(Business 2.0) – Behind every pitch for business software lies a kind of quiet extortion. If you don't buy this product, maybe your competitors will. Maybe they will then go on a sustained surge in productivity and leave you in the dust. You don't want to end up like Kmart, do you, behind in technology, all too often in the dark as to what your partners and customers and other divisions are up to, and eventually--gulp--filing for bankruptcy?

Maybe the hard sell doesn't go exactly like that, but it might as well. The dotcom sideshow is long over, but the trends rumbling beneath the surface during the boom remain. Information technology does indeed have the power to transform the way you do business, and you really can't afford to be left behind. True, not every technology of the '90s delivered on its promise, but businesses are groping toward an understanding of what does work. And as measurable returns on investment start to come in, buyers are regaining their confidence. Market research firm Gartner Inc. projects that after two years of falling, spending on business software will grow roughly 2 percent this year to $11.2 billion.

That's why this year's Business 2.0 Tool Kit is more vital than ever. For the third year in a row, we collaborated with Meta Group, an information technology research and consulting firm based in Stamford, Conn., to identify the most powerful new technologies.

Meta's analysts say you'll be hearing a lot this year about "sense and respond." Simply put, new software is opening up once-closed computer systems and allowing them to respond to the needs of suppliers, vendors, employees, and customers. Data is being liberated from the software systems that generate it, so it can be shared more easily. Information is increasingly becoming a utility that can be tapped--via any Web browser installed on a laptop, PDA, or smart phone--by anyone from the CEO on down to the newest hire in the call center. A CFO with business-performance management software can check on financial data in real time. The human resources manager can screen candidates with human-capital management software. Meanwhile, identity management software controls who gets access to what information.

Moreover, critical systems once kept under lock and key can now be run by outsiders or shared among business partners--a trend IBM has dubbed "on-demand" computing. And down the road, technologies like Microsoft's .Net will be a tool for what Meta calls "composite applications," which will let companies cherry-pick the software that makes their systems the most responsive. Companies that aren't in the "sense and respond" loop will seem to run in slow motion.

Jim Hourigan, vice president for IT and logistics at SSL International, a latex products company based in the United Kingdom, has already seen how well open systems work. Mass-market retailers and medical supplies distributors alike now demand that SSL use the Internet to respond to their needs. Electronic links gave SSL an early warning when demand for one of its products spiked, allowing the company to crank up its Thailand factory in time. A big medical supplier's systems fed Hourigan enough real-time information to keep a supply chain moving all the way back to Malaysian rubber plantations. "It's the Holy Grail," Hourigan gushes. "It's also a barrier to entry, because our customers will have to work hard to duplicate this with one of our competitors."

Seamless awareness of your customers' and vendors' needs? Competitive advantage? Is this for real? Believe it. And if you want to know more, simply turn the page and open the gatefold.

THE ESSENTIAL BUSINESS SOFTWARE TOOL KIT WITH META GROUP PICKS These hot new technologies will make your business faster, smarter, more transparent, and way more productive.

Open up! That's the most powerful effect of the business software systems you'll find below. These technologies pry open once-closed information loops and allow executives to see through layers of management to real-time data. They let customers, suppliers, and manufacturing partners grab information anytime during the production process. They let employees and customers get routine data for themselves, leaving your people free to concentrate on what matters. The guide below--compiled with the help of analysts at the infotech research firm Meta Group--walks you through the most important of these liberating technologies, deciphering the buzzwords and TLAs (three-letter acronyms) and grouping them together by broad function. But remember: This isn't a "best of" list or a ranking of industry leaders. It's a collection of new products that have Meta's clients buzzing with excitement. So you won't find some of the staples of previous years' lists--Web server software and basic gear like routers and switches--because that technology is now a no-brainer. This year we're sticking with the coolest stuff.

Business Applications Sales, manufacturing, and logistics crave order. These programs' analytical capabilities help your customers and vendors extract data about how things are moving, usually via an "executive dashboard."

Supply-Chain Management

Forget about merely tracking widgets. This is really about speeding information up and down the supply chain and making sure it reaches the people who need it when they need it. Specialized programs handle separate aspects of that complicated challenge. Procurement software helps you buy supplies. Strategic sourcing software selects vendors and tracks their performance. Product life-cycle management software helps businesses conceptualize, design, and build products with their partners.

