IBM, BEA Face Microsoft STP Competition

By Maria Trombly | Securities Industry News | Nov. 18, 2002

While Microsoft recently entered the straight-through processing fray with a new tool set, industry leaders IBM and BEA Systems continue to expand on their integration products. BEA unveiled a new way to bring together data from disparate sources earlier this month, and IBM continues to expand on its WebSphere product line, with a new version due the end of the month.

Microsoft recently announced its BizTalk Financial Services Accelerator, which promises to make it easier and cheaper for Wall Street firms to move to straight-through processing. But its competitors say that the product is limited to the Windows operating system, and is not as scalable or as robust as products that run on other platforms.

"Wall Street is about heterogeneous environments," said John Kiger, director of product marketing at San Jose, Calif.-based BEA Systems. "Microsoft's strength is really in the homogeneous platform for productivity applications for small and medium businesses and departmental applications in the enterprise. It's going to be difficult for Microsoft to crack the financial services market as an integration platform."

Sharyn Leaver, an analyst at Cambridge, Mass.-based Forrester Research, said the Microsoft product is definitely cheaper.
"But many companies already have a certain level of commitment to one infrastructure vendor or another," she said. "That will somewhat dictate whether they will consider using BizTalk. If they run everything on Unix machines and have mostly Java skill sets, BizTalk is not going to be for them."

BEA has just released Liquid Data for WebLogic, a product that allows data from multiple sources and platforms to be brought together into one view. These sources include traditional relational databases, flat files and XML files, as well as other applications.
BEA currently claims all of the Fortune 500 securities industry firms as customers, and boasts that its WebLogic series of integration products are not limited to any one platform.

"We believe our long-standing presence and strength on Wall Street is a result of delivering reliable, scalable infrastructure that's open and standards-based," Kiger said.

IBM also touts a large percentage of Wall Street firms as customers-the overlap is because that many firms use multiple products.
Bob Sutor, director of e-business standards strategy at IBM, said Microsoft's entry into this arena indicates the Web services-based integration market is maturing. "We have entered the phase of Web services technology where there real dollars are to be made here," he said.

Although the Microsoft product is billed as being simpler and cheaper, Sutor said appearances can be misleading.

"Microsoft is confusing the issue by pretending that everything has a simple solution," he said. "It's a sophisticated world out there. Every single company has built up its own IT system....And frankly, the entire banking world is not running Windows, and they will continue to run the software that they have run for many years. Right now, the economy isn't as good as people would like, so people are making very careful decisions about what software they bring in. IBM is providing an evolutionary path through new technologies like Java and XML and now Web services as well."

BEA's Kiger said the BizTalk product is also not as inexpensive at it might seem at first glance.

"To deploy a Microsoft solution, you have to buy the BizTalk server, the SQL server database, then go to their partners and buy the adapters, then hook all this stuff together," he said. "So it's not that much less expensive."

The basic BizTalk product costs $25,000, with an additional $25,000 per CPU for the Financial Services Accelerator tool set.
"They're less expensive than proprietary solutions like WebMethods or Tibco," Kiger said. "But not a standards-based platform like BEA WebLogic integration."