Analysis

What's happening in CEP?

Philip Howard By: Philip Howard, Research Director - Data Management, Bloor Research
Published: 18th February 2008
Copyright Bloor Research © 2008
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The complex event processing (CEP) market is evolving. It has got beyond the stage where people are worried about what to call it: should it be called CEP, ESP (event stream processing) or just plain event processing? Indeed EPTS (the event processing technical society) will shortly be releasing an official glossary of terms.

That isn't to say there isn't still debate. For example, the EPTS will be defining an event as "something that happens" which is fine but raises the question of whether when it happens is relevant: is this part of the event or metadata about the event? This is significant because on this depends whether you can have such a thing as a non-event. Now, what you and I would call a non-event (in real life that is) is a period of time in which nothing happens, but in a CEP environment what has happened is that an RFID scanner, say, has made multiple readings during which the only thing that has changed is the timestamp. So, is this an event or a non-event?

Anyway, enough of the theory. Arguably, the most interesting thing to have happened in the CEP space recently is the acquisition of AptSoft by IBM. Not that this is worrying Progress or StreamBase because AptSoft has not made much (if any) impact on the high performance end of the CEP sector in capital markets. And, indeed, IBM's reference to AptSoft as BEP (business event processing) implies cognizance of this fact. Where we will see AptSoft in IBM terms is primarily as a part of the WebSphere suite where it will play a role in SOA implementations, for example. Progress Apama is also, incidentally, directed at this market as a part of the Progress SOA Suite. When Oracle finally introduces its own CEP product (my guess is that it will [and should] scrap BEA's offering) it will no doubt be aimed in the same direction; and of course this is a natural for TIBCO.

As far as capital markets are concerned the three main players are clearly Progress Apama, StreamBase, Aleri and possibly Coral8, arguably in that order. However, what's interesting is that there is an increasing demand for back-ending these systems with a data warehouse (when the market for RFID finally takes off the same is likely to apply there as well), an area which Sybase is focusing on with its Real-time Analytics Platform, as is Vertica. This sort of functionality is particularly in demand by hedge funds so Kx Systems' implementations in these environments may be under threat. As an aside, and in case you are wondering why I haven't mentioned any of the more well-known names in the data warehousing space, it is worth noting that Sybase IQ, Vertica and Kx all use column-based relational databases that are particularly suitable for the sort of high performance ad hoc analytics required in these environments (though this would also be true of the likes of Netezza).

Another major market for CEP is intelligence services, though this is largely untapped outside the United States. Here, StreamBase and AgentLogic are the leading vendors, in part because both of them are (partly) funded by (indirectly) the CIA. However, while this certainly represents an entrée in the States it doesn't mean so elsewhere. Moreover, the nature of the applications involved is highly secret, so neither StreamBase nor AgentLogic would be able to claim very much in the way of hands-on experience in these environments. In other words, the opportunity is there for other vendors to penetrate non-US intelligence markets.

As I have commented previously there are a lot of use cases for CEP but not many markets. Certainly there have been a number of implementations in transport and logistics (where TIBCO has been doing well) but my suspicion is that the next major market will be in manufacturing and, particularly, in process manufacturing or in other process sectors (such as power stations). Demonstrable benefits can be achieved in productivity gains by employing CEP in these environments (Progress and Avaya can both quote examples) and, perhaps most important, shop-floor environments tend to understand the concept of events so that the sales cycle should not be so long.

The market for CEP is clearly alive and kicking but it is still a minority sport: Progress Apama has something over 75 customers, StreamBase approaching 50 and these are the two leading vendors. AptSoft had 19 prior to acquisition. A total market size of around 200 customers to-date means that CEP is still only tinkering at the fringes today, but the possibilities are huge.

Reader Comments

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18th February 2008: 'John Foley' said:

It was widely believed that StreamBase was hoping to be in IBM's acquisition cross-hairs so the AptSoft deal raises suspicions of either limited product substance beyond the hype their former CEO espoused or issues regarding Stonbreaker's presence that could not be mollified. In any case, your at the moment depiction of the market is accurate. One has to wonder how long these niche players could sustain themselves on their own. It would seem that Coral8, Aleri and StreamBase would be ripe as none are growing fast enough organically to be long term independent solution providers and they all seem weak on the partnership front. As an aside, Oracle's acquisition of Netezza looks to be imminent.

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18th February 2008: 'Mark Coolidge' said:

Streambase has 50 paid customers in captial markets? I'd like to see a list. It's more like 5-10. How about the fact that there entire senior managment staff has been replaced in the last 6 months? Why would that be? Because there are no revenues and the VC had to step in (New CEO comes from VC) to try to save it. They have totally been driven by marketing hype and they used up all their money by doing so. I wish analyst views would be more in line with what actually goes on with customers.

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19th February 2008: 'Francis Marion' said:

I think there might be some confusion on the part of one of the posters. Yes, StreamBase changed CEO's last summer, right after raising their C-round of funding.
http://boston.dbusinessnews.com/shownews.php?type_news=latest&newsid=130029

Their website says they were founded in 2003, so a change in management like that is not unusual for a VC-funded start-up after 4 years. Who keeps a job for more than 3-4 years anyway nowadays?

Seems that more of the management changes have happened at Progress Apama, so maybe the previous person who posted was confused with the two companies since they're both in the Boston area. I believe the GM of the Progress Real-time/Apama division left for personal reasons last summer. Then the VP of Worldwide Sales and VP of U.S. Sales left as well (see below).

http://www.prnewswire.co.uk/cgi/news/release?id=207588

http://www.a-teamgroup.com/article/quod-financial-bags-apama-salesman-andy-menzies-for-electronic-trading-push/

Regarding Aptsoft, I believe it is fairly well known by now that the IBM acquisition came about from the company being shopped for sale by a firm that specializes in helping companies find an acquirer. The IP came from the original Wheelhouse, which was re-capitalized and restarted after burning through about $60M in VC funding.

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19th February 2008: 'Philip Howard' said:

Regarding StreamBase customers. These are by no means all in capital markets: Bioware, for example, is not in capital markets. The same thing applies to Apama - Progress has a number of customers for CEP outside the financial space.

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19th February 2008: 'Pussy Fatcat' said:

".. which is fine but raises the question of whether when it happens is relevant: is this part of the event or metadata about the event?"
****
See also, "event attribute", and "event timing" in the same Glossary
http://complexevents.com/?p=195

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19th February 2008: 'sr' said:

That is a highly interesting post regarding Streambase customers. I would like to see that list as well! Moreover I would like to see a confirmation of the 75 Progress Apama customers who have applied that solution to their businesses (a quick look at their webpage reveals the opposite – Apama is just another product of Progress).
Currently it seems that CEP/ESP vendors in the US struggle with some problems to bring their event processing solutions successfully on the market. As a consequence parts of the CEP community are questioning if CEP is really the way to. The strange thing about these discussions is that here in Europe the businesses with CEP go into another direction. Just take a look at the CEP vendor SENACTIVE with its references in fraud detection/prevention, marketing and logistics across different industries.
My point here is that the analysts out there should take a closer look to Europe and maybe they will find out that something is missing in the vendor order of Apama, StreamBase, Aleri, …

Just my two cents

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21st February 2008: 'Jack Handy' said:

I do not believe Streambase does not have 50 customers in Capital Markets. In fact, it is widely known that they charge prospective clients for pilots just so they can include them on the "customer" list. Clever marketing.

Based on the technology performance, business approach and overall likability, I assert that Aleri and Coral8 will come out on top over the next few years.

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