Panelists

Jose Garcia Ortega, Delta-R
Steve Demuth, ILOG
Carole-Ann Matignon, Fair Isaac
Garth Gehlbach, Corticon
Rik Chomko, InRule
Russell Keziere, Pegasystems

Moderator

John Rymer, Forrester Research

Topics

1. Views on the recent acquisitions (by IBM, SAP)
2. Decision Automation / EDM
3. Investment in Standards
4. Summarizing the impact of the IBM and SAP acquisitions
5. How 'rules management' and 'decision management' relate
6. Vitality and maintainability

.

Welcome

John Rymer:  Good afternoon — let's get started.  My name is John Rymer, and I'm an analyst with Forrester Research.  It's great to be here with everyone today.  And it's really great to be asked by the Business Rules Forum folks to put together and moderate this panel about the industry  Personally, I'm really excited about this industry — I think we're at a very interesting moment in the history of the business rules marketplace.  When you have two out of the top four software vendors making acquisitions of business rules companies, with the purpose of incorporating those business rules products into their product lines, I think a lot of people who haven't necessarily been paying attention to business rules are going to sit up and take notice.  And these developments are happening at this point in time ... with the financial meltdown, or impending recession, or whatever you choose to call this thing that we're in.  Somebody (Russell?) said to me the other day, "My 401K is now a 201K!"  That's a great line.  It would be funny if it weren't true. In the midst of this recession, and certainly as we start to work our way through these issues, I think we're going to see a lot more emphasis put on controls that work ... on measurements that really matter.  And I think that business rules are going to play an important role in that set of developments.  So, we're in a very interesting time in the industry.

I'm going to kick things off by introducing our panelists.  After that, I've got a few questions of my own that I want to put to them.  Then, if you have questions for the panel, raise your hand, shout out your question, and I'll get a mic over to you.

Okay, starting with Russell (who had the great line about 401Ks), Russell Keziere from Pegasystems, welcome.  We have Rik Chomko, from InRule.  Welcome, Rik.  Garth Gehlbach, from Corticon — welcome.  Carole-Ann Matignon, from Fair Isaac.  Steve Demuth, from ILOG.  And, lastly — for me, a newcomer and someone I just had the pleasure of meeting today — Jose Garcia Ortega, who's from a new company (Delta-R) that many of us are just getting to know.  He is over from Spain and so adds a surprise factor to the panel, which should be fun.

Views on the recent acquisitions

John Rymer:  Given the context that I've been describing, where we've got a pretty substantial change in the industry — with IBM and SAP getting involved, and Oracle (who usually doesn't wait too long to try to one-up those two) — I'd like to begin by asking you your views on what this does for you.  I'm particularly interested in the vendors that are not enormous ... not the biggest vendors here.  How do you think this is going to affect the way you do business?  How do you think it's going to affect your opportunity, going forward in the market?  Do you think you'll look at changing your offering in the sort of value you emphasize? Can we start with you, Russell, and get your reaction?

Russell Keziere

As you say, the market turmoil is lending a new sense of urgency to people looking seriously at rules and, indeed, process.  Our customers are refocusing their efforts and are finding that, when they focus on customer experience, when they focus on governance and compliance, that the projects get a green light.

So, to answer your question, I think it's great that these acquisitions have been made because I think that more and more people are finding it acceptable to look at business rules, and it's becoming more of an established part of the IT vocabulary.

Our company is not big, like IBM, but all of our revenue is based on rules, as you know.  Our guidance to Wall Street this year remains north of $200 million.  So it's a sizable company, growing at about 35% a year, all based on rules.  There was a time, John, when you sized the rules market at $250 million.  So when Pega alone can get to those numbers that means there is some momentum.  With my fellow vendors here also contributing, we have a much larger market than we had five years ago ... larger than anybody knew.

Rik Chomko

I look at things and I say that there's still going to be a need for a strong, in our case, .Net rule engine that provides the foundation for authoring, storage, management, execution, and integration of rules.  No offense to any of the bigger vendors here, but acquisitions generally result in those products becoming part of a bigger product.  In those cases, in that bigger product, maybe the rules are going to get the attention they deserve ... and maybe not.

