EAI tools provide an integration framework to link the Internet with back-office operations such as financial systems and front-office operations such as customer service, and they are becoming the nervous system of many enterprise systems. InformationWeek Research's survey of 300 technology managers showed nearly 75% of respondents say EAI is a planned project for their IT departments in the coming year. Estimates for the growth of the market reflect this trend: AMR Research analyst Kimberly Knickle predicts sales of EAI software products will reach $600 million in 1999, up from $450 million in 1998, with a growth rate near 50% for several more years.

But for EAI to continue its growth, it will have to offer users new features and functionality. Ideally, companies want off-the-shelf packages that easily link applications--but that's a tall order. In the past, integration required labor-intensive in-house custom coding. As the year unfolds, companies looking for strong EAI solutions face a growing challenge: Finding qualified people to build these integrated systems. This scarcity of people is one of the forces leading EAI vendors to create more intuitive interfaces and easier implementations.

Users in vertical industries, such as health care and finance, want improved rule sets for applications specific to their needs, so standard decisions or event triggers--such as when one application sends a message or data to another app--will be easier to deploy. Additionally, they want tools targeted at their businesses, so the software doesn't have to be rewritten after they buy it. It's a long wish list, but the idea is to have tools that will let users focus on the business goals behind integration projects--E-commerce, developing a complete supply chain, and improving customer relations and marketing--not the IT process involved in getting there. "EAI allows us to focus on the whats and whys," says John Skranko, VP of systems development at National Securities Clearing Corp., a financial-transaction clearinghouse in New York. "The hows can get worked out later." Vendors are recognizing the trend, and tailoring marketing approaches accordingly. "EAI vendors are getting away from selling products as scalable, robust, and integratable, and are starting to say: 'Here's what it can do,'" says Fred Meyer, VP at EAI vendor Tibco Corp.

To meet these demands, the EAI market itself is in for a change. For starters, vendors--which include Active Software, BEA Systems, CrossWorlds Software, IBM, New Era of Networks (Neon), TSI Software, and Tibco--are moving beyond software development and toward establishing themselves as the backbone of business over the Internet.

For example, IBM--which dominates the base functionality level of the EAI messaging middleware market with its MQSeries--has co-branded EAI software developed with Neon. Neon, in turn, has formed partnerships with BEA Systems, BroadVision, Microsoft, and PeopleSoft. CrossWorlds Software Inc., as well as BEA and IBM, uses Neon's rules formatter and TSI Software Inc.'s transformation toolset.

Solar Turbines Inc., a billion-dollar, wholly owned subsidiary of Caterpillar Inc., is beginning the integration process. As the business grows, Solar Turbines needs to connect its myriad internal systems with best-of-breed apps from multiple vendors, including Baan 5.0 for ERP, PeopleSoft for HR and payroll, Clarify for customer-relationship management, Hyperion for budgeting, and a custom program for proposal generation.

For instance, until the company integrated its systems with EAI software from CrossWorlds last year, it was running each package as a standalone application--so information in the ERP system was not usable in the CRM system. Under the new plan, Solar Turbines--with an average order size of more than $1 million--will integrate about one app a month starting March 31, according to John Goss, ERP director. Goss is also looking at the Internet as a way to connect trading partners directly to Solar Turbines' order and inventory systems. "Chevron is one of our biggest customers. You don't just show them a catalog of products," he says. But to make that system work, security also will become an issue--and that's an area many EAI vendors aren't tackling yet.

Until all the pieces fall into place, Solar Turbines, like many manufacturers, uses electronic data interchange to communicate with its biggest customers. But while the data formatting in EDI documents is well defined, its cost can be prohibitive for small companies. Coming to the rescue is the Extensible Markup Language, an open, free, Internet protocol that most leading EAI vendors and users are eagerly eyeing.

Seals GmBH of Germany, which calls itself a "data intermediary," is embracing XML. The company, spun off recently from Lufthansa Air Plus, uses TSI Software's TSI Mercator for a service that lets companies send invoices securely over the Internet via XML. The XML document is converted by Mercator into virtually any format needed by the receiving party. "We think we're the only company doing this right now," Seals CEO Marcus Laube says. Laube is looking at TSI's newest acquisition, Novara, for its Web app integrator, which will let the recipient pick the document format it wants to receive on the fly.

National Securities Clearing Corp. has had a secure intranet for 23 years, and it has become the largest financial-transaction clearing house in the United States. NSCC recently acquired EAI tools from Neon to edit, validate, reformat, and redistribute information in its insurance processing services division. Neon's focus on the financial industry has resulted in specific business-rule models and tools, including a library of financial document formats for companies such as NSCC. VP Skranko says the initial phase of integration in NSCC's insurance processing service division was built in-house to handle positions, commissions, and pricing for independent agents. The decision to buy vs. build came about partially because NSCC realized it could reuse connections built with Neon and "incrementally add to the core integration," Skranko says.

The NSCC's first integrated application project using Neon's MQIntegrator went from design to deployment in four months last summer. Skranko would like to see EAI products develop better tracking and monitoring tools and more integrated Web components for his industry.

Rob Eamon, systems analyst at Idaho Power in Boise, Idaho, used Active Software adapters to improve the energy company's customer automated payment-protection plan and payment insurance. "The modeling tools really helped, but I hope [EAI vendors] can raise the level of abstraction even higher," he says. Over the next year Eamon would like to see a desktop "dashboard" that contains the information any worker needs--from field level to upper management.

Although NSCC doesn't have to bet its business on EAI software, companies trying to leverage the Web do. Juniper Networks Inc. in Mountain View, Calif., makes IP routers for fiber-optic storage area networks. Using Active Software's EAI and E-business integration software, the company created a Web-ordering system that is integrated with its customer-service operation. Juniper IT architect Shauna Milton says the company implemented components incrementally, starting with master-file synchronization, then moving to transaction-based message transfers. As a result, Juniper expects to reduce IT costs by 2% of revenue annually--about $1.3 million, based on sales of $66 million this year. Milton says the internal enterprise is finally well-integrated. "Now we're going to our contract manufacturers [to address] business-to-business integration," she says. If the company can use the Internet to handle processes now done by hand, it will save time and money and make supply-chain management go more smoothly.

No matter which new EAI features come first, this is certain: As IT initiatives become less about moving data and more about improving the business practice, integrating enterprise apps--both inside and outside a company--will take center stage.