The StreamBase Event Processing Blog

What Does Informatica's Acquisition of 29West Mean for the Low Latency / CEP Landscape?

The complex event processing (CEP) landscape continued to evolve last week as Informatica acquired low-latency middleware specialist 29West. The acquisition puts Informatica in competition with IBM’s low latency offering (WebSphere MQ) and Tibco (Rendezvous). But how will this move change the low latency landscape? What are the implications for CEP?

29West is well-respected for low-latency messaging (actually their specialty is ultra-low latency, on order of microseconds). Former Talarian executive Mark Mahowald founded 29West in 2002 after Tibco acquired his old company. 29West's flagship customer, Wombat Financial Software, was acquired by NYSE Technology in 2008. Wombat is optimized for 29West and heavily in use in the capital markets, and by StreamBase customers. Also, last September, Informatica acquired CEP specialist AgentLogic. 

In "9 predictions for the future of event processing (CEP)" from January, our predictions included that software stacks will continue to miss the [CEP] mark, and that a new event processing stack will emerge. Informatica's recent moves might prove both of these predictions to be wrong.

Informatica now owns two key unique pieces of a low-latency "stack": CEP and messaging. So Informatica may “hit the mark” if they combine 29West and AgentLogic (by contrast, Progress Software is steering Apama away from low-latency toward high-latency business process management applications by merging CEP with BPM in order to compete with IBM and Oracle).

So the 29West acquisition is a step toward a new event-based software stack for Informatica. But what comes next?

1. Will Informatica target low-latency messaging or low-latency everything?

29West instantly makes Informatica a formidable low-latency rival to Tibco Rendezvous and IBM WebSphere MQ. But their CEP engine AgentLogic is more of a desktop CEP platform, not low-latency CEP, and is typically used by federal government intelligence analysts.

So will Informatica evolve AgentLogic to become an enterprise-class, low-latency CEP engine? And, if they do, might they combine AgentLogic with 29West into one low-latency event processing stack? 

2. Will Informatica break out of the federal market with CEP?

Informatica’s AgentLogic CEP product has a fine reputation and customer base in the federal market. 29West’s most dominant customer base is in the capital markets (30% of their customers). Will Informatica attempt to cross-sell CEP to 29West customers in the capital markets?

3. Will Informatica’s CEP be middleware-agnostic or 29West-specific? 

General-purpose CEP platforms are middleware agnostic - over 75% of StreamBase customers use more than one type of middleware. For example, foreign exchange (FX) trading applications frequently connect to 2-10 venues simultaneously, and rarely over 29West. Orders are emitted via FIX, rarely via 29West. Will Informatica spend the effort to build the connectivity users outside the federal government demand?

Depending on the answers to these three questions, Informatica’s direction with AgentLogic and 29West could begin to clarify their low-latency event processing strategy, and create a significant entrant into the race to build the next big software powerhouse based on events.

5 Questions Customers Should Ask About the New Progress Software and RPM

This week, Progress Software embarked on its first big strategy shift in 29 years as they announced the Responsive Process Management suite. This announcement is the culmination of a dramatic change in focus that's been coming for months as new CEO Rick Reidy slashed headcount, picked a new target market, fired most of the old guard leadership, and consolidated a previously balkanized organization structure. 

As a former executive at Progress Software (2003-2007, general manager of Apama), and now the CEO of StreamBase, I’ve been asked by Progress prospects, customers and analysts about the "new Progress." So far, analyst coverage of the new Progress has been politely indifferent, so I'll try to help harden the discourse and pose a few simple, but tough questions about the new strategy. But first, let's recap the new plan.

THE ELEMENTS OF PROGRESS SOFTWARE 2.0

Progress Software has a new product strategy, a new sales organization, a new target market, and a new culture. Bold is the only word for these changes, and Rick Reidy and the board of Progress have to get some credit for having the courage to change. In fact, there's so much change I’ll refer to the new Progress as “Progress 2.0." John Rymer from Forrester ably reported on Progress Software’s Coming Out Party on his blog. So rather than report what’s already been said, I’ll analyze the Progress 2.0 business as an investor would view a new business plan, and look at the essential elements of the business as a whole: 1) target customer, 2) product, 3) customer, 4) differentiation 5) selling strategy, and 6) culture and leadership.