Look at (for example) Yasu, who was acquired by SAP.  The interesting thing is that SAP is not here.  And if you're not a NetWeaver client then you're not really going to be able to take advantage of the business rules function that's in there.  To digest NetWeaver — or, for that matter, even WebSphere in some respects — will be a hard thing for some of the clients out there who are really only looking for a strong decision-execution engine.

Garth Gehlbach

We welcome this recent activity in the acquisition arena.  I think it increases the visibility of business rules as a viable solution; it elevates rules as an important component in your enterprise and business automation architecture.  So, it's something that we welcome from the standpoint of having business rules get this greater attention. 

But I think that there's also plenty of room for innovative companies to offer solutions that are driving "orders of magnitude" type improvements to business results.  This is the area that we're going to continue to focus on.  As long as we are continuing to be standards-based and can address the integration issues that are likely going to continue in our industry, I think that there's plenty of room for us to play a role.

Carole-Ann Matignon

I agree with Garth; I think that these trends of platform vendors getting into the rules business is going to create a lot of acceleration for the adoption of the technology.  I don't know if it's going to slow down innovation, but it might dummy down the rules because if the main focus is business processes then I don't know how much pure innovation around decisioning is going to happen.

Here at the EDM Summit we are seeing more and more interest in bigger decisions — marrying business rules and optimization and predictive modeling ... all of those things together.  That's really the thing that I think will emerge from the market.  In addition to the platforms, there will be those players that provide a greater portfolio of technologies.

John Rymer

So, Steve, you get to be the counter-weight, soon to be part of IBM....

Steve Demuth

I have one foot in the smaller world and one foot in the larger world.

I think there will always be customers who look for 'best of breed' platforms, who want to put things together, with the best-of-breed business rules and best-of-breed business processes and other ESBs (things like that).  So, I expect that pure business rule competitors will continue to move ahead.

On the other hand, I think that business rules embedded in a coherent platform is a pretty appealing story for companies that don't want to deal with the integration side themselves.  They know that the integration is seamless out-of-the-box ... integration with BPM, integration with analytics, and those other sorts of things.

My expectation is that there will continue to be a 'pure' business rules market.  However, more business will be done in integrated business rules than in those pure business rules, just by the nature of the beast.  Technology is so complex, and most customers are looking for short-cuts.  Platforms are shortcuts; that's what Oracle, Microsoft, SAP, and IBM are trying to offer — integrated out-of-the-box solutions. 

Coming from the ILOG world, one of the things we've struggled with more than anything else is trying to service a lot of different platforms.  It's a huge burden on us, as a vendor, and being in an integrated platform may ease some of that.  On the other hand, I can't tell you what IBM's business plans are, so we may be continuing to compete as a standalone rules vendor as well.

John Rymer

I wonder if most of the integration concerns you're referring to, and that the others see, are with BPM?  Or is it broader than that?

Steve Demuth

I think BPM always stands out as the first place where you want to be integrated.  You can look at any of the conversations that are going on here this week.  Pretty much all combine BPM with business rules in some way. 

But I think that there are lots of other pieces.  For example, there is a role for business rules in master data management; there's a role for business rules in ETL; there's a role for business rules that combines with predictive analytics and optimization.  All of these are important points where business rules could do better ... could have these sorts of integration.

But you can't integrate with every flavor of every platform, and certainly BPM is the first one that comes to everyone's mind.

John Rymer

Jose?  You're perhaps the smallest company here on the panel.

Jose Garcia Ortega

First, let me apologize for my English — I have an interpreter.

I believe that my colleagues have pretty much summarized the situation, and I have really very little left to say.

From the view of the smallest company represented here, I believe that the fact these big companies are entering into this sector makes it evident that this is going to result in changes.  The big companies are going to provide visibility — more visibility — and this is going to have the effect of drawing small companies into the flow.  What the small companies will bring to the table is innovation.  The union of both forces is going to be very positive for all.

John Rymer

Thank you.

Decision Automation / EDM

John Rymer:  So, speaking of innovation — since innovation is so important — one of the themes we've seen here at the conference is interconnections.  We hear talk about (for example) enterprise decision management or master data management, etc., and each one of you could be playing a role, starting to work at that. Could you describe more fully how you view, particularly, the topic of decision automation, or EDM, and what you're doing to embrace it in your product sets ... whether you're working with other vendors or adding features to your own products.  Describe that for us. Let's start down at the other end this time.  Jose, you're up.

