"End-to-End Java: The Reality is Now"

John M. Thompson, IBM Sr. Vice President, addresses Java Internet Business Expo (complete text)

August 26, 1997

It's great to be here and to be one of the speakers kicking off the world's first JIBE. It's interesting; I think that McNealy, Barksdale and Schmidt coming East could be the beginning of a whole new era -- kind of East meets West.

Actually the fact that JIBE's here in New York is proof the Web has gone Wall Street. Hard core business people are starting to see great value in the Internet and Java is a big reason. Java brings business two very significant benefits. One is standards and connectivity. The other is substantially faster application development. That's what I want to talk about today.

I'll start by looking at today's environment and the move toward a networked economy. Next, I'll take you through how some specific customers are using Java and the benefits it's delivering. And then I'll finish up by talking about what's being done to strengthen Java across the industry as well as at IBM.

The Environment

To start, let's look at the phenomenon of the Internet.

Even though purists would say the Internet's been around for a long time ... the fact is ... that in less than five years, since the commercialization of the Internet, more than 50 million people have connected. That's a huge number of people in a very short period of time ... which says - this is one of those technologies that's a fundamental game changer.

To put it in perspective, it took 13 years for television to reach 50 million viewers. And 38 years for radio to reach 50 million listeners. And that points to the fact that we're in one of the biggest shifts in history ... a shift that is leading us to a networked economy ... that will affect every business, every institution ... and the way we all work and live.

Now, I believe that one of the first places that the networked world will mature ... is going to be in business. Entertainment ... full motion video to the home ... advanced communications ... all of those will happen ... but it may take some time ... because it's not clear who will pay. I submit adoption will happen much faster in business ... because the cost of the equation closes here much more easily. It's where cost avoidance and the opportunity for new revenues ... offset the costs of implementation.

When businesses can use networks to connect to each other ... they can reduce cycle time ... and speed time to market ... in many cases, collapse steps in their supply chain. And when businesses can sell directly to consumers ... many of the costs of buildings, inventories and personnel can be eliminated ... while at the same time, new markets and new revenues can be built.

Business will use network computing to let people do all the things they do today:

All the things they do today .. only they'll do them better ... with lower costs, further reach and improved customer service.

Network computing isn't about browsing ... it's about transaction-intensive applications running over private and public networks, using Internet technologies. And this is where two-thirds of all of your new information technology investments are predicted to be spent over the next five years.

Let me show you some information from surveys we've been doing on 1,000 representative businesses and institutions from around the world.

This snapshot was taken a year ago, in the third-quarter of '96 ... and it shows the percentage of customers doing progressively significant applications using Internet technologies. On the far left you see that 80% of the companies have at least one Web server and basic Internet access ... simple e-mail perhaps. The percentage drops to about 25% when you ask how many are doing static publishing of their product-line or company information.

Then we cross the chasm ... to the real business investments. The next category is about using the technologies for collaboration and workflow.

These are team-based applications that flow work ... usually in the form of documents - to the various individuals in a business process.

These processes usually run over intranets and can run inside a business ... or span across several organizations.

Here the percentage falls again ... to 18%.

Next up the business value chain is what I've called customer self-service.
This is where an end-user extracts information from a database to help them do their job.

It's a one-way information flow, although seeing the data may precipitate a secondary action -- like transferring funds when you see that your account balance is low.

Here again, the number drops ... this time down to 10%.
And finally, on the far right is real-time transaction processing ... where a database is updated and money or something else of value, changes hands.

Only 4% of companies reported that they were using Internet technologies to do this more mission critical work ... when we asked a year ago.

Now let me move the clock ahead six months ... to the second quarter of this year.

These are huge increases. And when we asked these same customers where they thought they'd be in another six months ... at the end of this year.

Finally, the survey asked where they expected to be at the end of 1998.

I won't go through all the data ... but the transaction processing number on the far right ... went up to 42%

Well, if you don't take anything else away from this morning, please, take at least, these three messages.

First, the move to Internet technologies for business applications is happening quickly.

Second: It's happening because the speed, lower costs and application reach offered by network computing are helping businesses solve their most pressing problems ...

