Interview with Dave Watson: iWay and Cloud Computing

Interview with Dave Watson: iWay and Cloud Computing

By Vincent Lam

In this issue of iWay Newsletter, we present excerpts of an interview with iWay Software Senior Vice President Dave Watson, who covers various topics, including how iWay fits in with the cloud computing trend.

Lam: What about cloud computing, which I keep hearing about all the time? Everyone keeps talking about the cloud this, the cloud that. I talk to my wife and the first thing she thinks when I mention the cloud, is looking to the sky, not the Internet. So what is the big buzz with the cloud, and would you elaborate on iWay Software’s new cloud computing offering?

Watson: I think the interest in the cloud is something that is driven by the economy. A lot of companies now want to reduce or curtail their capital expenditure, so that means cutting back on big expenses – on hardware, software acquisition. The cloud offers a way to offer software on a monthly subscription. You can offer it without needing to buy hardware, software, set up servers, disaster recovery backup, etc.

It’s literally a pay-as-you-go model. It fits a lot of companies’ budgets, where they can take that out of their operational expenditure. Also, we find some projects are nothing but pilots within the business anyway. A business wants to pilot something – it may be a new business for them, it may not – but they don’t want to go and have to spend a massive amount of money on hardware, software, infrastructure and process. They can basically take the capacity they need from a cloud vendor and put our software in there to deliver the application, and then that capacity of the cloud is elastic. It’s dynamic, so if they only want to do their processing on three days of the month, they only pay for the three days of the month. For example consider a retailer and they want to do some promotions around Thanksgiving or Christmas, they can add a lot of capacity just for that period of time. We see quite a lot of interest in the elastic nature of cloud computing.

Lam: So it sounds like it’s not just a cost benefit, but really there’s that sort of – the term you used was “elasticity” – just being able to scale back and forth as needed.

Watson: Yes. You see, we run our software on an Amazon cloud. It’s called an elastic computing platform (also known as EC2). It is a massive investment on Amazon’s behalf and for almost zero cost to the end customer. For a few hundred dollars they can just get on board with that and then they have access to almost infinite capacity. For a small business unit, a subsidiary company, or a marketing unit that wants to do something, they can do it at very low cost. There is no question that larger companies have the capacity they need internally, but often things are partitioned off by business unit, by application, and it is harder for some of the emerging projects/business units to get access to that, so there is a lot of popularity in this business model.

One of the challenges, though, is from a cloud perspective. One way of looking at it is that it’s just a Linux operating system that is hosted somewhere on the Internet. So any software could run in a cloud. It requires some security, some Web-based administration and some other aspects of deployment in the cloud. But the big challenge is as follows: OK, I’ve put this big new application in the cloud and my data is actually sitting behind the firewall in my Oracle database, or it’s in my SAP system, or my mainframe. How could you securely get to that data? I don’t want to open up my firewall so that any hacker can get into my SAP system because that’s where I’ve got my general ledger and my customer information, so how could you do that securely? We added that capability – something that we have had for some time within iWay so you could do that secure two-way integration between what the cloud people would call the “on-premise” – which we know as the traditional behind-the-firewall – “data center” and the cloud, meaning the hosted server is sitting somewhere on the Internet.

Lam: So it sounds like it’s really a win-win situation. You get all that and you’ve got the security concern, which I think is really a concern for everybody, and that’s something that sounds like it is addressed as well.

Watson: To give you another instance there: In July I was in Japan – I’ve been to Japan a few times – and I’ve always found Japan to be more conservative in its adoption of technology trends, maybe three years behind the U.S. and Europe on things like CRM and data warehousing, but I was surprised at the uptake in cloud in Japan. Everywhere I went people were asking about cloud computing. Salesforce.com has a very strong presence in Japan in very large companies. I talked to some of the big systems integrators in Japan, and I was kind of curious as to why everyone is talking about cloud.

The issue in Japan is this year IDC published the report that showed that the IT budgets in Japan are not just frozen, they are down between 20 to 30 percent across the board. Only 4 percent of all Japanese companies plan any increase in IT expenditure this year, about 20 percent say they would stay the same, and 75 percent say they would decrease their investment in IT. And another study showed, I think, the reduction in spending on IT investments is about 24 to 25 percent across the board because of the recession, and that’s driving people to the cloud because it’s a cheaper way. At least in the short term, it is a cheaper way of deploying apps.