Jose Garcia Ortega

At Delta-R, in the last year, we have allocated a very important part of our efforts to decision making.  Through the Spanish government — working in conjunction with the government of our country — we have developed a project that has had a very positive result.  Based on that experience, we definitely believe that the merger of predictive model programs, along with rules, will be the path for short-term success for the sector.  So, in the next few months we're going to focus even more on decision making predictive models.

Steve Demuth

When we look at decision management at ILOG, what we're really looking at is putting together the right pieces — the right set of tools or methodologies — for potential customers, and then for customers to get to those pieces.  You've already seen in our products some things we've talked about — decision management, the integration of predictive analytics — and there will be additional things coming along.  The same is true with optimization, with simulation, and those sorts of things.  All of those are things we are working on, and you're going to see product announcements that integrate those sorts of things.  I don't see a lot of difference from vendor to vendor in terms of thinking about how that's going to go. 

I think the key thing that makes decision management accessible to potential users of business rules is bridging the knowledge gap (or methodology gap) in the sales process and in the post-sales support process.  It's a big step from believing that you have one automatable decision that you can put into the hands of a business user, so they can change some business rules to achieve agility, to getting to the point where you're taking full advantage of enterprise-wide business rule management and enterprise-wide vocabulary, integrated with BPM, and then using analytics and optimization to feed more intelligence into those sorts of things.

One of the things we've focused on is the methodology and the path toward getting that value ... helping customers understand what the first step can be, what the next step can be — how they can get increasing involvement of business users, increasing involvement of their analytics group, increasing involvement of OR groups — and to bring these sorts of things together.  At the end of the day, the technology isn't really what makes the difference.  It's being able to identify the problems that can be solved and bringing the right people to the table.  If you do that — and we try to help them through our methodology programs and our professional services — there's always someone in the organization that can glue the technology pieces together.

The other thing that's going to make a difference is to push forward with standards around the notion of business vocabulary and business modeling.  One of the real obstacles to doing that glue is the lack of a standard way of talking about a problem.  So, one of the areas we've focused on is trying to move ahead in standards around these ideas.

John Rymer

We're going to come back to standards.  I'm glad you raised that.

So, Carole-Ann, Fair Isaac's product is well known in this space.  Because Fair Isaac has a good number of the pieces, and has had them for years, where else are you going with it?

Carole-Ann Matignon

That's a difficult question — I could take an hour or two to talk about it ...

John Rymer

No, I won't let you do that.  <laughter>

Carole-Ann Matignon

Decision management is obviously something we are passionate about.  We see it as being the approach ... so it's not just technology.  It's also methodology and a complete new way of doing business, one that's all about automating the decisions.  For this we need to have a number of technologies that can collaborate together to solve bigger problems.

And why do we need to solve bigger problems?  Because there's only so much you can do based on regulation (which, obviously, you do have to do).  But, in addition, your experts can come up with new pricing, new ways of underwriting the business, and so on.  If you can tap into your data — your historical data or data pulled from the industry — then you can improve the quality of your decisions, the precision of your decisions.  And you can grow your business even faster.

Being able to marry predictive analytics with business rules adds a lot of value to your ROI.  Add optimization to the mix, along with case management, and this extends the reach of your decisions within the enterprise.

Where I really believe all of this is going in the longer term is into the improvement of the decisions — being able to run simulations, to predict how the decisions you are making can translate into revenue, profit (whatever metric you want to measure) so that you can fine tune the strategies ... improve them, redeploy them, capture more information, and then keep improving those decisions over time.  That is what is going to make the company successful.  Hopefully, next time around we'll be smarter in making decisions and be able to avoid another economic crisis like the one we're living in today.

John Rymer

Let's hope so!

So I'm hearing an emphasis not only on bringing these technologies together — predictive analytics and data analysis and so forth — but also monitoring the results of those decisions, constantly, to fine tune them.

Carole-Ann Matignon

It's both simulating and monitoring. 

The idea of running simulations, and what we call 'decision optimization', is something that's very important — being able to replicate into an offline environment what you think is going to happen, assuming that historical data is going to be a good indication of what's going to come tomorrow.

