Lustratus produces an annual set of predictions for the infrastructure software marketplace. These predictions are qualitative rather than quantitative, outlining what Lustratus sees as the most important trends and likely focus areas for the market over the coming twleve months.

1. insight™
2011 Market Predictions for
Infrastructure Software
A new year means a new look ahead from Lustratus to the world of infrastructure
software and related hardware. 2010 saw a significant upswing in IT expenditure
as the credit crunch restrictions started to lift, and Lustratus sees this carrying
on through 2011, although confidence is still not back to pre-recession levels.
Lustratus predictions for 2011 are:
Lustratus predictions for 2011
• Business rules will continue to increase in popularity
• Cloud computing projects will pause for thought
• SOA adoption will continue although with a lower profile
• The market for open source integration tools will return to growth
• Appliances will see strong growth, particularly for integration needs
Before going into the 2010 predictions in more detail, it has become traditional
for Lustratus to score itself on its predictive powers for the closing year.
Lustratus 2010 forecast performance
Recapping, the Lustratus forecasts for 2010 were
• Business alignment and control (BPM, BRMS, Events) will continue to grow
• Internal and Office Clouds will grow in acceptance
• Security will be a growing area, particularly as Cloud picks up
• Integration makes a comeback
• Software patent suits will surge
Once again, looking at how 2010 ended up, the Lustratus predictions appear to
have been pretty accurate. The first prediction was spot on, with the overall BPM
market growing at anywhere between 15-25% depending on the market definition.
The big news was probably IBM acquiring Lombardi, which has strengthened its
hand, but Oracle, Software AG, Pegasystems and a host of smaller, boutique
BPM companies also saw strong growth.
The Cloud situation was a little more chequered. The level of interest in Cloud
Computing has remained high all year, and as predicted almost all of the attention
(at least within larger companies) has been on internal clouds or on desktop or
office-based Clouds where cloud facilities are used to store or archive desktop
information and applications. But this is a little way from the Lustratus prediction of
‘acceptance’, since the number of projects that have been implemented in this
area remains low.
The security prediction was a bit of a ‘gimme’. Security has never dropped in
importance, although it has definitely been true that concerns over security in
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2. insight™
the Cloud Computing area has definitely held back projects. The most positive
aspect supporting the fulfillment of this prediction has been the rapidly growing
interest in appliance-based ‘cloud gateways’ where the appliance can manage
security to and from the cloud. So in summary, this prediction was probably
accurate enough, but was really a rather obvious one.
Integration definitely made a comeback in 2010, although in truth Lustratus What are business
believes it never really went away. However, 2010 saw a lot of attention being rules?
given to issues like how to link enterprise and cloud resources together, and
how to integrate different parts of business processes more effectively with each In IT terms, business rules
are simple non-technical
other. Interestingly, there are also reports of strong demand for modernized file
expressions of the rules that
transfer solutions. This may surprise some, who may feel that file transfer is so govern operational process-
old that it died years ago, but the fact is that many companies still use a consid- ing.
erable amount of file transfer to integrate operations, and more modern file
transfer approaches with better management/scheduling/security/performance The idea behind a business
have proved attractive. rules solution is that business
users should be able to de-
Finally, there were indeed some very high profile software patent trials in 2010, fine and modify these rules,
settling for multi-millions of dollars in a number of cases. Perhaps the most dynamically changing the
exciting was the i4i case against Microsoft, which resulted at one point in way the IT system operates
without any programming.
Microsoft being ordered to stop shipments of Word. The much-touted patent
suit of Juxtacomm vs just about every software company in the world over data
exchange turned into a bit of a damp squib though, with minimal settlements
from companies such as IBM, Microsoft and Informatica. Although a second
round of suits have been put in place, since IBM in particular makes billions from
data integration it seems unlikely that any of the ‘second-string’ firms will settle
for much. Importantly, however, the US may finally be slamming down the
shutters on the so-called ‘patent trolls’ that have been driving a lot of the legal
activity. As part of its appeal against the $200M+ award to i4i, Microsoft has
banded together with a range of software companies to take the issue to the
Supreme Court, and at the end of 2010 the Supreme Court agreed to hear the
appeal. This suggests that shooting down patents will be made much easier,
particularly when it is obvious to all that the patent should never have been
awarded anyway.
In summary, Lustratus hit the mark in all of its predictions, although to be fair
the Cloud Computing marketplace has not advanced to the extent Lustratus
expected.
Lustratus 2011 predictions
Business rules will continue to increase in popularity
To some extent, this forecast continues on from the 2010 forecast on the growth of
the whole BPM/Events/Business Rules market. However, the reason for zeroing in
on Business Rules within this sector is that the attraction of business rules is be-
coming clearer to executives responsible for funding IT projects. Specifically, the
two key benefit areas are emerging as business agility and compliance. Lustratus
has been tipping business process management (BPM) for a number of years, and
this will still be a strong area, but the attraction of business rules is that it may not
be necessary to get all processes into a BPM model to gain advantages. Business

