An interesting use case from the travel industry came up in conversation recently: an airline decided to upgrade its fraud detection efforts to be real-time and event-driven. This exploited their existing analytical applications for fraud detection in areas like ticketing, but made sure the events fed to them and the responses from them could be correlated and actioned at the time of the fraud (rather than in a report after the event). Result: something like $12M savings in the first year.

Not bad. Perhaps TIBCO should change the “2 second advantage” catchphrase to something like the “$12M advantage”!

Hopefully this customer will publicly present this application (along with some of their other CEP applications) at TUCON this year…

Note Joe doesn’t ask if it is required, necessary, or useful - just affordable.

It’s an interesting question. Here are some additional thoughts:

1. EDA and CEP does not replace BPM, SOA or databases.

Events still drive processes (human) and services (IT) - and indeed CEP can be thought of as an event driven process or service. And events end up being needed to be stored for historical analysis / analytics - so a database is still necessary somewhere in the architecture…

2. Are EDA and CEP less affordable than SOA and databases?

Not really. The technology is getting pretty mature now - consider the ubiquity of messaging middleware - and CEP incorporates the “best practices” of IT from SOA and database worlds - e.g. declarative rules, model-driven, object-oriented, distibuted storage, event streams and patterns … but this is still a “value” metric, not an “affordability” one. The affordability comes down to development and deployment costs versus ROI: development can be quicker, and deployment can often avoid a boatload of application server nonsense (i.e. administrative stuff that is not business logic). And the ROI of the ensuing “operational intelligence” can of course be immense.

3. Is “open source” the saviour of affordability?

I saw this was one (and a typical) response to Joe. Again, not really - open source tooling has its place, especially for educating ourselves. But affordability is a lifecycle issue not a development tool cost - and I am reminded by the customer who spend a few months trying to build something with an open source tool that was solved in a few weeks with TIBCO BusinessEvents. And most CEP vendors provide evaluation copies that mitigate up-front costs. Remember “open source” is just one more business model option for “vendors” (where the “vending” is of support, maintenance, services etc).

4. Is there any proof of affordability vs value etc?

I can’t say I’ve come across many folk who have said “nice but we can’t afford it” - from a cost perspective anyway. Often IT budgets are consumed in getting existing IT systems functioning - the affordability is affected by the non-affordability of existing IT infrastructure. Most EDA and CEP systems of course integrate rather than replace conventional IT, and there is an additional emphasis - not burden - on IT architects in organisations to understand what fits where. But architects I have met like EDA and CEP (albeit I am unlikely to meet uninterested architects!). Some use cases show pretty powerful ROIs.

5. If EDA and CEP is affordable, what is the problem?

Entrenched views. CIOs bought up on data-first mentalities. Not enough “thinking outside the box”. Anything that resists paradigm shifts. Which is fully understandable, and why there will be steady, not revolutionary, growth in CEP and EDA markets. Although the published growth data looks pretty impressive!

The full discussion is on ebizQ here.

Opher Etzion recorded some action items for the Event Processing Technical Society at the EPTS5 symposium last week. One of these was “promotion of EPTS” as the go-to resource for event processing information (hence the irony that these action items are duly  listed on Opher’s blog and not anywhere on the EPTS web site).

One of these was the idea of an ROI Working Group to share and propagate ROI stories (this being a safe activity for vendors to share as customers seeing ROI will not likely be poachable by other vendors!). But how should ROI be measured and reported?

Coincidentally a colleague just mentioned an airline customer who just went live with a new track-and-trace CEP application -  an application with an estimated €2M per year payback.

Some observations here:

• This was an IT project completed during a big downswing in the airline industry, whilst many other conventional IT projects were being cancelled or postponed - but the ROI was compelling enough for this project to survive.
• The application used a distributed rule engine architecture, exploiting TIBCO BusinessEvents‘ agent-based architecture.

Another coincidence: I was just listening to Paul Coby, CIO of BA, talking about the need for lean and agile approaches in the airline industry, at IRMUK’s BPM2009. His message was ‘there are no IT projects, only business projects’ - all with business goals and KPIs to be measured. Model-driven CEP applications like the airline use case above certainly qualify as lean and agile… I wonder if BA is exploiting CEP like its competitors are?