My Way or the iWay

By Tony Baer

Mention Information Builders Inc (IBI) to any mainframe junkie and the word "FOCUS!" will likely blurt out. The 25-year old, $300m privately held company, has long been virtually invisible outside the mainframe world. It has thrived thanks to a loyal, 2000-strong worldwide customer base whose common need was to make the information in their legacy systems more accessible. Several years ago, a Meta Group analyst characterized the company's product as "viruses," reflecting their ubiquitous presence in data centers.

Besides its legacy system legacy, a key hurdle for the company has been its technology-oriented marketing, centered on a long list of individual products that each solved some unique mainframe connectivity problem. Although its offerings were based on FOCUS 4GL reporting language and EDA (a middleware product making legacy data sources look like relational databases), IBI marketed so many point products that it was often difficult to see the strategy.

The company's recent growth has been driven by its five-year-old data warehousing business, which provided an expanded market for its data access and reporting tools. Data warehousing provided the impetus for the company to release new client/server, and more recently, web-based reporting technologies. But, following past practice, the company's growth was largely driven by return business rather than new customers.

To break the mold, IBI is announcing today the spin-off of its middleware business from data warehousing, the latter of which now constitutes about 80% of its business. The new middleware businessunit, starting with 300 staff and about $65 million revenues, is being called iWay. According to John Senor, president of the new unit and originator of the EDA product line, the driver was the realization that middleware required a different sell, to a different customer, than data warehousing. He terms iWay IBI's "back end" company, with IBI's data warehousing unit being the "front end" counterpart.

iWay will sell enterprise integration. If that sounds familiar, it should, given the emergence of numerous EAI and e-commerce integration vendors over the past 18 - 36 months, and the fact that most Enterprise Java appservers, B2B procurement packages, and other e-commerce applications are now adding ERP and CRM hooks themselves. iWay distinguishes itself from the upstarts by the sheer number of adapters and interfaces that it has built over the years-roughly 120, according to Senor, not counting variations by product version (for example, Oracle 7, Oracle 8i). By comparison, he claims most rivals have at most a few dozen adapters.

The challenge is that middleware alone does not sell-at least not to Wall Street's liking. For instance, EAI player Active Software's recent acquisition by WebMethods was the result of a need to place a solution focus-in essence, generate a real business reason for buying middleware. Sure, virtually the entire Nasdaq has been trashed over the past year, but it's not likely that EAI or similar niche middleware companies are likely to lead the rebound.

Instead, the solution sell remains the key for middleware, because it is difficult to justify tools that link applications just because they are there. Later today, iWay will announce 25 partners, the first time that IBI has heavily trumpeted alliances beyond platforms. Among the announced partners are EAI vendors New Era of Networks and Candle, embedded database developer Centura software; XML database provider eXcelon, and of course, platform and infrastructure heavyweights IBM and EMC. Senor estimates that OEM sales currently account for nearly 40% of revenues, based on last year's results.

By virtue of its history, iWay already has a sizable portfolio of mainframe integration tools in its stable. Its best bet is likely an "iWay inside" embedded strategy that turns connectivity into a utility that other platform and solution vendors, with stronger identities to their customer bases, can resell. And, more importantly, give their customers bottom line reasons for buying connectivity.

 

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