Microsoft launches BizTalk Server 2004

That problem creates an opportunity for a class of software known as integration servers. Initially, such software was a niche market of high-end products only the largest businesses could afford to use. Microsoft, which has been aiming to broaden the market for some time, on Tuesday launched its latest effort, BizTalk Server 2004.

The goal of this version, as with prior efforts, is to "take the disconnected business processes and provide an opportunity to link them," said Ted Kummert, vice president of Microsoft's E-business Servers Group.

BizTalk is part of a class of products designed to help companies get their various software components talking to one another.

The need for such software has emerged as companies have continued to write software that does a good job of talking to a few products but has trouble speaking broadly to all of the different types of computers a company might use.

Price has been a key part of Microsoft's strategy with BizTalk. The software giant announced late last year that it would keep pricing at $25,000 per server processor, with an unlimited number of connections allowed. That compares to as much as $500,000 for rival products from IBM, Tibco Software, BEA Systems and others, analysts said.

However, start-ups are also starting to offer cheaper products aimed at the same market, forcing the larger companies to respond with cheaper products of their own.

Microsoft competitors note that BizTalk runs only on Windows, an inhibitor to use in businesses that run many different types of operating systems.

Steve Mills, IBM's senior vice president and group executive of IBM's software group, said running integration software on Windows is impractical for complex jobs.

"Given the poor scalability characteristics and transaction control of Windows, how many thousand Windows servers do you want to shove in the middle of your process flows to use Microsoft technology?" he asked.

"Microsoft is making a lot of noise about participating in integration...(but) we don't really see Microsoft as an integration competitor," Mills said.

Kummert said that although BizTalk itself runs only on Windows, there is software from Microsoft and others that talk to a whole variety of systems. Virgin Entertainment Group, an early customer, used the software to connect its AS/400 machines to IBM retail systems as part of a fraud-detection program.

How Virgin uncovers fraud
Whereas Virgin once sent its cash register to a third-party company and got back reports weeks later, it now has a BizTalk Server that monitors transactions and pages a loss-prevention worker if, say, a large cash refund or discount is applied. The result: The clerk in question is still behind the register when the questionable transaction is discovered.

The automation and quicker time frame has enabled Virgin to uncover twice as many incidents of potential fraud as it did under the previous system, said Steven Winningham, senior vice president of operations and information technology at Virgin.

That's important to a company that estimates its loss from fraud to be in the hundreds of thousands of dollars per year. "If I can save 10 (percent) to 20 percent of that, it's a nontrivial number," Winningham said.

As a result, Virgin plans to expand the use of BizTalk to incorporate its traffic and payroll information. "It's going to really become our business intelligence engine," Winningham said.

With this iteration of BizTalk, Microsoft has been trying to boost the number of tasks business managers can do without needing IT staff help. The company has added tools that enable greater integration with Office as well as making it easier to set business rules in plain English. The previous version was BizTalk Server 2002.

"It's obvious we need to have great tools for the developer," Kummert said. "You need a parallel tool set to bring the business user into the equation."

Ammara Masood, who works with Xavor, the system integrator that helped Virgin, said Microsoft has made progress in that regard but that there is still room for improvement. For example, while it is easier for a business manager to outline in Visio how a business process should work and a programmer to implement it in the new version of BizTalk, it is less easy for IT and business staff members to collaborate when changes need to be made.

Masood said Microsoft could also improve the way it natively works with older legacy systems. While Virgin was able to connect to its older systems, that required custom work. "It would be much more convenient, if Microsoft were to provide something out of the box," Masood said.

That said, Masood said Microsoft has gone quite far in improving BizTalk, particularly in performance and scalability. "There's a big difference" as compared to prior versions, she said.

Masood said Xavor looked at IBM and Tibco but said a lower price was a key in Virgin's decision to use BizTalk.

"Really, megaprojects are out. Nobody is spending the multimillions of dollars they used to," Masood said, adding that Virgin's overall project cost in the hundreds of thousands of dollars.

While Microsoft is pitching the software as part of its larger Windows Server System, an umbrella term for any of its server products, the company has backed away from plans to combine BizTalk and other e-business server software into one title, a project that had been known as Jupiter.

"We talked to customers and partners, and the feedback was clear," Kummert said. "They prefer the flexibility and simplicity of purchasing the products separately."

Kummert said the development efforts, however, remain integrated. "That's the Jupiter vision. That's our vision. That's unchanged."

Evaluation versions for BizTalk Server 2004 are available now; the final product is expected April 1.

CNET News.com's Martin Lamonica contributed to this report.