The second aspect, more dynamic, is how do you make the system adapt.  That's where monitoring — being able to extract the KPIs and to monitor, to alert, and to update your systems automatically — will become key.

John Rymer

Thanks.  Garth?

Garth Gehlbach

We're thrilled that the evolution of this business rules industry is heading toward more decision management.  We've recently announced a partnership with KXEN to be able to provide better quality decisions in predictive analytics, in the context of automating your decisions.

Whether it's intelligent decision management or enterprise decision management, it's really elevating decisions as a corporate, strategic asset ... being able to look at it that way, being able to apply the same business focus as you would (for example) in business process management.  It's something that is key in the short run. 

We like to put some emphasis on this idea of "time to solution."  It's not only about managing those decisions as strategic assets and making better decisions and including predictive analytics.  It's also around speeding up that time-to-solution — being able to start with an out-of-the-box type of tool — to be able to implement faster, to be able to change faster, to be able to have better tools for change management.  Those are key dimensions that are going to help accelerate the development of this industry.

Another important dimension is transparency.  This is something that is going to continue to be a hot button for those who are implementing decision management solutions — being able to have the business in control but also being able to have all of that business logic that you're managing as a strategic asset be transparent ... to be shareable amongst all stakeholders and to be able to manage it as such.

John Rymer

So, it sounds like partnership is very important to the way that Corticon's going to approach this opportunity ... working with other companies that provide some of the additional areas.

Garth Gehlbach

For certain key technologies.  For other things we're developing our own ... broadening our own solution areas. 

One thing that I haven't mentioned is a new product called "Dialogs."  It's in the context of getting faster solutions out and into production.  Dialogs is a decision-driven (or rule-driven) based web application development environment that allows for interactive web applications to be built quickly.

John Rymer

Rick?

Rik Chomko

Let's look back at the promise of decision management.  I like the umbrella under which you described it because it's got the predictive analytics and all that.  I want to go back to what Tom Davenport said today.  Let me read it:

Enterprises will not get better at decision making until they inventory key decisions, understand how they're executed, and determine how they can be automated.

I do think that this is one of the things we have to put first and foremost.  I don't think everyone today can take advantage of predictive analytics, whereas there are a lot of people out there who can still get a lot of benefit out of using a business rule engine technology to formalize, and then ultimately execute, the rules that they're interested in.

Along those lines, we're looking to provide more of the out-of-the-box solution patterns — rules inside a catalog in the enterprise — and exploring how those can then be shared.  There are a lot of inheritance problems that need to be solved, as well as rule composition, but that's where we're going to be focusing our efforts.

John Rymer

It sounds like "First things, first" is the attitude.

Rik Chomko

Obviously, we would look to partnerships for some of the other capabilities, if that presents itself.

John Rymer

Russell?

Russell Keziere

I will begin by saying that a decision is not static.  We get to a decision through a very messy, carbon-based neural net of people.  I mention that because I think that the path to a decision is 'process', and I was pleased to hear the imperative to bring business rules and process together.  And we have been there since the beginning —  we think of rules and process as being one.

So, since we are both a rules engine and a process engine, Pegasystems' approach has been to do whatever we can to get that messy, collaborative, people-based process of harvesting and defining the rules to the point where we have a library of decisions that we can trust for a limited time ... until we have to tap change management and start to change those rules that build the decisions.

From Pega's perspective we've also been looking at software-enabled methodology since we realized ... heck, we've got a BPM engine, let's use it to help the rules harvesting and authoring process.  That way we can manage the project of folks needing to go out and write rules, and document them, and test them, and to automate the testing, and to automate the change management, all using the BPM engine to help us in that process.  That's really been helping to collapse and accelerate the time-to-market.

John Rymer

Where do these topics like predictive analytics (and so forth) fit into your view?

Russell Keziere

We have people who need that especially for customer segmentation.  Last year at this conference we announced the Predictive Execution Optimizer®, which does PMML import into the business rule engine.  It's still very high on the customers' wish list, but their "do" list is another one.  They're looking for anything that can help them expedite and automate the process.

They also need to deal with the issue of having multiple rule systems across the enterprise — in other words, an unintended consequence of success is ending up with multiple rule (or process) silos across the organization.  As one of my customers (a top-five US Bank) said, "I went around the enterprise and preached the vision of a central repository of rules, and everyone loved it ... and now everyone has one."  <laughter>  And, like my 201K, if it weren't so true it would be funny.

