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Web Services Brightens Middleware Spotlight

Middleware is gradually coming back from a few rough years, and it got some big help from Web services.

Application integration and middleware (AIM) includes software used to integrate, connect or run applications. Middleware includes application servers, portals, message-oriented middleware (MOM) and transaction processing systems. The market expanded to $6.7 billion in 2004, according to data from research company Gartner, and Web services is expected to help the AIM space grow 5.2 percent to $7 billion in 2005.

IBM continued its reign in the top slot for the AIM market worldwide, with a 37.2 percent market share on 2004 revenues of nearly $2.5 billion. Big Blue's closest competitors are BEA Systems and Fujitsu, at 7.2 percent and 6.3 percent, respectively. Oracle, Microsoft and others trail.

IBM's dominance can be attributed to its WebSphere middleware line, which includes application and business integration servers, portals and its CICS transaction platform, said Gartner analyst Joanne Correia.

Correia said AIM buyers fall into two camps. While historically the market has been about integrating existing systems, she said more corporations are looking to build new ones.

This has opened new revenue opportunities for software lines that purport application integration via distributed computing models like Web services . This includes IBM's WebSphere, BEA Systems' WebLogic, Microsoft's .NET, SAP's NetWeaver and Oracle's 10g brands.

Web services are having an impact on the fortunes of certain products, the analyst said. While the CICS and BEA's Tuxedo e-commerce platforms are legacy systems many experts believed to be on the decline, Correia said they have enjoyed a resurgence after both companies updated them to run Web services for distributed computing chores.

Web services won't substitute for legacy integration issues, but they will solve the ability for users to integrate as they build things going forward. For that reason, Web services could impact legacy platforms, such as CICS and Tuxedo, Correia said.

"We see Web services cutting the cost of integration almost in half by 2008," she said. "Instead of $100 for the first project and $100 for a second project, the second project will cost $75 because of reusable components. The cost of people also starts to go down."

Correia said the AIM market has been gradually evolving to integrated offerings, called application platform suites (APS) for the last few years, as customers have expressed a desire to buy everything at once. Examples of an APS include Oracle's 10g and BEA's WebLogic platforms. But adoption of these platforms has been slow due to cost concerns.

"While the customer wants the value of the integrated component, because of budget constraints, they are only buying pieces," Correia said. "Or they might already have an app server, so why should they pay for the app server again? So we still estimate APS as a suite phenomenon for less than 20 percent of the sales that are out there."

Accordingly, many customers are picking up spare parts, a portal here, an enterprise service bus (ESB) there.

Correia predicted the AIM market will continue to grow at a slow but steady pace for most segments, because of the widespread need to bundle middleware into other niches where a message-oriented technology works well. These fields include enterprise applications and mobile and wireless suites.

Gartner issued the report to whet the public's appetite for its Gartner Application Integration and Web Services Summit next week in Los Angeles where Correia and other analysts will provide more insight into the future of the AIM space.