3. insight™
rules can be set up specifically for the key areas of business control, and these rules
can be gathered together in a simple, readable set of controls for the business. It is
therefore easy for business users to adjust these rules to handle new requirements,
but it also provides an ideal summary of business compliance to regulatory or cor-
porate requirements.
A couple of examples might help. A supplier might want to put in place a loyalty What is Cloud?
program that assigns a discount level to a customer based on volume. A business Cloud Computing is a utility
rule would read something like “If customer volume > 1M units, then add 10% to -based model of operations
the discount”. Now, if the management team decide they need to put more incentive where users can call up
in place for the first quarter it is simple to change this rule to specify 15% as the resources from a shared
earned discount, and then change it back after the first quarter. pool as needed, in a self-
service fashion and with a
Alternatively, a manufacturer may be required through regulations to spread risk by usage-based accounting
ensuring that no supplier controls more than 20% of the supply for any one part. A model.
business rule could be set to say something like “If purchase order to this supplier
Resources could be IT
takes overall volume beyond 20%, reject the PO”. It is now a simple matter for a infrastructure, an application
compliance officer to check this rule periodically to ensure that regulations are environment or even a pre-
being properly applied. packaged application.
These resources may reside
One reason business rules are suddenly becoming a much more active area is that internally, externally or both.
the vendors providing business rules engines such as IBM, Oracle, Software AG,
SAP, TIBCO and Pegasystems are doing a much better job of supporting the use
of legacy applications and code as part of business rules. This usually involves
wrapping the legacy code up so that its functionality can take its place in the rele-
vant rules, but this enables a lot more companies to look at applying business rules
to their current IT implementations.
Cloud Computing projects will pause for thought
As Lustratus tipped last year, 2010 was a year in which a lot was written and
spoken about Cloud Computing. Hundreds of vendors jumped into the emerging
Cloud market, all claiming that Cloud Computing was going to totally change the
face of modern IT. Many companies found themselves looking at Cloud and
wondering whether they should be getting involved.
However, as the year went by, user companies began to realize some important
issues around Cloud. The first was that while an internal cloud that remained
within the corporate boundary might take virtualization a little further, external
clouds brought with them a whole load of uncertainties. Security is clearly a
worry for many, with the thought of putting corporate data outside the firewall
being anathema to many senior executives. There was also a lot of churn in the
Cloud marketplace in 2010, with a number of cloud suppliers going bust.
But perhaps most importantly, many companies have started to realize that de-
spite what the hype might claim, the Cloud Computing model does not suit all
types of applications. While it might be a very attractive option for projects like
virtualizing a swathe of vanilla Microsoft Office laptops into a cloud-based model,
where the applications and data can live in the Cloud, running business applica-
tions in an external cloud creates a whole host of problems.

4. insight™
Numerous factors need to be taken into account, like how often an application
needs to consult corporate databases, what type of operating environment it
requires, whether it is handling sensitive information, what the local regulations
require in terms of location of data and many others. As a result, Lustratus pre-
dicts that 2011 will be a year of pause. After an initial surge of excitement,
companies are going to step back and give the whole Cloud Computing model
more thought. Research will be needed to look at workload candidates for
What is SOA?
Cloud, analysing what the applications do, what resources they need and what SOA is a model of opera-
sort of performance, availability, reliability and security they need. tions where programs are
delivered as business
SOA adoption will continue, although with a lower profile services to deliver specific
pieces of business function-
During 2010 there was little spoken about service-oriented architecture (SOA). This ality.
had been very much in the fore of market chat for a number of years, but in 2010 it
was displaced by discussions about BPM and Cloud. So does this mean SOA is These services can be
now out of favour? accessed from anywhere in
the network, and can be
In fact, the lack of chat around SOA is really just a symptom that the service- combined and recombined
oriented concept has matured to the point that many companies just assume that to deliver different business
functionality quickly and
it is a best practice and therefore it needs little further discussion. Admittedly, many
easily.
companies are being somewhat selective about their SOA adoption, perhaps de-
ciding to make do with an ESB and web services and not taking on the full-scale
SOA architectural revamp. But the SOA concepts are now firmly embedded in the
IT psyche. It must also be remembered that SOA concepts are a fore-runner to
technologies like BPM, Rules and even to some extent cloud-based applications.
Anywhere that business integration is required, SOA will be there or thereabouts.
The market for Open Source integration tools will return to growth
Back at the start of 2009, when the credit crunch was at its worst, Lustratus
predicted that Open Source projects would enter a level of hiatus. The reason-
ing was that at a time when everyone was trying to reduce people costs, the
idea of taking on Open Source offerings which by definition tend to need
‘putting together’ was suddenly highly unpopular.
However the situation has been steadily improving over the last 12 months, to the
point where Lustratus believes companies are once more prepared to consider
Open Source offerings as a way to save costs. Normally the popular areas for
Open Source tend to lag the hype curve, and the integration tools area is a
great example of a more mature area where Open Source has a real chance of
making inroads. All companies still need to handle integration needs, but the
technological maturity in this area makes it ideal for delivering a commoditized,
open source version of the tooling. Companies like Talend, MuleSource, JBOSS
and FuseSource have established offerings, and with VMWare’s backing Spring-
Source could become another contender.
Of course, mature technology in itself is not enough to drive an open source
market segment. A major inhibitor to open source is the perceived risk that the
adopter is taking on. What about support? What about new requirements? But
in the integration tools space there are already many companies either supplying
open source offerings or providing support and implementation help around
them. Open source will never replace the large-scale integration vendors and

