Gartner urges caution on Iona’s new technology

31 Oct 2003

Industry analyst Gartner has urged enterprises to hold back on investing in Irish middleware firm Iona’s new Artix service-oriented integration platform until it has become more accepted by the market. Until that time, Gartner said that the technology should only be deployed by enterprises at the leading edge of technology.

Iona launched its new service-oriented integration platform Artix last week after revealing an increase in revenues and a dramatic reduction in Q3 losses. The results followed more than a year of instability at Iona, which culminated in the return of founder Chris Horn to the position of CEO as well as a severe reduction in headcount. Iona reported that it has amassed Q3 revenues of US$17.4m, a slight increase on revenues of US$16.4m in the second quarter. Net losses were US$1.95m, down considerably from US$25.4m reported in the second quarter of this year and the US$26.25m reported in the Q3 last year.

“Artix is crucial for the future of Iona,” said Gartner analyst Massimo Pezzini. “After revenue slumped in the first quarter of this year, Iona refocused on the installed base of its CORBA-based Orbix products and took vigorous steps to cut costs and restore profits. Since then, its business has stabilised, and it expects to break even in the fourth quarter. However, with the overall CORBA market declining, Iona needs Artix to generate new revenue and customers. Until Artix succeeds, Iona will remain vulnerable.”

Artix initially targets Orbix users looking to provide web services interfaces to CORBA applications. But Artix will also aim at new customers wanting to use web services to cut software infrastructure costs and complexity. The Artix multimiddleware service-oriented integration products use the same Adaptive Runtime Technology (ART) as Orbix 2000 products. Artix can support a variety of application-integration approaches, including service-oriented architecture, composite applications and multichannel systems. It is one of the few service-oriented integration platforms to run on mainframes and allows CICS, IMS, CORBA, Tuxedo, MQSeries and TIBCO Software applications to be used as web services. Thus, enterprises can use different middleware protocols or replace legacy middleware with Artix. Early adopters include Sprint, BellSouth and Zurich Insurance.

However according to Pezzini, the challenges for Iona include convincing enterprises that Artix is viable and providing a compelling value proposition for mainstream enterprises – those that adopt well-established technology – a market, he argued, Iona doesn’t know very well.

“To date, most of Iona’s customers have been leading-edge adopters of new technology. Success will also require Iona to recruit Artix partners among system integrators and independent software vendors. But the main challenge for resource-constrained Iona is staying focused on the Orbix installed base to ensure revenue from new licenses and maintenance while it grows its Artix business,” he said.

“Leading-edge enterprises looking for a rich service-oriented integration solution should consider Artix but should recognise its technical immaturity. Others should wait until Artix is further proved in customer projects and gains market momentum and partner support,” Pezzini concluded.

By John Kennedy