Pricing $100,000 and up

Support and Service

Help free your customers from "voice-mail hell." This software is supposed to make life easier for customers--really--by helping them help themselves on the Web or letting call center employees interact with them in smarter ways.

Vendors Banter Systems · Banter Server · www.banter.com · San Francisco, CA DataLode · RealConnect Support · www.datalode.com · San Rafael, CA ePeople · ePeople Teamwork · www.epeople.com · Mountain View, CA

Pricing $50,000 and up

Business Performance Management

OK, you got sold a few ERP (enterprise resource planning) systems. Want to see what's going on in all of them in one place? This software sucks down data from all over your business--letting you track KPIs, or key performance indicators, such as the profitability of sales to your biggest customer. We're told the Sarbanes-Oxley Act, which makes top executives personally responsible for financial oversight, has been the vendors' best sales tool this year.

Vendors Cartesis · Cartesis Magnitude · www.cartesis.com · Paris, France (U.S. headquarters: Stamford, CT)

Comshare · Comshare MPC · www.comshare.com · Ann Arbor, MI

Hyperion Solutions · Hyperion Financial Management · www.hyperion. com · Sunnyvale, CA

Pricing $50,000 and up

Portfolio Management

It may sound like something designed for a mutual fund manager, but this software actually helps technology managers allocate resources more intelligently among projects by assessing their level of risk and the potential for payoff. It'll help your technologists keep in check the dumber ideas--like that plan to Webify the executive bathrooms.

Vendors Niku · Niku 6 · www.niku.com · Redwood City, CA

PlanView · PlanView · www.planview.com · Austin, TX

Primavera Systems · TeamPlay · www.primavera.com · Bala Cynwyd, PA

Pricing $80,000 and up[2]

Human Capital Management

Automated HR? Does this mean they can lay themselves off? Perhaps. This new category of software helps HR folks with recruitment by actually generating interview questions and then rating the responses. Spooky. Other software lets employees manage their own benefits, giving them more control and reducing the workload of your HR staff.

Vendors Ceridian · eSource HR/Payroll · www.ceridian.com · Minneapolis, MN

PeopleSoft · PeopleSoft Human Capital Management · www. peoplesoft.com · Pleasanton, CA

Workscape · Workscape Enterprise · www.workscape.com · Framingham, MA

Pricing $150,000 and up[1]

Demand Chain

Using baseball bats to scare up revenues only works on The Sopranos. In real life, this stuff is a lot more effective. It can manage your sales force or automate the sales process by allowing customers to order through multiple channels, tracking what they've bought, and making sure everyone is up to date on what wares you have to sell. It can also help you run a mean e-mail marketing campaign.

Vendors Comergent Technologies · Comergent E-Business System · www.comergent.com · Redwood City, CA

E.piphany · E.piphany E.6 · www.epiphany.com · San Mateo, CA

HAHT Commerce · HAHT Commerce Suite · www.haht.com · Raleigh, NC

Pricing $75,000 and up

Integration and Development Platforms

These are the tools with which a nimble business is forged--tools for writing applications and for collaborating on manufacturing and marketing. You need them to bridge information gaps between your business and your partners, as well as to link business and Web applications within your company.

Application Infrastructure Platforms

At the heart of these broad platforms are servers linking computing systems for communications and transactions. These are the foundation on which engineers will build the next-generation decentralized computer network, the so-called distributed system, which will be able to mix and match information from different systems and serve it to the most far-flung users. Look for Microsoft's .Net-based Jupiter, parts of which are slated to ship around the end of 2003.

Vendors BEA Systems · WebLogic Server · www.bea.com · San Jose, CA

IBM · WebSphere Application Server · www.ibm.com · Armonk, NY

Oracle · Oracle9i Application Server · www.oracle.com · Redwood City, CA

Pricing $8,000 per processor and up

Integrated Development Environment

Here are power tools for your company's geeks. A techie's dream workbench contains a set of programming tools--including a text editor, compiler, and debugger--all accessible from a single interface. They allow your IT staff to customize existing programs and quickly build new ones by dropping in prefabricated chunks of programming code, rather than having to build applications entirely from scratch.

