Accenture, Deloitte and CGEY to name a few.

He also discussed their vertical marketing activities, providing tools that allow the sales teams to present vertical value propositions (VVP) — matching the functionality of TIBCO’s products to the vertical business requirements — without having vertical products. Salesware, not software. TIBCO doesn’t back down from the idea that they sell infrastructure, not vertical packaged applications, although these VVPs include "frameworks" (really unsupported templates) of pre-configured rules, policies, KPIs, dashboards and processes that they throw in for a customer to use as a starting point. These VVPs are based on successful real-world implementations, like their predictive customer interaction management that is based on what was actually implemented at one of their large retail banking customers, advanced order fulfillment for telco, dynamic claims management for insurance, predictive STP for securities, point-of-sale monitoring for retail, supply chain optimization for manufacturing and retail, and disruption management for airlines and logistics.

There was a lot of discussion in the room about the value of the VVPs: some analysts felt that this didn’t go far enough, and that TIBCO needs to put out some vertical applications in order to compete, but several of us (including me) feel that this type of vertical marketing is extremely valuable by allowing an infrastructure company to sell to business people without moving out of their sweet spot. If a customer doesn’t look closely at this, however, they might think that these are supported products rather than unsupported templates. This is likely to be exacerbated by their marketing videos that refer to (for example) "TIBCO’s airline disruption management system" — if seen in isolation, or presented by a salesperson who didn’t make that distinction clear, it would be pretty easy to make that mistake.

Abhishek, AVP and head of BPM-EAI practice at Infosys, briefed us on Infosys, their primary verticals and their horizontal technology specializations. They have a significant TIBCO practice, which has allowed them to build reusable frameworks and tools that accelerate their TIBCO-based projects with clients. I’m all for reusability, but I’ve seen some pretty disastrous frameworks built on other products by other systems integrators, and I’m wary about the maintainability and weight of any third-party framework: if you’re looking at something like this, be sure to check out issues like whether it’s productized or considered custom code, the process for upgrading the underlying platform, e.g., TIBCO, and the ability to use the underlying platform features directly for design and administration. In addition to frameworks and systems integration, Infosys is also an engineering partner of TIBCO, developing and supporting various application and technology adapters.

We were supposed to finish at 4:30, but the only thing that ended at 4:30 sharp was our internet connectivity. To be fair, TIBCO provided hard-wired connectivity and power to each table in the analyst briefing room throughout the day, and they did get the internet access turned back on about 10 minutes later so that I could publish this last post before heading to the solutions showcase. The stories that I heard about the hotel’s extortionate cost for wifi doesn’t bode well for intraday posting the rest of the week, in spite of the BPM product marketing manager’s promise to have someone follow me around with a wireless router. 🙂

TIBCO Analyst Summit: Spotfire

Christopher Ahlberg, founder of Spotfire and now president of TIBCO’s Spotfire division, discussed Spotfire’s capabilities and what’s been done with integrating Spotfire into other TIBCO products.

Timely insights — the right information at the right time — is a competitive differentiator for most businesses, and classic business intelligence just doesn’t cut it in many cases. Consumer applications like Google Finance are raising the bar for dynamic visualization techniques, although most of them are fairly inflexible when it comes to viewing or comparing specific data in which you’re interested. In other words, we want the data selection and aggregation capabilities of our enterprise systems, and the visualization capabilities of consumer web applications. Ahlberg sees a number of disruptive BI technologies transforming the platform — in-memory processes, interactive visualization, participatory architecture, mashups — and starting to be able to link to the event-driven world of classic TIBCO.

He did a demo of copying and pasting the contents of a spreadsheet directly into Spotfire, which automatically used the column headers as metadata and created a scatterplot. He filtered and colored the chart dynamically, set thresholds and played around with the data to show what could be extracted from it, then showed a pre-built dashboard of charts that still allowed quite a bit of interactivity in terms of filtering and other view parameters. He also showed a mashup between Spotfire and Microsoft Virtual Earth that allowed a subset of the data to be selected in Spotfire, causing a shortest route between the geographic location corresponding to the data points to be plotted on Virtual Earth.

