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EAI: Infosys moves in - Views on News from Equitymaster
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  • Oct 4, 2001

    EAI: Infosys moves in

    Corporates have spent huge fortunes on various kinds of solutions like ERP (enterprise resource planning), SCM (supply chain management) and CRM (customer relationship management). In many cases these solutions are ‘islands of information’ i.e. one system cannot talk or exchange data with the other. However, for meeting the information need of an organisation in real time all these solutions have to be seamlessly integrated. If an order is accepted through the CRM system, this information has to be passed on to the system that manages the production say the ERP system. The faster this information exchange takes place, the more the organisation stands to gain. Therefore, there is a need of a translator that helps these systems in communicating with each other. This process of integrating disparate systems is known as ‘enterprise applications integration’ or EAI.

    It was in the mid-nineties that organisations adapted to enterprise resource planning systems. The process of implementing CRM and SCM solutions and getting web enabled is even more recent. Thus the markets for EAI are in a nascent state and not many organisations understand middleware integration (EAI). With an average EAI project costing about US$ 0.5 m (Rs 23 m), organisations are undoubtedly cautious when it comes to implementing these projects. Infact according to Informationweek, top five vendors in the area (identified by Forrester Research) have sold licenses worth just US$ 336 m (Rs 16 bn) in the recent years. The top vendors include Tibco, Vitria (these two accounted for 72% of the market share amongst the top five vendors), CrossWorlds Software, SeeBeyond Technology and webMethods.

    Top Vendors' EAI Software
    Company Product Price (US$ m)*
    Vitria Technology BusinessWare 0.5 to 0.7
    Tibco Software ActiveEnterprise Starting at 0.1
    SeeBeyond Technology e*Xchange eBusiness Integration Suite 0.4 to 0.5
    CrossWorlds Software Crossworlds 0.5
    webMethods webMethods Enterprise 0.7

    These are average prices for software and deployment, unless otherwise indicated
    source : Informationweek.com

    But one of the downsides of EAI is that there is a significant amount of complexity involved and therefore, there is a need for someone to meticulously monitor that the systems are working fine.

    Companies like Infosys are looking to cash in on this opportunity. Infosys recently announced a strategic alliance to provide system integration of TIBCO's entire product line and development and support of essential EAI adapters. Infosys is also planning to use its expertise in legacy systems and will establish an EAI competency center dedicated to building and supporting up to 100 application adapters. These adapters will enable total integration of legacy, ERP, CRM, and database systems including SAP, Siebel, PeopleSoft and Oracle.

    According to Gartner, the size of the EAI market will reach US$ 8.7 bn (Rs 3,580 bn) in 2005. Thus, there is a huge market opportunity for the Indian software companies. These projections seem realistic, as there is no way to work around EAI. If organisations want to reap the full benefits of all the money they have spent on solutions they need to have these solutions integrated. The current global slowdown however, is likely to be a barrier for the EAI to catch on, atleast in the short term, as companies are likely to wait and watch before they spend more on technology.



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