Recently, Pega has made a couple of announcements that I'll mention quickly:  one is Platform as a Service, to help multi-tenanted distribution of multiple rules and process systems, as well as our Federated Business Frameworks, that takes multiple rules systems and federates them, their business intelligence metadata, for sharing.

John Rymer

So, basically, those folks can have their repositories.

Russell Keziere

Right, you have local control but, at the same time, federate the enterprise repository.  Right now it's just with Pega stuff but down the road I think this 'federation' notion is going to be important for people.

John Rymer

Great.  <to the audience>  So, if you have questions, raise your hand and we'll get a mic to you.  And while the mic person is getting to you I'll ask one more question to keep this moving.

Investment in Standards

John Rymer:  Speaking of standards ... I think it's fair to say that every company that's represented on this panel has employed proprietary language representation technology and methods forever.  There does seem to be growing interest in standards, but what I'd like to know is what your company is actually willing to do.  Are you willing to give up a proprietary advantage that you have now to invest in standards ... invest in making this happen?  Obviously, the more detail you can give us, the better. Let's start at this end of the table.

Russell Keziere

I think Steve Hendrick asked this question last year ...

John Rymer

So, hopefully, we've made some progress.

Russell Keziere

Well, we have.  I'll tell you what we won't do.  We won't compromise — lower the performance and capability of — the system that our customers are depending on. 

I think the issue we have, John, is that there are multiple standards out there.  There's a standard for business process; there's a standard for semantic web; there's a standard for business rules.  I guess what I'm looking for is some consensus and collaboration from about three different standards bodies, to come together to help be able to model the thinking of an organization in a better way.  If we can get to that maturity level, we'll be happy to support it and contribute.

In fact, we are contributing now, but we're not ready to (basically) cripple the system to go down to the lowest common denominator standard at this point in time.

Rik Chomko

I just don't see it being likely until some of the bigger vendors get on board ... like IBM and Microsoft and Oracle.  We're not going to be able to drive that as effectively as they will be able to.

John Rymer

Why?

Rik Chomko

Because they're going to be the ones that will force the market to adopt it.

John Rymer

I've had conversations with people at IBM who would find what you say interesting ... that they could force adoption of anything.

Garth Gehlbach

However unlikely it is that there will be agreement on a standard, I think we are very well positioned to be able to support it.  That's because we are model-driven ... we are model-based.  We model and persist these rule models in a high-level language that is independent of any deeper technical language.  And then we generate, automatically, the code that needs to execute on the various platforms. 

In fact, how far are we willing to go?  In our past we have generated code that runs on another legacy vendor's engine.

John Rymer

But, as far as standards go, somebody else has to provide the resources?

Garth Gehlbach

We're ready to support the winner.

John Rymer

Carole-Ann, is Fair Isaac going to bring its huge resources to bear here and step in front of the parade?

Carole-Ann Matignon

What's missing today is a driving force to pick the right standard.  There are so many ways to approach standards.  There are lots of wrong ways of doing it and lots of right ways.  We can pick up the right way if we can get customers to drive it ... to tell us, "This is why we need standards."

If we're just doing it for the sake of having a standard I don't think it's going to be successful.  That's not the right approach.  But if we get an army of customers — people who are using it — to say, "We need this standard because we want interoperability (or we want X or we want Y), and this gives us the framework," then the vendors can get together and solve the problem. 

That's what I'm waiting for ... for people like you to stand up and say, "This is what we need; this is what we want."  Then we'll do it.

John Rymer

I should refer to you all the people who call me about this so you can hear about it.  I hear about it all the time ... all the time.

Steve?

Steve Demuth

I think standards work in an industry at two levels.  You can have standards at a very low (implementation) level — and these become a bootstrap for multiple vendors to work in a similar space.  We have all sorts of standards like this in the world ... for information interchange (and those sorts of things).

The other level at which standards work is at a significantly higher level.  The paradigm there would be the SQL standard.  The neat thing about the SQL standard is that it specifies a 'what' but not a 'how', and it does it in a sufficiently neutral way that a lot of vendors have been able to innovate underneath it.