Problems like:

And solutions to these problems are the keys to

The third message is that its important to start out with the right foundation.

A foundation that will grow with you ... as you move from simple Web presence ... and scale up to more beneficial applications like collaboration, customer self-service ... and transacting commerce.
Java's a critical component of that foundation ... it delivers benefits today ... and is an important ingredient in providing the base for future growth.

Let me show you some examples.

I'd like to start by having a few customers ... tell you their story ... themselves. Roll the videotape please.

Customers achieving real benefits from Java today ... let me tell you more about three customers.
Let's start with the National Institutes of Health, who have done some terrific work in the collaborative information area.

The National Institute of Health is one of the world's foremost biomedical research centers and the Federal Government focal point for biomedical research in the U.S.

Their mission is to uncover new knowledge that will lead to better health for everyone ...

And to achieve their goals ... they support research being done in some 1,700 institutions around the world.

One of their biggest challenges is to allow some 35,000 investigators to access more than 20 years worth of research ... which is stored in multiple forms ... in multiple places ...

... documents, forms, mag tapes ... even storage closets.

Currently, researchers and clinicians who want to investigate a particular disease, have to go through the Institute's vast store of paper ... and archived data -- in order to gather information.

So to increase their researcher's efficiency, the National Institute of Health is in the midst of a project that will put all their current, archived and paper-based data ... into one place and make it easier to access over an intranet.

They looked at a number of different technologies to do this architecture and chose Java as a key part of the solution ... for several reasons.

First -- their users have Macs and PCs using multiple versions of Navigator and Explorer ... so they need cross-platform client access.

Second -- they wanted a solution they could manage centrally, without having to support local installations.

And the third reason they chose Java -- was because of the multi-platform server environment within their extended organization ... those 1,700 affiliated research organizations.

And Java was the clearly the best way to accomplish these goals.

Now let's move up the application food chain ... to talk about using Internet technologies to enable customer self service.

Econometrics is a market research firm based in Chicago.

Their product is business-to-business and consumer-based market intelligence ... which is delivered on a custom basis using algorithms the company has developed.

Although the firm only has about 25 people ... their new Java-based application is helping them reach new customers around the world.

This new service, called Market-Online will enable authorized users to make customized queries and get timely responses any time of the day ... or night.

Econometrics selected a Java-based solution for its ease of use ... and the benefits of delivering a cross-platform system that users could access regardless of the browser or desktop system they're using.

From customer self-service, let's move on to transacting business ... and talk about KeyCorp ... one of the nation's largest financial services companies.

KeyCorp's new Java-based Auto Finance system will offer consumers a simple, two-step process for buying a car over the Internet.

First customers will be able to shop for a new car online as part of a partnership between KeyCorp and Autobytel.

Then the user will be able to apply for an auto loan ... which will be automatically processed by KeyCorp over the Internet.

To the consumer, the process will look like a simple and easy way to buy a car without leaving their home or the office ...

... but to Key's backend systems ... these transactions look like another loan application that was submitted and is handled through their traditional approval process.

That's because, instead of writing new applications ...Key basically put Java wrappers around their existing CICS-based transaction systems ...

... thereby extending these systems to the Web.

The benefit to Key?

Time to market.

Instead of taking years to rollout a new suite of applications ... Key used Java to extend their existing systems ...

and they went from concept to operational in 60 days.

From simple access and static publishing ... through collaboration, customer service and business transaction applications ....

... these customers are transforming their business in the networked world ...

... and Java is helping them do it quickly and productively.

Now, let me change the focus a bit, from the types of applications people are implementing ... to the specific benefits that Java is bringing to Information Technology ...

... And I think there are three.

The first is standards and true cross-platform connectivity ... which gives you flexibility, choice ... and an environment that will grow with you.

Second is increased programmer productivity ... and through it, faster time to market and reduced costs.

And third, Java allows you to leverage your existing applications and systems ... which again speeds time to market ... and reduces costs.

Let's talk about the standards and connectivity that Java brings to the world.

Perhaps the most profound change that the Internet has brought to the I/T world is a culture of standards ...

... and it's this very capability that has permitted universal connectivity and the value that those 50 million plus people signed up to get.