The Progress 2.0 target customer. Progress 2.0 CTO John Bates describes their new target customer as a "global 2000 enterprise that needs operational responsiveness.” The first part of this - the G2000 - is a big shift for Progress, which was built on the small and medium sized (SMB) market. As for the subset of firms within the G2000 Progress 2.0 will target, that's unclear. Analyst Sandy Kemsley reported it this way: “[Progress says operational responsive means companies that] want real-time business visibility, the ability to immediately sense and respond, and continuous business process improvement in a cycle of responsive process management." In other words, the target customer for Progress 2.0 is a big company that wants to make better decisions faster.

The Progress 2.0 product: RPM.  Instead of selling 20 best-of-breed products, Progress 2.0 has a single product suite called the Responsive Process Management suite, or RPM. RPM combines 7 of 20 Progress products and “accelerators,” or pre-packaged applications for market surveillance, smart airlines, and telecom revenue assurance. The product elements of the RPM suite are SOA management (Actional), complex event processing (Apama), and business process management (Savvion), messaging (the Sonic Enterprise Service Bus), IBM System z connectivity (DataDirect Shadow), RDBMS mapping technology, and a portal.

The prototypical RPM customer. At their analyst day, Progress used a fictitious "smart airline," as an example of RPM use. The demo showed CEP, BPM and network monitoring working together to manage the operations of an airline. Southwest Airlines, State Street Global Markets and Italian telco 3Italia all presented at their analyst day, but none of them use RPM; in fact, State Street and 3Italia use only one Progress product.

The Progress 2.0 differentiation.  Historically, Progress has won deals by having the best product in a category like BPM, CEP, ESB, CORBA, JDBC, and an embedded database. But by combining these formally best-of-breed products into one suite, Progress 2.0 can't differentiate based on how good the pieces are; they must differentiate on some attribute of the suite. While other vendors like IBM, Oracle and Tibco already have all these products, Progress claims their differentiation is that they are the first vendor to combine them into one suite.

The Progress 2.0 selling strategy. Progress has made sweeping operational changes. They unified their 10+ specialist sales teams into one sales organization that sells RPM. That means that a sales team (rep, pre-sales engineer, and consulting) that used to sell, for example, Apama in the financial services will now sell a suite of seven products. In addition, Progress will sell more consulting - historically, only 5-8% of Progress revenues came from consulting - their new competitors, TIBCO, IBM, and Oracle, sell a lot more consulting - 20%-40% of overall revenues.

The Progress 2.0 culture. Historically, Progress innovated by buying innovative companies. Now, with RPM as the key to their future, Progress will need to innovate from within. Progress didn't announce any cultural changes designed to spark that innovation. 

FIVE FUNDAMENTAL QUESTIONS CUSTOMERS SHOULD ASK ABOUT PROGRESS SOFTWARE 2.0

From a customer's perspective, the Progress 2.0 business plan leaves several big questions unanswered. Here are five of them:

#1: "Who does Progress 2.0 NOT sell to?"

As Bill Cosby once said: "I don’t know the secret to success, but I do know that the secret to failure is trying to please everybody." Cosby is right - focus is the most essential element of business success. Yet on analyst day, when asked about the fate of the individual products that compose RPM, CTO John Bates said that he "believes that [Progress] can continue to compete in their specialty areas such as CEP and BPM, but also as an integrated product suite.” John was either pandering to existing customers or naive to suggest that a company the size of Progress can compete simultaneously with larger foes like IBM and smaller innovative companies like StreamBase. And even if Progress 2.0 focused on their RPM strategy, that focus is blurry. "Big companies that want to make better decisions faster" isn’t a type of customer, it’s a marketing slogan. 

So prospects should probe behind the marketing slogans and understand who Progress 2.0 WON'T try to please.

#2: "Exactly who is the prototypical RPM customer, and does it look like me?"

Every business needs a stalking horse - a prototypical customer that's in their sweet spot. And every VC that funds a new company insists that they win that pilot customer and make them successful before going after a second, third, and fourth customer. 

But at their coming out party, Progress used old customers to justify their new strategy. Three of them use only Apama. The other, Southwest Airlines, uses three Progress products, but with no connection or synergy among the products. The only value Southwest shows from buying three products from Progress is that they  can have a single contract. Then, without a real customer to serve as an example, Progress demoed a fictitious company called “National Airways" which is rumored to be modeled after a deal that Progress lost to new rival TIBCO at Air France.

If you're an existing Progress customer, ask them to describe their prototypical customer for RPM, and then compare yourself to it. If your firm doesn't resemble the stalking horse, think hard about options for the future. 