This puts a much more configurable face on standard analytics, not just in display parameters but also in area like selecting the dimensions to be compared on the fly rather than having them pre-defined in OLAP cubes. Since TIBCO is focused on real-time event processing, the logical step is to see how those events can be visualized in Spotfire: instead of just raising an alert to someone, give them a view of the analytical context behind the alert that makes it easier to close the loop on problem resolution. They’ve packaged this as Spotfire Operations Analytics, which fits most closely into a LEAN Six Sigma manufacturing environment.

There’s a session on Thursday about BPM with analytics which I’ll likely attend to see what they’re doing in that area.

TIBCO Analyst Summit: Go To Market Strategy

Ram Menon, EVP of Marketing and Product Strategy, discussed the go to market strategy for some of the opportunities that Murray Rode identified earlier.

One opportunity for growth is in simplification, in four major areas:

Improved focus on who they are targeting in the sales process, based on their experience of who is most likely to buy and through deepening their penetration within existing customers.
Creation of horizontal bundles that simplify purchasing for IT buyers: SOA starter edition, SOA composite apps, SOA integration, and SOA governance.
Focus on differentiated vertical value propositions that allow a business buyer to match TIBCO’s capabilities to their specific business needs.
Improved user interface and usability in the form of TIBCO ONE for deployment and management, all based on a common Eclipse framework and some of the technology that they acquired with General Interface.

They have a three core SOA messages to the market:

Best in class ESB
SOA service management
Extreme messaging, namely top performance

They also have some BPM-related themes:

Advanced order fulfillment (vertical)
Dynamic claims management (vertical)
Unify BPM and SOA: cross-selling BPM to existing SOA customers

There were two business optimization themes, including a supply chain management vertical, but that went by too fast for me.

Bruce Silver and another analyst later asked about the vertical solutions, and it appears that this is more about marketing and advertising than any verticalization of a product or service offering.

Menon discussed some of the specifics of their expansion into new geographies — including up-to-date localized product materials and websites — and new partner models.

They’ve made a big push for visibility in the market over the last two years, including such efforts as Greg the Architect videos on YouTube, resulting in a much greater chance of TIBCO’s name appearing whenever equivalent IBM and Oracle products are mentioned. They’re also launching TIBCOmmunity, a social network for their customers, although the site’s not up yet so there’s no details on what it will include.

He was followed by two of the VPs of Sales — Robin Gilthorpe for the Americas and Tony Harris for Asia-Pacific — and EVP of Sales Murat Sonmez standing in for the VP for EMEA, each discussing the specifics of their region.

A question came up at the end asking about who they’re selling to within organizations, and (not surprisingly) almost all SOA sales are to IT, whereas BPM is sometimes being sold to business management. TIBCO has a legacy of selling to IT, and I suspect that much of the sales force is most comfortable making the technical sale. Selling to business takes a slightly different set of skills, which makes me curious if they’re specifically recruiting business-oriented salespeople in their current sales force expansion.

TIBCO Analyst Summit: Corporate Vision

Next up was Vivek Ranadivé, CEO, with a summary of where the company came from and some vision for the future: Enterprise 3.0 (yes, he actually said that), focused on event-driven SOA, predictive analytics and the business processes that use them.

He sees their superior technology as key, but feel that customers also gravitate to them because of their neutrality: a direct dig at IBM — who he believes is both not neutral and has inferior point-to-point event technology — and at BEA being acquired by Oracle (although rumors continue to fly in the industry about who is going to acquire TIBCO, and when).

Although this session was billed as "strategy and vision to remain a leader in the current market of consolidation and competitive pressures", I didn’t hear a lot about how they plan to do that, except for a "we’ll sell more because we’re better" sort of statement.