Vendors Borland Software · JBuilder · www.borland.com · Scotts Valley, CA

IBM · WebSphere Studio Application Developer · www.ibm.com · Armonk, NY

Microsoft · Visual Studio .Net · www.microsoft.com · Redmond, WA

Pricing $1,000 per user and up

Enterprise Application Integration Suites

These programs build connections between business applications. They may offer prefabricated connections, known as APIs (application program interfaces), that link to the often quirky interfaces of a vast array of older business systems, so you can move information between an old system and a new one. Their ability to translate information from your business systems into standard formats, such as XML, lets you exchange data with a large number of partners.

Vendors IBM · WebSphere Business Integration · www.ibm.com · Armonk, NY

Tibco Software · Tibco ActiveEnterprise · www.tibco.com · Palo Alto, CA

WebMethods · WebMethods 6 · www.webmethods.com · Fairfax, VA

Pricing $150,000 and up

Business Process Management

Automating business transactions that involve multiple partners--a home loan application, for example, or a multimillion-dollar semiconductor order--is a tricky proposition. These packages make sure that everyone knows when to act and what to do as the transaction bounces from one system to another.

Business Process Modeling

This is the blackboard on which you diagram how transactions will move through your systems and those of your partners. What will you do if a customer reports that an order drop-shipped by a supplier has gone to Paris, Texas, instead of Paris, France? Can customer service representatives initiate refunds, or do they have to get approval from a manager? This software helps you simulate such scenarios before handing things off to business-process automation software for execution.

Vendors IBM · Holosofx Workbench · www.ibm.com · Armonk, NY

IDS Scheer · Aris Collaborative Suite · www.ids-scheer.com · Saarbrucken, Germany (North American headquarters: Berwyn, PA)

Pricing $2,500 per user and up

Business Process Automation

The chief job of this software is to route tasks, documents, and information between people and systems. It makes sure the right people see the right documents at the right time to do their jobs. In the mortgage business, for instance, an application from a customer would move in order through the various employees in the chain who need to verify the loan, register it, and so on. If, say, some data is missing, the software would know to route the application to the mortgage broker for follow-up with the customer.

Vendors FileNet · Panagon eProcess Services · www.filenet.com · Costa Mesa, CA

Savvion · Savvion BusinessManager · www.savvion.com · Santa Clara, CA

Versata · Versata Logic Suite · www.versata.com · Oakland, CA

Pricing $30,000 and up

Operations and Security

Opening up your business to employees and customers exposes your company to big risks. This software tracks information about who has access to which systems or documents in a database and uses that data to flag intruders. And if the worst should happen, the software can help you rebuild.

Identity Management

Who goes there? Identifying users and giving them appropriate access (but no more) is critical as businesses unleash once-proprietary data to a broad audience. This software tracks users and their ever-changing passwords--you do change the passwords regularly, don't you?--across more than one system. You want simple and reliable software because you can't risk alienating customers.

Vendors BMC Software · Control-SA · www.bmc. com · Houston, TX

IBM · Tivoli Identity Manager · www.ibm. com · Armonk, NY

Waveset Technologies · Lighthouse · www.waveset.com · Austin, TX

Pricing $100,000 and up

Firewall

The result of an open system is more visitors, wanted and unwanted. Firewalls serve as the sentries for your electronic business, inspecting incoming traffic for intruders and blocking access to servers the company deems off-limits. These days, firewalls must work hand-in-hand with other security systems to protect your network while opening it to partners and customers.

Vendors Check Point Software Technologies · FireWall-1 · www.checkpoint.com · Ramat Gan, Israel (U.S. headquarters: Redwood City, CA)

Cisco Systems · PIX Firewall Software · www.cisco.com · San Jose, CA

NetScreen Technologies · NetScreen Systems (NetScreen-500 and NetScreen-5000) · www.netscreen.com · Sunnyvale, CA

Pricing $7,000 and up[3]

Encryption

This software provides the electronic locks and keys you need to keep your information private. Such protection is critical because employees, vendors, and customers are now using a wide variety of devices, from handhelds to PCs, to grab data from your system. Encryption algorithms secure the data while it is being accessed and protect it on vulnerable devices.

