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Terry Cunningham, CEO, Coral8

Terry CunninghamReal-time data is a real big problem. That's the message that startups like Coral8 are trying to solve.

Coral8 makes a complex event processing (CEP) engine, using a SQL-based language to make it easier for developers to write more intelligent applications.

Though a pretty green field, CEP is seeing traction in financial services, RFID , defense and other markets as companies struggle to keep up with the data streaming in and out of their networks.

Other startups in the field include StreamBase, AptSoft and Aleri, while major vendors like IBM  and Oracle  have amassed large amounts of the technology needed for CEP.

Coral8 CEO Terry Cunningham, who sold Crystal Decisions to Business Objects , knows something about building a company from the bottom up.

Cunningham discussed the emerging market for CEP shortly after his company launched Coral Engine 4.0.

Q: What is the genesis of Coral8 and what market forces drew you to complex event processing?

The company was born by our CTO and founder Mark Tsimelzon who discovered when he was working at Akamai that there is a very large need for a platform to build real-time applications.

What Akamai was doing is this edge computing strategy for 15,000 servers all running applications. So that was where he first saw the problem.

I came from the business intelligence space, and so I spent a lot of time dealing with historical data -- data in data warehouses and reporting and querying and analysis on that data. What Mark introduced me to was this notion of real-time data that flows through the pipe that also needs to be analyzed.

Back then, there were a few obvious verticals that had real-time data, such as financials. Wall Street was a big consumer of real-time data and couldn't ignore it. They spent millions and millions of dollars building custom applications to deal with the real-time data, and they've been doing that for decades.

My concern at the time was that it was just too small of a market. Over the last three or four years, what we've discovered is that the amount of real-time data flowing through the enterprise is actually quite massive.

The reason for Coral8 was that there is so much real-time data but no infrastructure to deal with it.

Q: What does Coral8 Engine 4.0 do?

It processes real-time data, and we provide a standard interface called SQL to talk to the engine. We handle the plumbing part and you, as the developer, build the application and talk to the engine through a standard engine called SQL.

The story we tell to the developer is the same one that we told to the developer 25 years ago with the advent of the database and client-server computing, so we're basically just copying it.

The two main messages we communicate to our customers is the ease of development, which is SQL, SQL, SQL. If you're a SQL guy, you'll pick this thing up and you'll be running in an hour. You don't need system engineers showing you how to use it.

The second thing is the scalability. Once you build your app, you've got to know that it will scale to the large enterprise challenges. Can this thing handle the data and the volume that we're talking about? We've spent a ton of time and money building this enterprise capability.

Q: IBM and Oracle are quietly working on complex event processing products. If Coral8 and other startups foster enough market interest, they'll likely increase their efforts.

Absolutely. We're in discussions now with IBM and Oracle about a CEP language, so that at least we can come together as a group and agree on syntax and format. We fully expect them to be in the market some time in the future. This is a major space and they cannot ignore it.

The game we play is to launch early, launch often and get this technology out there and as fast as we can into the hands of people that will influence its success, which is the developer.

Q: Could you find yourself selling another company in a couple of years?

Obviously, this market will consolidate as the customer demand takes off. Keep in mind that for the Oracles and IBMs of the world, $20 million, $40 million, $100 million in revenue for them doesn't really matter. It has to be big enough for them to care.

This is how this game is played: The smaller companies build early market share and validate the market. When the IBMs and Oracles decide they have to own it, they start looking at buying assets.

Q: How big a market is this going to be?

When we look at the market, we look at it in two phases. The first is early adopters and early need.

Wall Street, RFID , click-stream analysis, are what we consider to be the obvious market opportunities that need this technology today. That is a healthy but small market. I can't put a number on it, but when I look back and do a comparison and ask is this bigger or smaller than what I started at Crystal, my view is this is a bigger opportunity than what I started at Crystal.

Crystal turned into a $350 million software company, all on the basis of client-server databases and reporting, so there is obviously enough market today to keep the StreamBase's, Coral8's healthy, profitable and growing.

There is a lot of headroom for a lot of these small startups to make a living in this space today.

Where it gets exciting, an inflection point, is the second phase, where software companies that are thinking about and starting to re-architect their applications, like ERP [enterprise resource planning] vendors that are considering a whole new architecture around event-driven technology.

This will require ERP  vendors to reinvent their applications, with events as a major part. When that happens, this becomes a multi-billion-dollar market.