Circling The Complex Event Processing Wagons

Events in business processes happen, and then the rest of the high-tech
world scrambles to catch up with them.

But wouldn’t it be nice if your company had technology that could react to
business process events as they happen to make more informed business
decisions?

This is why startups are banking on complex event processing (CEP) to
further capitalize on the explosive growth in RFID , as well as
in financial services, defense and other industries.

CEP is an emerging category of software that conducts real-time queries on
high-speed data from systems, databases and applications.

The technology then applies rules to pinpoint patterns and trends that would
normally go unnoticed by IT administrators.

Combing through legacy data can help predict what might happen in the
future. In the case of RFID, it can be used to scan products to rapidly
gauge inventory in a supply chain.

Quick scanning and inventory checking can yield competitive advantages for
businesses trying to pump out a mass quantity of a quality product.

CEP might also spot threats or systems failures, making it an ideal candidate
for fraud detection and other types of security measures, said Gartner
analyst Roy Schulte.

“The benefit there is situational awareness,” Schulte said. “You can extract
more information about your environment by applying rules to a series of
events. From that, you can derive a better understanding of what’s happening
in the world.”

Financial services businesses, such as trading firms, were among the first
companies to endorse such predictive correlation technologies, using
proprietary technologies to analyze data kept in millions of transactions.

But Ventana Research analyst Dan Everett said that event processing is
becoming increasingly necessary in all vertical businesses because of the
amount of real-time data companies produce.

Startups rev their processing engines

Numerous startups have toiled in relative obscurity to develop CEP
software to meet these demands.

Companies such as Coral8, Streambase, Aleri, AptSoft and others are hoping
their brands of event processing software will be strong enough to make them
the leader in a green-field market.

Coral8 CEO Terry Cunningham had his doubts that there was a viable market
for CEP. Over time, he said it became apparent that the need for CEP has been
accelerated by the proliferation of real-time data, especially in financial
services shops.

“Wall Street couldn’t ignore it,” he added. “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.”

Coral8 just launched
version 4.0 of its software engine with a huge emphasis on scalability, and
is relying on a strategy Cunningham used to make Crystal Decisions a
successful company before he sold it
to Business Objects.

That approach is to convince the application developer that Coral8’s
software will aid his ability to build quality software.

Cunningham said Coral8’s engine sits apart from some of the other startups,
because it uses a SQL-based language, called Coral8 Continuous Computation
Language (CCL), that makes it easier for developers to build an application
without Coral8 engineers looking over their shoulders.

This ease-of-use factor, Cunningham believes, will enthuse developers to
tell their bosses to buy Coral8’s engine.

Why not, if they can build applications that can give business managers more
insight into the various events that affect their businesses?

And if that doesn’t happen, they at least want to be attractive enough to
make the bigger vendors sit up and take notice, said Cunningham.

That’s the thinking behind Coral8 and the other startups.

Next page: AptSoft takes a broader angle

AptSoft takes a broader angle

StreamBase and Aleri also make processing engines for CEP. But AptSoft comes at the market with a broader perspective.

Ventana analyst Everett said AptSoft differs from those other companies.

While other startups focus on perfecting an engine to correlate streams of events for data analysis, AptSoft offers a processing engine that uses rules engines, process management and activity monitoring as part of a broader service-oriented architecture (SOA)  solution to processing events.

David Cameron, vice president of product strategy and integration for AptSoft, said that by adding event processing to the mix, AptSoft Director solves a new class of business problems that require event-driven applications that are non-linear, dynamic, unpredictable and closed-loop.

“Solving them involves detecting often subtle and shifting patterns of activity and then correlating and orchestrating responses among people and systems,” Cameron said in a recent interview.

Cameron noted that AptSoft currently sells to clients in business services, financial services, health care and manufacturing.

Financial service firms use the company’s software to drive customer cross-selling opportunities, as well as to identify fraud and ensure compliance with internal process controls and banking regulations.

Cameron added that interest in CEP has really been picking up in the last several months, driven by the fact that traditional approaches and technologies can’t solve the new class of business problems that are emerging from events in commerce.

Quiet giants

With such a huge upside, it would be silly to think the big guns aren’t looking at CEP and related technologies. IBM  , Tibco Software  and Oracle  are, assures Gartner’s Schulte.

“Oracle, Tibco and IBM have an immense amount of intellectual property in this area,” he said.

“They’ve done a lot of R&D, but they actually have soft-peddled it. It’s almost been stealth marketing. It’s kind of amazing because this is an area where the hype is lagging the reality.”

Tibco unveiled its BusinessEvents software for CEP in April.

IBM declined to comment for this story. But according to a page on its Web site, it is working on Active Correlation Technology (ACT) software.

ACT aggregates, filters and correlates events for problem determination and detection of business situations.

Oracle isn’t so bashful. The database giant earlier this year shifted products under an Event-Driven Architecture (EDA) strategy that includes business-activity monitoring, enterprise service bus and a sensor edge server.

While the company doesn’t yet have a CEP product in the market, it is working on one, said Amlan Debnath, vice president of server technologies at Oracle.

Debnath declined to offer a target date for release, but said the original seed of CEP is in the company’s Business Activity Monitoring product.

“You have events coming from different sources — databases, files, actual application systems, network monitoring and security — and with CEP you try to figure out how to correlate info, watch trends and patterns and how they are doing within a boundary,” Debnath said.

“If it violates any of those things, you take some action.”

Debnath added the Oracle sees CEP as part of a broader strategy for correlating events. This would make it a prime addition to Oracle’s EDA suite.

Schulte agreed that CEP might some day find itself sucked into larger platforms.

“I think the CEP technology is going to end up a feature in another product rather than a product in its own right,” Schulte said.

Think of this [CEP] as four wheel drive, so you’re going to buy a vehicle that happens to have this, rather than buy a four-wheel drive kit and put it on top of the vehicle.”

If that’s the case, that would make the CEP space ripe for consolidation, something that Coral8’s Cunningham isn’t necessarily opposed to.

“This market will consolidate as the customer demand takes off,” he said. The smaller companies build early market share and validate the market. When the IBMs and Oracles feel they have to own it, they start looking at buying assets.”