And when you count the intranets behind firewalls ... it's really several times that 50 million.

History has shown that before any technology can become ubiquitous in business and society ... it must adopt standards ... to permit universal connectivity and reach.

Electricity ... the telephone .. radio .. TV broadcast ... consumer electronics ... have all gone through these phases.

Each of these industries all had competing standards at one time ... as the companies involved tried to gain unique advantage.

But in the end, broad industry-wide standards prevailed because the market demanded them and the industries needed them to move forward.

The same thing is happening in the I/T industry ... and it is fundamentally spawning the networked economy I talked about earlier.

Now Java is a major part of this culture of standards.

It is our best opportunity ever, to tackle the most complicated area of I/T to bring standards to ... which is application development.

The benefits of this come from, as you know, the "write once, run everywhere" capability that we are creating with "100% pure Java."

Freedom from writing multiple versions of applications to run on different browsers, clients and servers.

But there's another benefit ... which is less talked about.

And that is the flexibility that comes from the ability to separate application "development" ... from application "deployment."

One of the great time burners in application development has always been the work required to synchronize these two efforts ...

... and the rework necessary when one of them changed.

Once you picked an architectural platform, you became a prisoner of that architecture because the porting costs were so high.

It's now possible to quickly put applications together with the peace of mind that they'll run later on whatever platform makes the most sense.

For instance, you can get a pilot going on a small PC server, test it ... and later scale it up to run on a large UNIX SMP.

And when that's successful, you can deploy a worldwide version on a mainframe.

So with the flexibility of Java ... and 100% pure Java VMs everywhere, we can capitalize on having the freedom of choice for deployment.

And while I'm sure lots of skirmishes will continue to take place ... your understanding of the historical need for standards ...

... and your insistence ... through your purchasing dollars ... that they be adhered to, will have huge rewards.

Now, the second major benefit of Java is programmer productivity. Productivity is why there are now

Part of the reason comes for the standards environment I mentioned. Part of it comes from the fact that Java is easy to write ...

Part of it comes from the growing class libraries for graphic and multimedia interfaces ... for language translation ...

... and for systems and middleware services on servers.

But I think that the biggest advantage is just beginning to come ... as Java becomes the carrier for finally getting object-oriented programming off the ground.

For many years, we have known that the key to achieving higher productivity in software development ... is the use of predefined components or "objects."

Building complex structures by using predefined components is at the heart of any engineering discipline.

Can you imagine the days when houses were built from sticks, mud and rocks ... rather than pre-formed bricks, pre-framed doors and pre-built plumbing fixtures?

Yet the promise of assembling software applications from pre-built components ... has remained just that.

Because languages like C++ ... were so hard to use ... SmallTalk was narrow in scope and used a lot of resources ... and skilled programmers were scarce.

But now through Java Beans, and all the standards built around them ... we are finally on our way to making objects really happen.

And we're beginning to see companies roll out new generations of applications ... that would have been virtually impossible ... just a few years ago.

One of those companies is Caliber System ... a leading provider of value-added transportation, logistics and related information services.

John talks about his son being responsible for the Nagano Web-site ...

So ... we've talked a little about standards and connectivity ... and increased programmer productivity ...

The third benefit I'd like to mention ... is the ability to leverage your existing systems and applications.

Over the years ... I've talked to hundreds, probably thousands of customers .. and even though their businesses are different ... one issue keeps coming through.

They have a tremendous amount invested in systems and applications ... the number is about $5 trillion invested in software and data ... and they're looking for ways to build on what they have.

What they want is a way to preserve the integrity and investments of their core systems ... while at the same time becoming more flexible at the front end.

This is because what they really need is the ability to quickly change the way they go to market ... while leaving their back room systems intact.

One of the strengths of Java ... is the fact that you can write new application front ends to existing systems.

Almost all of this is being done today on a three-tier model.

A new application front-end is built quickly ... in a matter of weeks or months ... running on a second-tier Web server.

It looks after all the internet or intranet aspects of the network ... and connects to the first tier clients.

It also connects to the existing applications that run on third tier servers.

The third their is where 70% of the world's data and 80% of the worlds transaction processing currently resides.

