Red Hat Seeks to Rule Business Users

| May 21, 2009 | Application Infrastructure | Competitive Intelligence Reports

| Analyst: Michael Meehan

Current Perspective: Positive
Vendor Importance: High
Market Impact: High

Event Summary

May 19, 2009 -- Red Hat, Inc. has announced the availability of JBoss Enterprise Business Rules Management System (BRMS), an open source business rules solution that enables easy business policy and rules development, access, and management. JBoss Enterprise BRMS allows customers to reduce development time to update applications and processes with the latest business rules and policies.

Analytical Summary

• Current Perspective: Positive on Red Hat’s release of JBoss Enterprise Business Rules Management System (BRMS), which extends the reach of the company’s business rules technology beyond its traditional application developer roots to the business analyst audience. JBoss BRMS can be positioned alongside third-party BPM, integration, and Java runtime systems as a standalone enterprise rules solution, opening up new market opportunities for Red Hat.

• Vendor Importance: High to Red Hat, because JBoss BRMS is its first application infrastructure product built to include the non-technical business user, something that is critical if Red Hat wishes to follow its emerging strategy in the application infrastructure market to pursue business and IT executives who control more of the enterprise purse strings. Already, Red Hat has added the word “enterprise” to the names of all of its application infrastructure platforms. JBoss BRMS marks a critical step in marrying its products to that marketing strategy.

• Market Impact: High on the business rules market, because JBoss BRMS offers competitive functionality in a subscription-based package ($20,000 for an annual premium license for four CPUs). Red Hat brings a significantly lower barrier of entry to the rules market, which will put pressure on rules competitors including IBM/ILOG, Fair Isaac, Pegasystems, and Bosch.

Recommended Competitor Actions

• Software AG should acquire or OEM a business rules engine to flesh out its BPM-SOA offerings. IBM, Oracle, SAP, TIBCO, and Red Hat all hold an advantage in this area.

• IBM is preparing to release its first unified business rules offerings based on its acquisition of ILOG in 2008, which will gives IBM the opportunity to take over the business rules market, but it must beware the threat posed by Red Hat. IBM will not be able to beat Red Hat on price. Yet, it can use its channel (see IBM Broadcasting SOA on Every Channel, May 5, 2009) to combat the challenge posed by Red Hat.

• Microsoft should view Red Hat’s focus on business rules as an example worth following as the company gets ready to unveil its model-driven development project, Oslo, later this year. Abstracting rules management from development will offer significant agility gains for users. Moreover, Microsoft will be able to make a much better business case for Oslo, if it markets those dynamic models in combination with its BizTalk business rules engine, or if it leverages its strategic partnership with Fair Isaac.

• SAP (which bought the Yasu business rules engine in 2007), Oracle, and TIBCO all have business rules capabilities built into their middleware platforms that should be enhanced and positioned as enterprise solutions. One of the selling points of JBoss BRMS is that it can work with systems across the entire Java application infrastructure spectrum. Use of that product can extend well beyond a user’s reliance on the Red Hat middleware platform. SAP, Oracle, and TIBCO also should market business rules as something extending beyond their platforms.

• Fair Isaac, Pegasystems, and Bosch should create subscription pricing plans to counter the open source business model threat posed by Red Hat. Those companies may not be able to beat Red Hat’s price, but they can lower their barriers to entry via an equally flexible subscription model.

Recommended End User / Customer Actions

• Users seeking to create greater agility in their SOA systems should consider JBoss Enterprise BRMS along with other leading standalone products from Fair Isaac, Bosch, Pegasystems, and IBM/ILOG. Users also should consider the JBoss Enterprise SOA Platform, which includes the BRMS product, but Red Hat’s rules management capabilities have matured to the point where they can compete in the standalone category for enterprise customers.

• Users should consider who inside the organization is going to be setting and administering rules prior to evaluating the competing products in the business rules space. If business analysts will be heavily involved, then users should prioritize the usability of the interface. If developers will be doing most of the work, then users should prioritize the extensibility of the rules engine.

• Current Red Hat customers that are using the JBoss application server or ESB should strongly consider changing their subscriptions to the SOA platform in order to gain the business rules functionality (along with the business process management solution). JBoss BRMS can greatly simplify change management routines, freeing up developer time for other projects.

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Current Perspective

Competitive Positives and Concerns

Recommended Vendor Actions

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