5. insight™
projects, but the presence of such commercially-based activity helps to make
the overall market fertile for open source initiatives. Having plenty of knowledge,
experience and best practices already available around the technology helps to
make the open source approach viable and mitigates the risk.
Appliances will see strong growth, particularly for integration needs
The recession at the end of the last decade has had some lasting effects on the
What are appli-
IT landscape, and one that is not going to go away any time soon is the desire ances?
to simplify. IT infrastructures have got increasingly complicated as they have Appliances are dedicated
spread and become more inter-connected, and this drives up skills and people servers designed to handle
costs to support, maintain and enhance the infrastructure. But the recession specific functional chal-
brought a high level of focus onto these costs, and companies are continuing lenges. They are usually pre-
this focus even though most economies have more or less returned to growth. loaded, only requiring con-
Integration has continued to become more and more prevalent as companies figuration on installation.
look to streamline and automate processes across the value chain, but integration
Appliances are delivered in a
places considerable demand on the underlying infrastructure and contributes self-contained hardware form
significantly to the level of complexity. factor, delivering hardened
security and hardware-based
One response to this need for infrastructure simplification is the appliance performance assistance.
model— package up some of the infrastructure functionality in a pre-packaged
box and just connect it up. This offers a level of standardization and uniformity
across the enterprise while at the same time delivering a solution with a strong
security profile. Within a network of integrated systems, for example, an appli-
ance may make a lot of sense as a gateway between different domains. Cloud
computing offers another obvious scenario for a secure and robust gateway
from the enterprise network into the Cloud.
But it is really the simplicity that is driving the appliance market. Not only do
appliances offer pre-built solutions, but by their nature they are pretty tamper-
proof, and offer only very limited opportunities for modification. Often, appliances
have a proprietary operating system environment that does not allow program-
mers access to the functionality, with configuration options being the only level of
customization offered. This helps to maintain uniformity and reduces the need for
support staff.

6. Summary
Economies have started the long path to recovery in 2010, and although 2011
may still be quite a rocky ride, the path is likely to continue to be in an upward
direction. However the days when companies will leap into uncharted waters in
the hope of gaining some sort of advantage are all but gone, at least for the
moment. Instead there is a much more pragmatic air around IT projects and
purchases.
The focus on tying IT projects to specific and detailed business aims will continue,
driving interest in areas such as Business Process Management (BPM) and
Business Rules. Rules in particular provide a quick and easy way for businesses
to become more agile and to seize more control. But focus will also continue on
ways to integrate different parts of the business and the value chain more closely,
to squeeze savings out of IT operations and to reach higher levels of process
efficiency and effectiveness. Service-oriented architecture will continue to have a
lot to offer in this area.
But the pragmatic focus will also cause people to need to be really sure before
embarking on a potentially costly new project. Perhaps the clearest example of
this is likely to be Cloud Computing. While everyone is talking about it, and
many people really like the idea of ‘utility computing’ where a company only
pays for what it uses, businesses are not just going to blindly rush into it just
because vendors or market ‘experts’ say it is the right thing to do. After the
initial furore around Cloud Computing in 2010, 2011 is likely to be a year of
more sober reflection as some of the issues such as security and selecting the
right workloads for cloud rear their heads.
Having said that, as more technology areas reach the required level of com-
moditization, open source is liable to return to the agenda. After the hiatus of
2010, when companies did not have the people to spare to assemble open
source-based solutions, companies are likely to drift back to the attractions of
replacing commodity software products with open source ones. Integration is
one such area which is likely to see increased activity, with the technology
...insight
2011 will be the year of ’simplify, simplify, simplify’ in the IT space. Business
users look for simple rules to control operations, companies strive to simplify
and streamline processes through better integration and appliances offer a
new approach to significantly reducing infrastructure complexity and costs.
The companies that succeed will be those who can see past the media
hype, and focus in on pragmatic measures to make things simpler.
reaching a bit of a plateau after 15-20 years of major advances.
But finally, the buzzword in IT organizations for 2011 is going to be
‘simplification’. Complexity has reached the point where it
just costs too much and inhibits movement. The emergence © 2011—Lustratus Research Ltd. Customers who have purchased this report individu-
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