What's missing in the business rules space is this SQL-like standard.  And that's not an execution language standard; it's not a PRR-type standard.  It's a standard for how you express business logic as business rules.  Once we have that, customers can confidently say, "I've written these business rules.  Right now, today, I'm executing them in ILOG's engine.  Tomorrow I may need to execute them on the Microsoft platform using a different rule engine."  Or I need to execute them on this exotic platform that no one's really treating as an environment except this one specialized vendor.

I think we'll get there, like Russell says, when a large vendor says, "It's in our competitive interest to have this standard so that we grow the ecosystem in a way that benefits us."  Until then, a number of small vendors competing vigorously in the space will never define such a standard.  I think we can talk about it forever; we will talk about it forever; we have talked about it forever.  Until someone comes along and says, "I'm planting my flag here; I've got forty percent of the business, and every customer you little vendors are going to run into is going to be interested in this." ... then it will happen. 

I don't know when that will be.  Obviously, I have dual loyalty in this part of the conversation at this point.

John Rymer

IBM certainly has a track record of taking on these things.

Steve Demuth

Yes, and if you look at IBM's track record it's clear that when IBM takes on a standard it's because they believe the market is sufficiently mature that it will enable them competitively by giving credibility to an ecosystem in which they will thrive.  That's when they'll do it.

John Rymer

Right! 

Jose?

Jose Garcia Ortega

I believe that standards are not going to be set forth by the vendors or the providers, but by the client or the end user.  In that sense, from our company, we have indeed listened to some requests from our clients.  We see movement towards standards, with more standards geared toward predictive models, which include also definition rules.  I also don't know what the timing will be, but on this I must agree with my colleagues — I think that next year, by this time of the Forum, we will see progress.

John Rymer

I guess this is one of the potential consequences of the consolidation ... maybe IBM will get involved.  Personally, I don't have any confidence that SAP will take this on.  But maybe IBM will get involved.

from the Audience

I was intrigued by what Steve was saying ... particularly because, Steve, you represent IBM...

Steve Demuth

I want to be clear.  I don't yet represent IBM.  They are trying to buy ILOG.  They haven't yet bought ILOG.

from the Audience

Okay...  In any case, I thought your model of SQL was on target, and I certainly hope that you (as a vendor, if the acquisition goes through) would take leadership in establishing this.

And I need to take Jose and Carole-Ann to task a little bit.  I think one of the adoption inhibitors for rules is exactly what Russell pointed out — that one of the huge benefits of rules to the enterprise is the ability for multiple silos to interact in terms of their logic.  So I think that waiting for the customer to bring the solution to you, as a standard, is not acceptable.  I want to articulate that I would strongly encourage the biggest vendors on the panel to take a leadership position on standards.

I'm sorry — that was a terrible question.

John Rymer

Actually, it was a statement.  But seeing as you represent Software AG, the other German software company, do you think that Software AG would contribute?

from the Audience

Certainly, we are keenly interested in the outcome.  So, we could provide a neutral perspective.

Steve Demuth

Even though there wasn't a question, I might address your point just a bit....

from the Audience

My question is:  what do you think?

Steve Demuth

What do I think?

One thing I think is very important is that we tend to talk about business rules in a rather monolithic way.  So, when we talk about standards and the potential benefit of standards to customers (and to vendors) I think it's a little easy to get caught up in some silver-bullet thinking.

When I look at practical projects that utilize business rules to create decisions I rarely see a project in which all of the logic is expressed as a business rule, in the sense we normally think of.  What we see is a combination of text-based rules, which you might express in some existing standards, along with things like decision tables, decision trees, and (sometimes) analytic models that come from PMML.  Sometimes there's rule-flow, if they are from one of the vendors that offer rule-flow. 

My point is not that any of this is a bad thing.  My point is that, from a customer perspective, if you think that once we have a business rules standard we're suddenly going to have interoperable logic, you're wrong — we're not.  You're going to have some subset of your institutional knowledge captured in a form that is standardized.  And that subset is almost certainly meaningless by itself in terms of a decision.  We have to realize that with 'standards' we're chipping away at only one piece of the problem here.

John Rymer

Certainly, interoperability is one potential benefit.  There are other aspects that we could address with standards as well.

We have another question?

