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Many organizations have an immediate need to integrate with the external systems of their business partners and other constituencies. As such, these organizations have taken an "outside-in" approach to application integration: placing the priority on integration with external systems, while failing to address the integration issues within their own infrastructures.

In many cases, this approach has forced organizations to re-engineer their processes, as well as extend deployment time lines. This has a direct impact on budgets and increases the time to benefit. In some instances, integration initiatives fail simply because of the inability to adequately re-engineer business processes.

We recommend end users follow an "inside-out" integration strategy: First, prioritize the integration of internal systems and applications, defining and institutionalizing your business processes. Once internal integration issues have been resolved, you'll be in a far better position to integrate your infrastructure with external constituencies because this integration is then simply an extension of their current integration. During mergers and acquisitions, organizations must quickly bring together disparate systems that suddenly fall under the same roof -- before thinking about how to integrate with systems over which the organization has no control.

This approach lets organizations execute their integration strategies in phases that make sense to the business and greatly helps reduce the complexity and time associated with integration strategies. While many organizations may face pressures to take an outside-in approach (to capitalize on B2B opportunities), the lack of control or understanding of these external systems can result in far greater pains in the long run -- contributing to longer implementation cycles and increased cost of ownership, and further complicating the integration problem.

The Cost of EAI

Organizations looking to implement an EAI solution are faced with a hefty initial price. The average price for products ranges from $500,000 to $750,000, not including the cost of services (which can be three times the cost of the actual product). However, because integration technology lets companies leverage previous technology investments, rapidly add new technologies at a lower cost and quickly integrate the disparate systems of different companies after a merger or acquisition, integration technology represents a highly strategic investment.

Although the initial cost of investing in an EAI solution may be daunting to many, the costs of integration are in fact far more extensive if you don't use EAI solutions. And prolonging the integration problem is likely to be more costly than an initial EAI investment, especially if long-term plans include a merger, acquisition or introduction of new technologies into the infrastructure.

What's Next for EAI

Given the recent activity in the EAI market and the direction of the vendors whose products we evaluated, we expect to see the following trends played out in the near future:

>> Convergence with workflow vendors. Business-process automation provides great value in situations where decisions can be made by predefined business rules, such as purchasing processes. However, the complete automation of even simple purchase processes can be detrimental to relationships between businesses and their customers. Human intervention must be possible to override business rules that are inherently rigid and adapt to quickly changing business conditions.

Workflow products, on the other hand, allow for human interaction in the process. EAI vendors have acquired workflow technology to package with their offerings. Examples include Tibco's acquisition of InConcert and webMethods' acquisition of IntelliFrame. Other vendors, such as Vitria, build their own workflow mechanisms with similar capabilities. Many products we evaluated are still sorely lacking in terms of workflow capabilities, and we expect them to quickly build or integrate such capabilities into their solutions to remain competitive.

>> Convergence with platform vendors. Integration servers are likely to face some of their toughest competition not from each other but from platform vendors. Platform vendors, including BEA Systems, Hewlett-Packard Co., IBM and Sybase, offer comprehensive solutions that include Web application servers, e-commerce engines, workflow tools and databases -- as well as integration servers. Such solutions will be extremely attractive to organizations seeking a single vendor to provide the majority of their technical infrastructure components. EAI providers are likely to be acquired by platform vendors that need to offer integration servers as part of their comprehensive solution sets. Already, Sybase has acquired New Era of Networks, and HP has acquired BlueStone. We expect this trend to continue as the demand for all-in-one solutions increases.

>> End-to-end integration. EAI vendors are expanding the scope of their product lines by offering end-to-end integration solutions. For instance, webMethods' acquisition of Active Software positions it to provide a solution that lets organizations integrate and standardize processes internally, as well as extend that integration beyond the firewall to connect with external constituencies. Acquisitions are not just limited within the integration space. EAI vendors also are acquiring XML solution providers to enhance or develop B2Bi solutions, such as Vitria's acquisition of XML solutions.

The adoption rate of integration technology has increased dramatically over the past couple of years. With this increased adoption and the improving focus of the EAI vendors, technologies are continuing to mature. Any larger organization that is plagued with heavy integration challenges should consider using integration servers.

But before embarking on integration projects, you should narrow the list of possible vendors. More important is choosing the right technology to address both business and functional needs of organizations. The technology provides a good foundation for organizations seeking to integrate their back- and front-office systems. Clearly, some products are better than others, and a great many are still immature (as is the EAI market). But in general, EAI products can still pay for themselves quickly if you are integrating a number of different systems and your environment is subject to frequent additions and changes. In such scenarios, EAI is certainly a big improvement over point-to-point integration.