TIBCO Analyst Summit: Corporate and Financial Overview

TIBCO’s having their first ever analyst summit in the day before the TUCON user conference starts, covering both business strategy and product announcements.

First up was Murray Rode, CFO, with a company overview and their position in the market. Their key market segments are SOA and BPM, as we know, but also business optimization (rules + analytics) based in part on the acquisition of Spotfire a year ago. They see their differentiators as their neutral platform, mission critical engineering and being event-driven and bus-based. They also see "infrastructure becoming the essential part of the architecture" and that companies are using TIBCO to "create apps from infrastructure". A key catchphrase summing up what their products can do is "simpler connectivity, more complete automation".

Their fiscal year 2007 revenue was $577M, I was surprised to hear that 50-55% of their revenue is from services, which includes both maintenance and professional services, in spite of a strong partner channel that presumably is also generated significant professional services revenue based on TIBCO products. Geographically, about 50% of the revenue is from the Americas, 40% EMEA and 10% Asia-Pacific. Financial services is their largest vertical at 25%, with telecommunications at 10-15%. They’re continuing to expand their sales force from the current 170 to 190-200, with each quota-carrying salesperson generating about $2.2M in licence revenue annually, and in addition to growing the sales force, they intend to continue expanding through new geography exploration, acquisitions and partner channels.

BPM is 11% of revenue, business optimization is 25%, and the remainder is SOA, although it’s difficult to separate out in many of the larger deals that may be driven by BPM without the licence revenue necessarily reflecting the importance.

Their growth strategy, in summary, is to build on pure-play leadership and neutrality, direct sales force expansion for broader coverage, fully penetrate Global 2000 before expanding to mid-market, continue Spotfire focus with increased cross-selling, and new geographies and indirect channels.

Architecture & Process: Jaakko Riihinen

Jaakko Riihinen, head of enterprise architecture for Nokia Siemens Networks, spoke about business process architecture: a deep dive into the details of one set of models that they use in their EA efforts. He started with definitions of architecture, process and abstract modeling, reinforcing that a presentation view of a model is just a view, not the entire model. In his definition of architecture, I especially like the analogy that he made of architecture being the external energy that keeps systems within an organization from evolving into chaos. In general, architectures tend to satisfy nonfunctional requirements, such as optimization of system economics.

One of the issues in modeling processes is the different types of models that may be used in different departments, and the ultimate goal is to have a set of process models for the entire organization rather than having them be constructed piecemeal. He characterizes processes in three types: transactional, creative (team collaboration on work product), and community (dynamic, self-organizing); the modeling method that is the focus of this presentation addresses transactional processes.

He shows three elements of their process architecture:

A process integration model, showing the high-level view of how processes and work products interact. This is the functional design of the process architecture.
A process behavior model, which is a standard swimlane process model that shows the detailed view of one of the process nodes from the process integration model. It’s different from BPMN in that the work products are shown within the sequence flow rather than attached as artifacts since they are focused on linking the activities closely to what triggers them and what they produce.
Work instructions for performing one activity in a process.

Other characteristics of a process are also modeled:

Process instantiations, which can be scheduled or event-driven; where event-driven can be based on work product (e.g., inbound document) or an explicit event (e.g., timeout).
Execution constraints, either a free-running schedule (activities execute as soon as inputs are available) or an imposed schedule (e.g., periodic reporting)

The process integration model shows the instantiation methods for each process, as well as showing how multiple processes can provide input to another process in a variety of ways, including both informational and triggering.

