Iona Moves To The Enterprise

Supplier of object-oriented middleware seeks to prove its products are scalable

By Nick Wreden

ona Technologies plc has been very successful selling its object-oriented middleware for the past six years. Now, with the expected convergence of that market, the deep-pocketed Iona will find out if it can duplicate its success in the enterprise market.

"Iona is on the right track, but no one is there yet," says Tal Elyashiv, IT director at Capital One Financial Corp., a $2.5 billion credit-card company in Falls Church, Va., and an Iona customer. "No ORB [object request broker] product is easily scalable to a large environment, nor do they handle asynchronous messaging well. What's needed are components capable of managing and deploying a large infrastructure, complete with built-in fault-tolerant capabilities." Elyashiv also predicts that future interoperability solutions will incorporate the capabilities of ORBs, messaging, and transaction processing monitors.

Recognizing user demands for interoperability as well as security and management capabilities that are beyond the reach of today's ORBs, Iona plans to unveil its Orbix object transaction monitor at the end of November. According to Annari O'Toole, Iona's co-founder and chief technical officer, the product is the culmination of two years of development work. It will include stronger systems management, fault resilience, database integration, and an improved ability to handle transaction integrity across multiple databases, he says.

"Like our customers, we are maturing in this arena," says O'Toole. "But Orbix will continue to remain way ahead of everyone else, thanks to our focus and our understanding o f every nuance of what it takes to make applications work together."

Adds Mike Stanek, senior VP and research analyst in San Francisco with investment banker Lehman Brothers: "Iona is in the process of becoming as much a corporate standard as Dell and Compaq. To me, it's the clear leader in a market that is still in its earliest stages."

Since 1993, when Iona first shipped Orbix, a C++ implementation based on the Object Management Group's Corba standard, the company has grown from a handful of employees in Dublin, Ireland, to 420 at eight locations worldwide. The company went public in February following a banner year: It posted sales of more than $21 million in 1996. In the first six months of this year, revenue grew 142%. Next year presents an even brighter picture, according to financial analyst Stanek: He predicts Iona's revenue will reach $81 million.

Net Access
Adding to Iona's product line is OrbixWeb 3.0, introduced in September, which at $799 includes features based on Sun Microsystem s' Java programming language. These features allow easier access to back-end data stored on Unix, Windows, and IBM MVS servers over the Internet. Corba-COM, Iona's 18-month-old, $2,500 Corba/Distributed Component Object Model integration product, supports Visual Basic, Visual C++, Delphi, PowerBuilder, and DCOM. But Iona's lead product continues to be Orbix, which is priced between $2,500 and $6,500, depending on the platform.

"We have a broad religious approach to technology and try to get as many technical sects into our church as possible," explains O'Toole. "Our products enable Cobol apps on the mainframe to talk to Java apps in browsers as well as C++ apps on Windows NT. We have simple, coherent solutions to making incompatible systems interoperate."

Iona's success is due partly to good timing and astute market understanding. O'Toole and two other researchers at Trinity College in Dublin founded the company in March 1991, after recognizing they could turn their academic studies into a viable commerci al product based on Corba specifications. Iona was the first to market the equivalent of ORBs in a box, which let developers link disparate appli-cations quickly. The partners priced their technology competitively to entice developers to try Orbix. Iona estimates as many as 20,000 developers worldwide have used it.

Finally, Iona has stayed focused on maximizing the functionality of ORBs by supporting almost all the Corba services, incorporating new standards almost as soon as they are approved, and making sure its product runs on a wide range of platforms.

Tough Start
Like many startups, Iona had some rocky times. Credibility was a real problem until it established U.S. headquarters in Cambridge, Mass. And early on, limited cash flow forced the company to scrimp; once it even reformatted diskettes OMG distributed with Corba specs, relabeled them, and sent them to Orbix customers.

Today, managing growth is among Iona's perennial dilemmas: Iona doubles in size each year, the equivalent of taking over a similar-sized company every 12 months.

"From a marketing standpoint, Iona is well represented within Global 2000 companies," observes Mike Kennedy, VP of advanced information management strategies in Burlingame, Calif., for the Meta Group.

Customers such as Boeing, Nokia Telecommunications, and BellSouth have been attracted by Iona's strict adherence to Corba standards. Boeing, the $48 billion aeronautics company in Seattle, has used Orbix since 1995 as a key element in its DCAC/MRM (define and control airplane configuration/manufacturing resource management), a comprehensive business process improvement program to reduce cycle times by 50%. Orbix links applications from Baan, Cimlinc, Structural Dynamics Research, Trilogy, and other vendors that run on hardware from Hewlett-Packard and Sequent.

"We chose Orbix because it was pure Corba-compliant, while competitive offerings had proprietary elements incorporated," says Van Cleland, application integration project manager for Boeing. "We'r e building DCAC to last for many years, and we didn't want to get locked into any proprietary systems. Iona has always had a complete commitment to Corba compliance, and it seems to be in the forefront of incorporating new standards."

But while Iona has succeeded in the middleware market, its future is rife with potential problems. The ORB market is poised for skyrocketing growth, from $136 million in 1997 to a projected $817 million by 2000, according to Standish Group International Inc., a consulting firm in Dennis, Mass. But due to stepped-up competition, Standish Group predicts Orbix's share of the ORB market will erode from 26% this year to 12% in 2000. Competition is coming from IBM, Microsoft, and Oracle, as well as from new vendors such as Tibco Finance Technology in Palo Alto, Calif., and Open Horizon in San Francisco.

Crossing The Chasm
Competitors are betting on whether Iona can nimbly cross the chasm to a market guided more by enterprise requirements than by developer desires. "It was a huge change from marketing to developers with small projects to selling to IT executives involved in deploying systems for the enterprise," says Jeri Edwards, VP of strategy and product planning for the $62 million BEA Systems Inc. in Sunnyvale, Calif. "The big question is whether Iona will be a niche player for developer tools or whether it can manage the shift to the mission- critical enterprise, where it has little experience with the different deployment, pricing, and support issues."

Other companies are gearing up for a more collaborative approach, purposely avoiding Iona's Lone-Ranger stance. Visigenic Software Inc., a $25 million competitor in San Mateo, Calif., has recruited partners, including Informix, Novell, Oracle, and Sybase.

"Up to now, all the ORB vendors have sold tens of millions of licenses. So it becomes a resource and bandwidth issue," says Mark Hanson, Visigenic's president and chief operating officer. "How many accounts can Iona statistically call on around the world without h arnessing the resources of larger partners? If I were them, that would scare me."

Adds Karen Boucher, a Standish Group VP: "Iona started by concentrating on developer sales. That gave them great market share, but enterprisewide middleware standards are determined from top management down. That's why you don't find a lot of enterprises [that] have settled on Orbix."

Iona's O'Toole scoffs at this criticism, citing the interoperability successes of Orbix's customers. "We've been successful because we've made our customers successful with this technology, not because we've given away technology," he says. "We will work with a small number of key vendors who will add value and help grow their businesses based on what we do."

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