#3: "How is Progress 2.0 unique?" [In other words, is Progress 2.0 viable?]

Joe Alsop, former Progress CEO, always asked one excellent question when assessing companies to acquire: “What’s your special sauce - what makes you unique?”

What is Progress 2.0‘s defensible advantage that will enable them to beat IBM and Oracle? Will RPM be technologically better? Does Progress have some unique channel IBM and Oracle doesn't have? Is RPM cheaper than Oracle?  Does RPM outperform IBM's offering? Since Progress consultants are vastly outnumbered by their bigger foes, are they smarter? Faster? More vertically aligned? 

We don't know because Progress doesn't say why they're different. If I were a customer or investor, I'd ask directly, because the longevity and success of a company depends on both understanding, then exploiting, your special sauce.

#4: "Specifically, what is the future of Apama (and Sonic, and Savvion, and Actional)? 

In my field of competition (CEP), Progress used to be a leader. Now, Apama is eliminated quickly (other than in geographies where StreamBase has no sales presence), because CEP is an innovative and changing field, and Apama is distracted - Apama sales people have to learn 7 new products to sell and the Apama engineering team is integrating CEP with products that their existing customers don't care about. 

And it will only get worse. In the future, instead of building CEP, Progress will be building RPM. Instead of building solutions for trading on Wall Street, Progress will build solutions for telecommunications firms like 3Italia. Instead of fixing the graphical development environment to make it suitable for finance applications, Apama's tools will be merged with Savvion's BPM tools, and so on. Apama innovation will stop for years.

While Apama stalls, the CEP market is exploding - CEP was named one of the most innovative technologies in the world by the World Economic Forum in Davos, and customers are making enterprise wide decisions for CEP. The time for rapid innovation is now, and customers are demanding better tools, more robust debugging, even lower latency and higher throughput, not a faster BPM tool.

So CEP prospects should ask to see the RPM roadmap and see if matches with your future requirements.

#5: "What innovation changes has Progress made?"

Progress isn't known for innovation - only 1.5 of their 20 products were organically developed. For Progress 2.0, their stated differentiation is that they've put three products together that, as Doug Henschen from InformationWeek reported, IBM, Oracle, and Tibco already have. So their success will depend on their ability to stay ahead of their competition. 

As described in big companies can innovate if they act small, Progress has historically been classically anti-innovation - terrified of failure, internally focused, and conservative. The exceptions were in the divisions that were allowed to develop their own culture; now, in unifying the culture, they'll need to re-think how they manage Progress 2.0.

Customers should ask Progress to be explicit about the management measures, policies, and philosophical changes that will help facilitate innovation.

Summarizing the questions to ask Progress

Progress Software has good people and good products, and has made a big, bold move with RPM. But the Progress 2.0 business plan raises serious questions about their business, and how they will compete. Leaders at prospective customers shouldn't put money on the table without getting good answers to these fundamental questions.

Gain Capital's Selection of CEP and "Whiteboard Programming"

In the late 90's, visual programming was The Next Big Thing. Instead of writing millions and millions of lines of incomprehensible computer instructions, visual programming tools promised a world where you could "paint" applications using high-level objects. Visual programming promised a future where applications would be built more quickly, more easily, with result in an application that would be less expensive to maintain. Unfortunately that era of visual programming did not deliver on many of it's promises. Tools were primitive, workstations weren't up to the task, many potential users didn't know why they would want to write programs, and the languages didn't line up well with the use cases. In the end, the tool with the most staying power was UML, which is a modeling language rather than a programming language, and which used traditional textual programming languages to create the "real" program. UML became fodder for big-project architecture and requirements documents, not a tool for real programmers.

Last week I was reminded that I'm fortunate to be running a company that delivers on the promise of visual programming. This struck me as I was listening to press interviews with Andrew Haines, the CTO of Gain Capital. Andrew discussed the reasons behind their selection of StreamBase. He talked about how they had evaluated all the major CEP vendors and selected StreamBase for its speed, ease of use, and our being a good partner. And he talked about how strategic their use is - Gain processes almost $200 billion in trades a month. All good stuff.

But the comment that struck me was when Andrew said Gain has found StreamBase Event Flow programming language to be 50% faster than traditional programming techniques (citing an experiment they did that measured StreamBase versus .NET). This comment reminded me of the 90's and the promise of visual programming, or what we sometimes call "Whiteboard Programming." Whiteboard programming (watch a short video here) is the right visual metaphor for event processing because developers design event-driven applications naturally on a whiteboard, with data flows, icons for business logic, and arcs that connect logic to next part of their event driven architecture. StreamBase's visual development tools allow developers to "paint" their application. But the visual representation of their whiteboard isn't just a picture of the application, it is the application. The application is tested, profiled, and debugged visually, and the promise of visual programming, for event-based applications, is fulfilled.

