Lawson Software Inc. is linking the future of its application sales to IBM's middleware. Lawson will standardize its financial, human-resources, and supply-chain-management software to run with IBM's WebSphere product line and optimize their performance in the IBM environment.
IBM and Lawson have been business partners since Lawson's 1975 founding, and Lawson's applications got their start running on the IBM AS/400 server. Lawson applications now run on a variety of application servers, such as BEA Systems Inc.'s WebLogic and Oracle's Oracle Application Server. That will still hold true, says Dean Hagan, Lawson's executive VP of development, but its applications will perform best as services if they run in IBM's middleware environment.
"We can create services-oriented architecture while creating a simpler environment. We will offer the lowest total cost of ownership," Hagan said at an IBM-sponsored customer symposium on services-oriented architecture in San Francisco on Wednesday. The two vendors will also build middleware/application combinations geared for vertical industries, such as retail, health care, and financial services.
Lawson typically sells to small and midsize businesses that are not candidates for full-scale SAP or Oracle/PeopleSoft application suites. But smaller businesses "have the same business processes" as large businesses and are looking for an IT architecture that will automate those processes. That will be built around services-oriented architecture, where operational applications can be called as services for different processes, Hagan said.
IT staffs have historically automated the back-end transaction-processing part of business processes and then "poured cement over it," said Steven Mills, senior VP of IBM's Software Group and host of the SOA symposium. Such function automation has become a stumbling block to automating larger business processes and generating horizontal links between departments that reflect how a business actually operates, he added.
The IBM/Lawson alliance will give Lawson customers the chance to use their applications as building blocks for different business processes. With a services-oriented architecture, financial and other applications can be accessed through a standard interface.
The IBM/Lawson move appeared to be a counterweight to Oracle's stand that applications need to be tightly integrated with database and middleware systems to perform effectively. This year, Oracle acquired PeopleSoft and Retek Inc. to expand its application offerings and compete as a full-bore application vendor.
"IBM doesn't stutter about what its strategy is. Its strategy is middleware, not applications," said Hagan, when asked why it's partnering with IBM. Although both Oracle and Microsoft also offer middleware platforms, application vendors such as SAP and Lawson have moved closer to IBM over the last few months because Oracle and Microsoft have their own application-selling ambitions. In April, IBM brought out a version of its DB2 database that it said is optimized to operate with SAP applications.
Also at the symposium, Fireman's Fund Insurance Co. said it has given IBM a $94 million contract to modernize its application development and maintenance. IBM over several years will reduce the total number of applications from 500 to 143, said the company's CIO, Fred Matteson.
Like other property and casualty insurers, Fireman's Fund has generated multiple legacy systems for policy administration and billing as the cyclical insurance industry reaches peaks of expansion, then contracts. IBM will use a services-oriented architecture approach to limit the number of applications and reuse their functionality so new insurance products can be brought to market quickly during expansionary phases, Matteson said.
"We will 'Webify' the connections between business products and legacy systems," Matteson said. "It helps us to get to market faster" during expansions.