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Strategies & Market Trends : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: Thomas Mercer-Hursh who wrote (31926)	9/20/2000 5:09:40 PM
From: chaz	Read Replies (1) \| Respond to of 54805

the challenge here is interfacing to popular packages like SAP and Siebel, for which a number of companies offer solutions, Thomas, or Merlin: It would seem logical, yes/no, that SAP and SEBL are working towards this themselves, ie., if the revenue opportunity is this great ($2b~$5b), why let someone else take it? Are either of you able to speak to this for us? Chaz

To: Thomas Mercer-Hursh who wrote (31926)	9/21/2000 1:07:23 AM
From: sditto	Respond to of 54805

<<a $50B problem with $500M of product sales, i.e., 99% services.>> You've highlighted the fundamental problem with the EAI space today. First, the vendors are offering tools which most companies consider necessary but not strategic and therefore are not typically high margin software sales(compared to applications). Second, EAI tends to be very customized and labor intensive work. This does create attractive revenue streams with high margins for the EAI vendors and many would not be profitable without their services revenue. However, selling people/hours is a business model that does not scale well and has no operating leverage. Additionally, software vendors dependent upon services revenue are then at odds with the rest of the value chain (i.e., the consulting firms who recommend and implement/develop all the software needing to be integrated). The EAI space is beginning to converge with a number of other application spaces including workflow, rules engines, transaction processing and monitoring, application management, and personalization. Companies in the EAI space have the ability to move beyond application integration toward process integration. Anyone wanting to know more about EAI future directions should try to put their hands on some Gartner Group research and check out their thinking on workflow brokers, adaptive applications, and zero latency enterprises.