Vendors Aventail · SA-9000 Managed System · www.aventail.com · Seattle, WA

Certicom · MovianVPN and MovianCrypt · www.certicom.com · Mississauga, Ontario

Protegrity · Secure.Data · www.protegrity. com · Stamford, CT

Pricing $5 to $50 per user[4]

Intrusion Detection

Your IT system's burglar alarm, this software alerts administrators if intruders break into your servers. The newest versions also monitor what's going out as well as what's coming in. That's important because you'll want to detect immediately such horrors as all your customers' credit card numbers starting to leak out onto the Web--and you'll want to know who is doing the leaking.

Vendors Cisco Systems · Cisco IDS 4250 · www. cisco.com · San Jose, CA

Internet Security Systems · RealSecure Network Sensor · www.iss.net · Atlanta, GA

Tripwire · Tripwire for Servers · www. tripwire.com · Portland, OR

Pricing $600 to $27,000

Disaster Recovery Services

If a tornado were to carry your Kansas office over the rainbow, would your business survive? Disaster recovery services regularly and automatically back up all your data on a server in a remote location so you can reassemble your business if necessary. Some vendors promise to send a trailer packed with PCs to get your office going right away.

Vendors EMC · EMC Enterprise Business Continuity Services · www.emc.com · Hopkinton, MA

IBM · Business Continuity and Recovery Services · www.ibm.com · Armonk, NY

SunGard Data Systems · Availability Services · www.sungard.com · Wayne, PA

Veritas Software · Veritas Consulting--Disaster Recovery Services · www. veritas.com · Mountain View, CA

Pricing $5,000 and up

Web Applications

This software manages the public face of your online business. Your customers and vendors will use it to gather information from other systems and then view it on the Web.

Portal Framework

This application scrapes the data you already have out of your systems and puts it on the Web so customers, employees, and business partners can grab information from databases, e-mail, or document management systems. The portals can be integrated with all your systems and your business partners' systems on a single Web-based interface as user-friendly as My Yahoo. With no dial-up, the Web access drops your telecom costs.

Vendors IBM · WebSphere Portal · www.ibm.com · Armonk, NY

Plumtree Software · Plumtree Corporate Portal · www.plumtree.com · San Francisco, CA

SAP · MySAP Enterprise Portal · www.sap.com · Walldorf, Germany (U.S. headquarters: Newtown Square, PA)

Pricing $75 to $400 per user

Search Tools

Whether it's helping customers find your products online or helping your employees find key company resources, a good search product is about a lot more than just providing a field within which your users can tap in a keyword. Among other duties, it should categorize information for easy access and also present related information that users never knew they needed. Shop carefully, because a good search is hard to find.

Vendors Autonomy · Autonomy Classification Server · www.autonomy.com · San Francisco, CA, and Cambridge, United Kingdom

InQuira · InQuira 5 for Search · www.inquira.com · San Bruno, CA

Verity · Verity K2 Enterprise · www.verity.com · Sunnyvale, CA

Pricing $100,000 and up

Web Content Management

Is the content on your website, from the ever-changing product specifications to this season's catalogs, becoming an unmanageable sprawl? Can you configure that content for the proliferation of devices that will be used to access it--PDAs, tablet PCs, smart phones, and interactive televisions--and publish it to partners' sites? Can you edit it easily, store it reliably, and retrieve it quickly? Here's help.

Vendors Documentum · Documentum 5 · www. documentum. com · Pleasanton, CA

Stellent · Stellent Content Management System · www.stellent.com · Eden Prairie, MN

Vignette · Vignette V7 · www.vignette.com · Austin, TX

Pricing $100,000 and up

Collaboration

Are those aggressive marketing people hogging the conference room again? No worries. This software can help all your employees work in concert online, whether they're whiteboarding ideas with colleagues in Kuala Lumpur and Dusseldorf or brainstorming with the logistics guys down the hall. The technology works well enough that it's become a great solution if you need to slash your company's travel budget.

Vendors Intraspect Software · Intraspect 5.5 · www. intraspect.com · Brisbane, CA

Kamoon · Connect Enterprise · www.kamoon.com · Fort Lee, NJ

Open Text · Livelink · www.opentext.com · Waterloo, Ontario, (U.S. headquarters: Bannockburn, IL)

Pricing $75 to $500 per user

For more information about the products and their vendors, go to our website at www.business2.com.

1) Up to $8 per user per month for hosted versions. 2) Primavera Systems charges per user. 3) For unlimited users. 4) Protegrity charges on a per-processor basis.