StreamBase EventFlow benefits from several improvements in the state of the art since the 90s, as well as our own innovation. First, it's built into a modern IDE based on the Eclipse platform, already a powerful and flexible tool before StreamBase starts with it. StreamBase also takes many of its ideas from the agile programming methodology developed over the last 15 years, including automated refactoring, unit testing, and a focus on quick iterations. More specific to StreamBase, the StreamSQL Event Flow language derives from declarative data processing languages developed at MIT, Brown, Brandeis, and Stanford universities, with rigorous models behind them. The language is designed to not only be visual, but also fundamentally to be directly executable (unlike UML) and to have powerful facilities for extensibility and abstraction (unlike end-user oriented visual languages). The result is a language that is accessible to financial engineers, quantitative analysts, and business analysts, but powerful enough that application and infrastructure developers are comfortable working on the same platform. Despite the ability to add functionality to the platform in many traditional languages (Java, C++, .NET, Python, textual SQL), StreamBase developers universally adopt the visual programming model for it's productivity and teamwork benefits.

Andrew's comment reminded me why StreamBase is on a run of amazing accolades as one of the most innovative technologies in the world, including Time Magazine, the World Economic Forum Technology Pioneer program, and MIT Technology Review. These esteemed technologies realize that, as Clayton Christensen suggests in The Innovator’s Dilemma, simplicity is always a disruptive innovation.  And the proof lies in clients like Gain Capital, who get to market 50% faster, with 50% less cost, with 50% less cost of ownership over time. 

But at the same time, other CEP venders aren't gaining customer success stories like Gain Capital. Why not? Gain evaluated numerous other CEP products from Progress Software, Aleri, and TIBCO as reported by FX Week. Coral8 was acquired by Aleri, then Aleri was acquired by Sybase. After the acquisition, Aleri engineers revealed that although their product was fast, customer implementations took years and lots of consulting to build. Apama, the early pioneer in CEP, tried to develop a visual programming tool after they developed a textual language. The textual language works, but the visual one doesn't, which is why Apama's visual tool is being scrapped as they integrate the CEP language with Savvion's visual BPM development environment.

What Gain Capital's selection of StreamBase reminds us is that simplicity is always disruptive, and that the promise of visual programming is just as relevant today as it was 10 years ago, and being fulfilled by the leading CEP companies.

A Man’s Undercover Mission into the World of Women Leaders

Recently, I attended the World Economic Forum in Davos, Switzerland, the gathering of 2,500 CEOs, heads of state, and visionaries from the arts. At Davos, I saw Chinese vice premier Li Keqiang, Bill Clinton, Bill Gates, met Miss Universe, and participated with the “titans of social media” — as the founders of Twitter, Facebook, MySpace and LinkedIn squared off. Heady stuff. But mid week, I went to a session that eclipsed them all. It was innocuously entitled The Power of the Purse.

Davos is an economic forum and I went for economic interests. But I went to this session for different reasons. At work I’m a CEO, but at home I’m a widow. When my wife died of cancer three years ago I took on a new, foreign role — mom, and so I attended this session with my 7-year-old daughter Ruby in mind. I thought this session might give me some insight into the world as she will encounter it.

But as I took my seat, I felt out of place. There I was, one of a handful of men with 60 of the most accomplished women in the world. I felt like I had mistakenly slipped behind enemy lines, then been cordially invited to an intimate power lunch in the general’s tent. The panel included Sheryl Sandberg, COO of Facebook, author Margaret Atwood, Laura Liswood, senior advisor at Goldman Sachs and author of The Loudest Duck, and Laura Tyson, former chair of Bill Clinton’s Council of Economic Advisors.

The two-hour session was like an intellectual popcorn popper; one profound observation shot up after another, and I frantically took notes. The conversation ricocheted between social, sexual, business, and emotional topics. So rather than present them as one thought, I thought I’d list the tastiest kernels:

Women, if viewed as an emerging market, are bigger than China and India combined. The economic power of women is rising rapidly. By 2013, the worldwide income of women will rise by $5.1 trillion, which is greater than China's expected growth of $3 trillion over the same time period. And their power is vast: women’s income, worldwide, is greater than the income of China and India combined.

