This is despite many enterprise resource planning application vendors like SAP, Oracle, and PeopleSoft taking on integration responsibility themselves and increasing threats from infrastructure vendors like IBM and Microsoft, according to AMR Research in Boston.
"The ERP vendors and the infrastructure vendors have their own agenda," said Scott Lundstrom, AMR analyst at the firm's fall executive conference today in Boston. "This leaves the door open for all of the integration application vendors because the others bring something to the table. There is no incentive for the application vendors to support the heterogeneity [of software systems] in the market today."
Most of the application vendors like SAP and Oracle have launched extensive programs during the past year to build application programming interfaces that third-party software firms can use to link their software to the massive transactional systems like SAP's R/3. The ERP vendors have also taken on much more of the responsibilities for making sure that other applications run with their systems.
Likewise, infrastructure suppliers, like IBM and its Lotus division and Microsoft with its Windows DNA strategy, are positioning themselves as the glue that binds corporate information systems together.
But Lundstrom explained that the problem with this model is it assumes that a single vendor's ERP or infrastructure system is the end-all, be-all of a corporate computing environment. It also assumes that every company that firm does business with from suppliers to customers, is also using the same system.
It also forces users to accept as law a single vendor's view of corporate computing. With each of the enterprise application vendors trying to grab as much market share and as much of a single corporation's business as possible, this becomes a dangerous prospect and could force a user to go with more than they wanted from that single vendor.
"There is always going to be some other application running or some part of a business that isn't using the same ERP system or a supplier or customer a company wants to link to that isn't on the same system that prevents homogeneity," Lundstrom said. "Ultimately, you have to go to Switzerland if you want neutrality."
Case and point: the megamanufacturer DuPont. The maker of everything from Lycra to Teflon is No. 15 on the Fortune 500 list and has made a decision to centralize its operations on SAP's R/3 business software. But the $50 billion firm still needs to link that system to a plethora of other systems running at Dupont's 300 sites and 160 plants worldwide.
"Every time the market changes, we go through an organizational realignment in Dupont to reflect those changes," said Paul Pinson, information architect at Dupont. "Dupont has at least one of everything running somewhere and two or three of most."
While SAP has an extensive catalogue of published APIs, it wasn't enough to meet the needs of a megacorporation like Dupont, said Pinson, who now works for Andersen Consulting as part of an IT outsourcing deal Dupont recently made. Dupont decided to use IBM's MQ Series messaging system and Frontec's AMTrix messaging broker software to link its highly disparate systems.
"The SAP integration drives most of what we do. We will have 500 to 700 interfaces operating in this environment this time next year," Pinson said. "In our ongoing effort to link all these systems, we needed a neutral system and tools."
And it's business like this that is sure to drive up the profits of the 200 or so integration vendors on the market today, many of them less than two or three years old. Lundstrom added that more are likely to pop up in the coming years and it won't be another two years until consolidation starts taking place.