The beauty of this approach is that the third-tier applications don't have to be modified ...

... Java function and Beans can present the Internet transactions to the back-end servers just as if they were coming from direct attached IMS, CICS or MQ terminals.

You saw it in KeyCorps' applications.

They didn't rewrite their existing banking transaction system ... they just wrappered their CICS backend systems ... and built a new set of Web-based applications in a couple of months.

So standards and connectivity ... increased programmer productivity ... the ability to extend existing investments ... Java plays a critical role ... in making the Networked World work.

And I believe Java going through all the growing stages that any normal product goes through ... only doing it at an accelerated rate.

Think about it ... there's an industry exploding around a platform that's only two years old ... a child ... even in Web years.

Yet there's no question ... Java is maturing faster than any platform in history ...

... and its value proposition is so compelling ... that competitors are partnering to strengthen Java ...
What are we working on?

Basically, four main areas:

Let's talk performance for just a minute. In June, Sun claimed the fastest Java VM on Solaris. In July, Microsoft said it was in front.

And then we saw a release to release improvements of 50% as we went to 1.1 -- all of this over a time frame of less than eight months.

What's important here is not that any one organization is the leap-frog leader of the day ... but that tremendous progress is being made on performance overall.

This is the real news ... and it's going to continue with more VMs enhancements in the fall ...

... new just-in-time compilers ... new high performance server interpreters and full optimizing compilers for fixed functions.

We will not do this, however, at the expense of any cross-platform compatibility.

Now to increase speed and continue to strengthen cross-platform compatibility ... IBM, Sun and Netscape ... are partnering aggressively.

And in fact, earlier today, announced that we're establishing a new Java Porting and Tuning Center. It will be managed by Sun ... and staffed by all three companies.

The purpose is to deliver timely, tuned and fully compatible releases of the Java platform ...

... across a wide range of operating systems, tools and applications.

This approach will allow us to leverage our individual strengths ... and knowledge of multiple environments ... while delivering the speed and operational efficiency of a single company.

We will invite Microsoft, Intel, Symantec, Borland, Oracle, Apple and others to join us in this effort.

The only price of admission is: "Public support of 100% pure Java ... the converged source code ... and commitment to a lot of hard work in the Porting Center."

In the area of functionality, we're focused on adding new class library capabilities and delivering new system services through Enterprise JavaBeans.

You'll hear a lot more about those areas during the rest of the week ... so I'll just touch on one other area we're focused on ... and that's security ...

Certainly, we have an excellent foundation to build on ... and part of this morning's announcement is that we will take another step this fall ... building on an already strong architectural foundation.

As a team, we're committed to not rest on our laurels ... even though we've been getting some pretty good press lately.

In fact, a recent story in Communications Week ... really drives that point home.

In a case study called "a textbook example for other nations and major businesses" Communications Week described the U.S. Department of Defense' rollout of the world's largest single community of Web users.

The community is expected to encompass 2 million users ... who will have access to a single, multimedia view of military command, control, and intelligence information ... regardless of where they are located.

Now, here's the important part. DoD has committed these two million seats to Java. In making this decision, Dr. Frank Perry, DoD's technical director for engineering and interoperability said ... and I quote ...

"Microsoft's ActiveX has not been an option because it allows executable content to move around distributed environments in a mobile mode ... and raises security questions. Java Virtual Machine and its sandbox construction offer better assurance."

So that's the security base we're building on as we go forward.

Well, those are some of the things that the members of the Java partnership are up to.

So, now let me wrap up by spending just a few minutes on IBM and Java.

Over the past year ... we've worked with more than 10,000 customers ... to help them get access to the Internet ... and have helped over a thousand of these move across the chasm to e-business.

What's e-business?

It's what happens when you combine Internet technology ... with traditional I/T to transform the way your business operates.

Our experience with these customers ... is the reason we're so committed to 100% pure Java.

In fact, earlier this year, we announced our Network Computing Framework for e-business.

The NCF is about taking our heritage ... all that we've learned about transaction intensive, high availability, secure, mission-critical enterprise computing ...

... and extending that business-class environment to the Internet.