80% of buying decisions in the world are made by women. At first I didn’t believe this statistic. Later, I met the VP of Nissan Motors for Asia. Now I figured of any purchase, that cars would be a male-dominated decision. Wrong. He told me that 70% of the decisions to buy a Nissan are made by women.

Men spend money on women and whisky; women spend money on the family. Margaret Atwood observed that this is why 94% of the borrowers from the renowned Grameen Bank are women, each of whom is playing a key role in allowing millions of individuals to work their way out of poverty with increased independence. And historically, this is probably why in Native North American communities the job of dividing up the kill was given to older women — they knew which families needed more.

The board of directors gap is still too wide. The CEO sitting next to me told me a story about a woman friend of hers who recently got a call from a recruiter who had been tasked to find a woman for the board of a venerable company that had sold exclusively to women for over 20 years. The board had never included a woman; she would be the first one. Amazed, she declined the interview.

Hire women executives, raise profits. When I observed that I had worked in precious few technology companies that had women executives, the woman next to me said: “Well you are leaving money on the table. Studies show that companies with women executives have a healthier top and bottom line.” After this session, I believe her.

The more powerful the woman is, the happier the marriage is. I have to admit that I struggled to find research to support the claim that the probability of divorce decreases as a women’s income increases; in fact I found the opposite. But this group felt strongly that professionally balanced marriages are happier marriages and this instinctively made sense to me.

A call for balance, not quotas. Surprisingly, this panel of women seemed undisturbed with the natural bias that men — or indeed any group — have to work with people they’re comfortable with. The call to action for male CEOs and boards was for an increased but balanced presence of women leaders, not a coup d’etat.

Vocation is just as important as raising kids. The prevailing sentiment among these successful women is that they feel their jobs are as important as their role as a mom. Not more, not less.

The way the women interacted was different and in many ways, better. As I was listening, I realized that this Davos session was different than all of the others. Like all the sessions, the speakers were intelligent and passionate. But if the sessions were like a musical performance, the male-dominated ones were like a series of screaming solo acts. By contrast, The Power of the Purse session was more like a skilled jazz improvisation — the speakers were good, built on one another, and the sum of the observations was greater than the individual points. Any business could use more of this type of discourse.

A question for CEOs to ask: would you want your daughter to work at your company? Laura Liswood posed this question. She spoke of the framework for understanding the dynamics of diversity in the workplace.

Women are just plain better at some leadership roles. I’ve been involved in 15 corporate mergers and acquisitions, and one of the toughest things to do well is post- transaction integration. The women in this session quoted findings that women who lead acquisitions are more successful than their male counterparts. This one resonated on my own logic scale.

Are men ready to be displaced? The men my 7-year-old daughter will encounter 20 years from now will be radically different than today’s men. The women at Davos forecast a near-term crisis of self-esteem for men and a re-adjustment of our self- images. That’s an exciting — and scary — thought. What are the implications of a dramatic shift in self-image and power for men? For women? For business? For society? Will men be introspective enough to aid and abet this subtle yet dramatic shift to a more feminine view of power and leadership? This seemed like the deepest of topics that was dealt just a glancing blow, and it’s one that continues to ruminate in my mind.

Women work not from choice, but from necessity. Margaret Atwood graciously emphasized this point for me. Many women — worldwide — work not from choice but from necessity. They do it to earn money to feed their kids. It has never been the case that all men worked and all women stayed home. That was a middle-class Victorian ideal, but it was true for only a few women then. The rest were factory workers, farm workers, domestic help, and prostitutes. In fact, huge numbers of “women workers” were prostitutes then, many of them children.

Call to action for male CEOs: start an affirmative search for women leaders. When the topic of quotas came up, most women rejected the idea. Laura D'Andrea Tyson advocated the idea of an affirmative search: for men to leave our comfort zone and search for more women leaders, more women as board members, and more women in political office. Profits will go up, decisions will be better, and society will be a better place.

Whenever I leave a thought-provoking event like the World Economic Forum, I ask myself: “With everything I learned, what’s the one thing I’ll do differently?” From the 2010 Davos Forum, the answer was simple — I’ll heed Laura Tyson’s call for an affirmative search to include more women on my leadership teams and encourage other men to do the same. And if you’re still not convinced to do it for your business, do it for your daughters.

(Mark Palmer is the CEO of StreamBase Systems.  Follow him at twitter.com/mrkwpalmer)