December 6, 1999

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ERP Vendors Move Into The Integration Market
Companies offer products to ease data flow and stay relevant in E-commerce

By Alorie Gilbert

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s the pressure mounts for companies to reap immediate gains from mergers and acquisitions, expand the electronic exchange of information with trading partners, and deploy best-in-class business applications, enterprise application integration tools from vendors such as New Era of Networks, Software Technologies Corp., and Tibco have become hot commodities. They've also become a hot target, as the major enterprise resource planning software vendors make a play for the EAI market.

Oracle recently introduced a set of application-integration tools designed to let Oracle ERP applications talk with legacy systems and software from competitors such as SAP. The package includes an application adapter development kit, a messaging server, and a business-process workflow engine.

Baan OpenWorld Integration Framework, unveiled last month, includes application adapters and a messaging server that transforms data into standard formats such as the Extensible Markup Language and Microsoft's Component Object Model, and uses common transport mechanisms such as IBM's MQSeries and MSMQ messaging queues. The package is partly the result of years of internal development efforts to integrate software the vendor acquired from Aurum, Berclain, Caps Logistics, and Coda Software. Baan EAI will be available as a separate product in the first quarter of next year, as will BaanERP 5.0c, an upgrade of its ERP suite that uses the messaging system to tie in its customer-relationship management and supply-chain management suites.

With the ERP market growth in a slump, it's not surprising that Baan and Oracle are seekiing new opportunities. Enterprise application integration license revenue is projected to double annually from $900 million this year to $3.6 billion in 2001, according to Gartner Group.

But what do ERP players bring to the integration table that others don't already offer? Baan user Rick Lindenberger, director of IT planning at Diebold Inc., a $1.2 billion automated teller machine manufacturer in North Canton, Ohio, says it stands to reason that Baan can offer more functionality for integrating its own applications than independent vendors do. And that's important to a company in which ERP is the main software offering. "If you've chosen Baan as your core set of applications, by nature you'll be integrating more applications with Baan than with any other system," he says.

For companies with large investments in ERP software, integration tools from ERP vendors are an intriguing proposition. Diebold uses MQSeries to integrate its Baan system to legacy mainframe applications, but it would consider using a Baan integration tool for future projects.

Many analysts say ERP vendors simply can't afford to ignore integration if they want to remain relevant in an Internet-driven, E-commerce world, which by its nature requires that data flow easily across a variety of computing environments. "The future is in building links between companies, not just integrating applications inside companies," says Dan Scholler, an analyst with the Meta Group.

That's key for companies such as PlasticsNet.Com, a business-to-business digital marketplace that coordinates the trading of plastics between 200 suppliers and 5,000 plastics processors. The Chicago company uses J.D. Edwards & Co. order-management and accounting applications as a cornerstone of the technology infrastructure that lets it process purchase requisitions and electronically route them to multiple suppliers.

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