The Framework isn't just an IBM thought ... it's totally based on open standards ... to give customers compatibility across all their heterogeneous platforms.

And Java's is a key part of what makes it work.

The framework starts with our Internet connection secure server ... which InfoWorld in its July 7 issues, rated as the "most complete," "best performing" and "well-designed" web server on the market.

We now call the server the Domino Go Web Server.

We then announced all of the system infrastructure functions in the form of JavaBeans.

These beans can be easily included into a Java application program to provide ...

Network functions ... like automatic access to Internet file transer, mail and new protocols ... or security and directory functions.

There are user interface functions and search engines ... and they're what we call connectors.

Connectors are beans that connect your new programs to existing data and transaction systems ...
2nd tier systems that have DB2, Oracle, CICS, IMS or MQ interfaces.

Then, on top of these infrastructure services ...

... We've added all of the middleware that supports the collaborative, customer service and business transaction applications that I talked about earlier.

The components are Domino Mail, Domino, DB2 Universal Database and the IBM transaction series ... all runing individually or together off of a common system base.

And the whole environment is supported by a set of visual construction application development tools.

The point is that you can start simply, with limited function on a small server ... and then grow quickly.

Through increasing sophistication and scalability ... right through to full blown, mission-critical transaction processing systems.

Finally, we've created a number of solution frameworks that run on top of the system for rapid implementation of common e-commerce applications.

- Net.Commerce, Net.Payment, Domino Merchant, Kona and San Francisco for instance.

For those of you not familiar with San Francisco ... it's an application framework being built by IBM and a large set of ISV partners.

Its purpose is to take the business applications that small and medium businesses depend on ...

... applications like accounts payable, accounts receivable, inventory management ...

... and extend them to the networked world.

Many of the common functions and data elements have been created in JavaBeans ... like components for general ledgers, sales orders, purchase orders or inventory movements.

Beans will make this new generation of applications easier to deploy and customize.

Well, IBM's commitment to make extend Java from a client notion ... all the way to the enterprise server ... has prompted a very positive response from the industry.

David Marshak of the Patricia Seybold Group wrote that "IBM's e-business strategy raises the bar from a focus on plumbing (intranets, extranets and the Internet) to a focus on doing real electronic business.

And Tim Sloane of Aberdeen Group tied it all together with this quote:

"IBM has leveraged its leadership role in Java to introduce a new enterprise-class development environment that is based on Internet standards and is totally open. It is no surprise that IBM intends this to be the preeminent environment that can connect the Web to mission-critical data safely and reliably."

So let me summarize what I've tried to cover this afternoon ...

The networked world is here ... it's maturing first in business ... and smart business people are developing networked applications very quickly ... to solve the problems that keep them awake at night.

Finding new customers and dealing with globalization

Becoming more competitive

Improving productivity

And, speeding up time to market and cycle times.

Growing their topline sales ... as well as bottomline profitability.

They're doing what we call ... e-business ...

That's transforming their businesses by using the technologies of the Internet and combining them with their existing I/T systems.

And the applications include new collaborative business processes, customer service applications and full transaction processing.

Having helped more than 10,000 customers make this transition ... we clearly understand the requirements in the enterprise for reliability, high availability, scalability and security ...

and that's what has made us so committed to 100% pure Java.

100% pure Java is key to solving many of the problems that we've all wrestled with for years ...

... a universal standard for connectivity that delivers a write once, run everywhere environment ...

... vastly improved programmer productivity ...

... and the ability to leverage existing systems in the development of new applications

The Industry's hard at work on improvements to Java ... and IBM has based much of it's approach to e-business on Java.

Now, here's my challenge to you ...

Understand the impact of the Web and how to use it for competitive advantage ...

Train your people on Java and JavaBeans... the reality of object-oriented programming has finally caught up with the promise ... and it can dramatically improve your application development time.

And finally ... demand 100% pure Java solutions from your vendors and partners.

I'm convinced nothing else will do in the multi-platform world of the enterprise ...

... clearly, there's tremendous momentum behind Java ...
... but we need you ... the business customer ... to insist ... that the time has come for this industry to adopt real open standards.

Thank you.

Copyright 1997