Summarizing the impact of the IBM and SAP acquisitions

[from the audience]:  John, this question's for you.  Could you summarize the impact that the entry of IBM and SAP is going to have on the industry?  I've heard the panel members talk about their different companies — where they're moving — but I'm still unclear on what we think the real impact of IBM and SAP is going to be on the industry.  What difference would it make if they did not make the acquisitions they are about to?  What's the bottom line?

John Rymer

If I could I'll characterize what I heard the panelists say and then I will talk about what I think in terms of what's the same or different.

I agree with you that everybody believes that IBM and SAP coming into the market will result in a rising tide.  There will be more people who will take a look at this technology and consider it seriously because now it's 'safe' — it's available from two of the largest software vendors.  I think that's right.

The first thing that came into my mind when I learned that IBM had bid for ILOG was Lotus Development Corporation's experience.  When IBM bought Lotus, within about 18 months IBM had doubled or tripled the Lotus Notes business ... without changing a thing.  Believe me, I've been a user of that product for years and it's terrible!  <laughter>  They didn't change the product but they tripled the business ... because they had more feet on the street, more consultants, more credibility.

Now I'm not saying that ILOG is a terrible set of products.  I'd better watch out here.  <laughter>  Certainly I'm not saying that.  I think this could be one of those cases where ILOG could basically go on vacation and not do anything, and IBM could probably still grow the business, just by getting in front of more people.  So, I think that we will see greater growth — more people coming in, healthier companies, healthier suppliers, a rising tide that will float many boats.

The other thing that I think is significant about the big vendors getting in here involves availability of skills, which is a huge problem ... one that I hear about all the time from clients.  IBM is an enormous services company.  They've already got practices around business rules and constraint-based programming (and other related topics).  Now they're making a bet on rules products.  I hope that the result will be a further investment in consulting skills, as well as training and other developer materials that will help to improve the availability of skills in this market.

Obviously, IBM is going to focus on ILOG very heavily, but IBM Services does business with Fair Isaac, with Corticon, with Pega.  So hopefully we'll see a greater investment, in general, in what I see as one of the biggest problems — lack of skills.  And that will pull other companies along with it.

That's how I see it.  I hope that's helpful.

How 'rules management' and 'decision management' relate

[from the audience]:  Are 'rules management' and 'decision management' synonyms?  And, if not, what is the difference?

John Rymer

What is the difference?  I think you guys may have described this — the difference between rules management and decision management?

Russell Keziere

I think that the question points to an attempt to bring rules more to the forefront of the business.  I think that the intent of changing the name is to reflect the experience of people who are involved in rules projects.  It's not so much that the rules themselves have changed but that the perception of the importance of the rules has changed.

John Rymer

So they're the same thing?  Two terms for the same thing?

Russell Keziere

It's marketing.  But I think it's also telling a difference ... the difference of how rules are being perceived in organizations today.

John Rymer

Does anybody disagree with this?

Carole-Ann Matignon

Yes, I do.

To me, BRMS is about executing the rules, of course, but even more it's about exposing the rules to the business users — having this ecosystem of rules maintenance applications, verification and validation services ... everything that makes it a complete solution.

Decision management is a superset.  It includes BRMS but it also includes some other technologies, to increase the precision.  It's not just about the agility; it's also about the precision, the consistency, and some other things.  So to me it's a small piece versus the entire discipline.

Garth Gehlbach

There's one dimension we believe in strongly and that is:  what's the design center?  Is the rule the end-all and be-all ... is 'rule' the asset that you are trying to manage?  Or are you trying to manage decisions, and the rules are simply supporting artifacts?

Also, I believe there's another dimension that adds in additional decision-types of processing:  predictive analytics, etc.  That's where this is evolving.  There's a subtle but important distinction between rules as the center of the universe and decisions as the center of the universe.

John Rymer

So it sounds like the implementation is same technology....

Garth Gehlbach

The core of it, yes.

John Rymer

Jose, do you have a view on this?

Jose Garcia Ortega

Our philosophy is very similar to Fair Isaac.  I am going to make an attempt to simplify, and sometimes simplification is a terrible thing.  Simplifying, I would say that 'decisions' is the same as 'rules' plus predictive models.