In the long run it may end up costing you more. It is a little bit like do you rent a car or buy a car? If you rent a car you can drive it immediately, it’s very low-cost, you don’t need to worry about the maintenance and if anything goes wrong, you replace it. But do you want to rent a car for two years? No, it’s probably going to be cheaper to buy a car eventually.

Lam: So in regards to the suites that we talked about before – BPA, B2B and BPM suites – going forward, do you see that the cloud offerings will be basically in lockstep with the new products and features within these suites?

Watson: Absolutely. So we have a few cases there: We have our standard iWay Service Manager deployed on the cloud. We’re having some discussions with a couple of clients about how they manage many thousands of their partners and their interaction, and the cloud is a very good platform to do that and so we have our trade-in management software. We have the iWay Service Manager running in the cloud and we’ve done work with Salesforce.com integration. So how would you integrate your CRM Salesforce application with your general ledger and your ERP? We see the business process automation, and with EIM, we have our data profiling and data quality tools on the cloud.

I don’t see ETL running in the cloud, though some ETL vendors are talking about it. It’s just not practical. Why would you move huge amounts of data up to the cloud and back behind the firewall? It is only practical if your target database is in the cloud.

Profiling is very good because you are generally talking about samples of the data, and what you are sending back are report summaries and Web-based applications, not sending 10 GB of data up to the cloud to send 10GB back. But, having said that, people are talking about it and even Amazon is now offering a service where you can put your data on a disk, a tape, and FedEx it to them, and they’ll load it for you, so you don’t have to worry about how long does it take to load a terabyte on the cloud through the Internet. You can get it done the next day.

Lam: You know all this talk about the future with the cloud just makes everybody wonder where we are going with integration in general. So Dave, as one of our final questions, where do you see the integration industry heading and specifically where do you see iWay heading in the future?

Watson: just on the topic of cloud, I just see the cloud as a platform, another computing platform. Just as mainframes went to midrange, went to Unix, client/server, Internet; it’s just another paradigm. There are two or three companies out there that are smaller companies that previously tried to be appliance vendors, and that didn’t work out so they now position themselves as pure-play cloud integration. I don’t see that as viable because mainstream platforms will run on cloud, and the big issue of integration with internal systems is just the strength of iWay. iWay runs on the mainframes, it runs on AS/400s, digital, Unix, Windows, etc., and cloud is just another platform in that respect.

While I’m talking about cloud, I think it’s important to see that it is just another platform that we can run on, and it’s another paradigm that we can allow our customers to take advantage of with our software rather than having to go out and make an investment in some specialized cloud product that will ultimately disappear from the market. We have a strong business continuing with iWay with our partners with IBM now as a partner, as well as Oracle, and many other companies that were acquired by Oracle like BEA, J.D. Edwards, Siebel, and with SAP providing adapters to those companies and that continues to grow for us. We have similar relationships with other providers like Fujitsu and NEC in Japan to provide adapters. With respect to the other products, as I said, the real-time data integration platforms and complex event processing, we see a lot of interest continuing in that. We are investing in areas of real time data capture:

Real-time loading: being able to do data integration as part of a real-time platform.
Master data management: adding workflow capabilities in that area to allow customers to tie that in to their own businesses processes for the synchronization or change management of reference data.
Data quality: tighter coupling with WebFOCUS. We have a good story as far as how data quality can integrate, and we’re tying that into WebFOCUS from the point of view of information delivery so we can deliver very high quality PDF files, or Excel, or WebPages to the users of data profiling who can then actually drill back through into the underlying source systems for further analysis.

In terms of business process automation, one area that we are working on, which is actually in production with the first client and will be rolled into the next release of our software, is a business rules engine. We have had a number of rules capabilities inside of iWay for some time for things like document validation, content level validation and quality rules, but this is a business rule where, using a business query and business terms, we can define rules of how you want to process data or messages in your organization, and those rules can be defined by a business person and dynamically changed.

We have quite a large project with a bank where we are tying all of their different product systems into a common rules infrastructure for the point of view of calculating their compensation and commissions in a consistent way that is driven off those source systems. So we are looking at adapting that into other industries and making it part of our more mainstream product in the next few months to come.