All of this provides the notational background to discuss the real issue: normalization of process models and process architecture, using methods derived from classic systems methodologies such as control system theory and critical path analysis. The benefits of normalization include unambiguous definitions that are easier to understand, and better recognition and reuse of process patterns, but the real benefit is that this turns process architecture from an art to a science. There are four basic rules for process architecture normalization:

Structural integrity: closing alternative paths within parallel paths, and closing parallel paths within alternative paths (these are basic topology constraints from graph theory, and would be enforced by most process modeling tools anyway)
Functional cohesion: no disconnected activities
Temporal cohesion: no synchronous processing by activities outside the process (which implies that you would not use the BPMN method of separate pools for separate organizations since messaging between pools would not be allowed, but would consider that separate organization’s activities to be part of the process if your internal process needs to wait for a response from the other organization before continuing the process)
Modularity: activities or roles having different cardinalities belong to separate processes (this helps to determine the boundaries between processes, e.g., sets of activities that pertain to the entire company are usually in separate processes from those for individual business units), variance at the process level (when alternative paths in a process become sufficiently complex or encompass most of the process, create two variants of the process), variance at the integration model level, deployment details, process components (subprocesses shared between processes)

Determining the boundaries of a single process may involve combining what are considered to be separate processes into one: we discussed the example of employee onboarding, which involves several departments but is really a single process. Looking at the triggers for activities and processes also helps to determine the boundaries: activities that asynchronously create work products that are consumed by other activities are usually in a separate process, for example, as are activities that are performed on different schedules.

They’re using ARIS, and have configured their own metamodel for the process integration model and behavior model. Riihinen is also interested in developing automated methods for normalizing process models.

His slides are incredibly dense with information, and fascinating, so I suggest that you check them out for more details on all of this. In particular, check out the slides that show examples of the four process normalization rules.

As you can tell by the above URL, the conference is using Slideshare to publish (but not allow downloads of) all presentations here.

Architecture & Process keynote: Tom Koulopoulos

The afternoon keynote was by Tom Koulopoulos, the well-known and well-respected consultant who founded Delphi Group and is currently also at Babson College’s think tank on business innovation. He’s worked extensively in the business process/knowledge management space, so I’ve tracked his excellent work and writings for years. He spoke to us today about innovation.

Innovation is change that creates value.

Innovation and invention are separate concepts. We’re surrounded by invention, and we have a hard time picking out innovation from the noise created by the relentless invention of (often useless) gadgets. Is this invention for the sake of invention, as Koulopoulos says, or is this the necessary process for eventually refining out a few good ideas?

Innovation is the collaboration between an idea and the marketplace. The market will not be able to predict the effect of true innovation, since there’s no context for understanding that: consider that the most extreme, ambitious prediction for the world market for mobile phones was 50 million handsets, a number that’s off by two orders of magnitude today.

Innovation really happens when behaviors start to change. It’s a process, it’s not about an invention. It’s an ecosystem where good ideas are captured, inventoried and reused to help them come to fruition. Today, many of the innovations are in business models, not the product or service.

Koulopoulos had seven lessons of innovation:

It’s about the process, not the product.
Build an innovation competency. You have to build a competency in innovation within your organization in order to encourage, support and reward it. Many organizations institutionalize the idea of being the incumbent rather than look for ways to find innovation, putting up both cultural and logistical barriers.
Separate the seeds from the weeds. You need to allow some ideas to grow in order to see which they are and allow for disruption to occur, but at some point you need to be able to tell the difference.
Fail fast. Some portion of your time needs to be spent on activities where there is no expectation of success, since it gives you the breathing room for serendipitous innovation.
Build for the unknown. Sometimes an innovation intended for one application becomes a success for something completely different, but sometimes it’s just a complete leap of faith to build something for an environment that’s impossible to assess until you get there.
Challenge the conventional. New companies, or those moving into a new field, are often more innovative than those who are existing experts in the field. Hoover couldn’t have invented the Roomba.
Abandon success. If you’re in a position of strength, take a risk and do something completely different that hasn’t been done before.

He told how his son uses the interactive toy builder on lego.com, collaboratively creating toys online with other site visitors, and how there has been a fundamental shift from wanting to protect our ideas to wanting to share our ideas. Not just with today’s kids, either: science methodology, as indicated by trends in Nobel prize winners over the past century, is shifting from individual effort to team effort.

He closed with a quote from Morpheus in The Matrix: “I didn’t say it would be easy Neo. I just said it would be the truth.” So it is with innovation.