John Rymer

To summarize, I would say we have a disagreement here.  Those who see a difference are saying that there are additional features or capabilities — predictive models, decision simulation — that you would add to business rules processing to get to decision management.  I subscribe to that view.

On the other hand, there are others who are saying, no, it really is basically business rules — that's what we're using to automate decisions, and there really isn't any difference.

Russell Keziere

From my perspective, John, those rules exist within a business process management suite.  In context, that 'rule' becomes part of a 'policy' ... becomes an enhanced/advanced asset by virtue of its being part of a consensual process.

So, you can call it a 'decision' or you can call it a 'policy'.  Basically it's a very mature rule.  And the business rule management system is an integral part of the business process management system.

John Rymer

So you would assert that business process has to be part of the mix.

Russell Keziere

I like predictive modeling as well.  I'm happy to have that.  But you do have to bring 'process' into it.  That's where the rubber hits the road.  When the rule hits the business is when you involve process.

John Rymer

Okay, so we have three views.  It's a starting point ... better than five.

Vitality and maintainability

[from the audience]:  My question is about vitality and maintainability.  A lot of change is happening in each of the vendor's products.  How do I ease that pain of vitality when a new version or release comes out?  What are the vendors doing to help customers in that regard?

John Rymer

When you say 'vitality' do you mean reliability?

from the Audience

No, vitality means that every year a new release of the product comes out, and my old application — what I've written in the old version — no longer runs in the new one.  How are the vendors preparing customers for that?  I don't want to have to rewrite my application every single time a new version comes out.

Garth Gehlbach

This sounds like an ease-of-migration question.

John Rymer

It sounds like backwards compatibility.  So, don't we have backwards compatibility from any of you folks?

Carole-Ann Matignon

Yes, we do.  <Others>  Yes.  We do.  We do.

John Rymer

My understanding is that backwards compatibility is something that all vendors in this space support.  I'm a bit surprised by the question.

Rik Chomko

I will mention that, at some point we may end (no longer support) a certain SDK method or SDK call.  I think this is fairly typical.  When this happens, we do give quite a lead-time for correcting that code — in our case it's something like a three-year cycle.  We'll maintain it for another year after we've said that it's no longer valid.

But if you're talking about the rules themselves — where they're stored — those generally live by themselves and they don't have to go through any change.  (Or, if they do, they will go through a migration process.)

We do a lot of testing on the backend every time we do a build of our software, just to make sure that that kind of backwards compatibility is there.

John Rymer

Do you all provide engineering services, to help with these kinds of issues?

All

We do.  Yes, that's standard.  Yes.

Steve Demuth

The backward compatibility issue can be a subtle sort of thing.  If you took a set of rules that you'd written for JRules 3.0 back in 2000 they would still execute on the current version of the product, and on the next version of the product, using the same APIs that you had back then.  There would have be no cause to re-engineer your application.

On the other hand, if you wanted to take advantage of some of the newer features of the product you would have had some things to consider.  Originally, you'd have been using the rule engine as a standalone POJO API and you'd have been writing your rules in the technical rule language.  So if, between then and now, you'd wanted to take advantage of the business language — if you'd wanted to take advantage of managed execution services, or you'd wanted to take advantage of advanced user interfaces for authoring rules — then indeed you would have had to re-engineer some aspects of your application to take advantage of that.

What you're seeing is a technology area that has been advancing very rapidly and is in considerable ferment, and there have been some engineering changes required along the way.  Frankly, I think that's going to be settling down because I think the industry is more mature and most of the products have most of their moving parts.  Now it's a matter of improving them, and improving their communication with each other.

To answer your question, John, certainly ILOG (and I think this holds for the other vendors here) does offer some type of professional or engineering services to help customers make those sorts of moves if they need to.

John Rymer

Garth, do you have a comment?

Garth Gehlbach

Yes, just one quick point I want to bring up, which is unique to Corticon.  Since we are model-driven, you can define your rules in the model, in the Studio environment, and then you are able to deploy into multiple execution environments, with the same ruleset.  So, not only is there backward compatibility to migrate from version to version, but you can move your whole execution environment from Java to .NET and not change the rules at all.

Carole-Ann Matignon

It's not unique though.  <Others>  No, that's not unique.

John Rymer

I think we're out of time.  To the panelists, and to the audience, thank you very much. <applause>

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