2008 will be the iYear, and no that doesn’t mean Steve Jobs gets another gazillion dollars for inventing a new gizmo with more cool than function.

The ‘i’ in iYear stands for “integration.” I see on the horizon signs showing that IT is shifting priorities and now faces an exaggerated form of post-consumption integration indigestion.

First, let’s be honest — the IT market goes through some predictable cycles. When the economy is good and customers have larger budgets, they buy technology that offers to give them competitive advantages. Sometimes this advantage is immediate, and sometimes it is long-term, and sometimes it is just hype. Regardless of the time frame in which the alleged benefits of the stand-alone technology should arrive, real business efficiencies come when that point technology is integrated with other technology , via integration , streamlines business operations.

I have already noted that there is a tech industry downturn coming. IT has been consuming packaged aps, infrastructure, BPI suites … and not integrating much of it. Now with economic uncertainty, credit tightening, oil-price inflation pressure, and more, IT is falling back. When IT doesn’t buy, they turn to the work they have been putting off which is typically integrating what they have already bought,  deployed, and now need to see ROI from in order to survive revenue slumps.

Oracle, as usual, is a little ahead of the game. Though they articulate their integration solution as clearly as a toothless imbecile with a mouth full of marbles, Oracle is pitching an ammo belt full of silver bullets with the end product being a n-scalable enterprise cloud with Java as the programming linga franca. Clustered DBMS, Coherence (which is basically a multi-node data cache with transaction management), Java application servers, SOA integration tools, and more creates a middle-ware monster, but one with a purpose – a system for gluing together applications with a single vendor throat to choke.

Oracle and other companies will find resistance on several fronts. First, IT has always been loath to become too dependant on any one vendor (let’s call the the Microsoft Neurosis). The larger the sale, the more pressure IT is to get tangible results from the investment. Thus when salesdrones from Oracle, IBM, or anyone else comes calling, and try to sell a large, expensive, complex master solutions, CIOs will be unimpressed. CTOs are a different matter — they like being courted by the big vendors, and truly appreciate large, complex, expensive solutions — it fits their techie origins.

Matters are complicated by IT’s need to make small, strategic integrations happen quickly. After all, if you can invest one man year and $1,000 to get 50% of all new application integration value from it, why spend a dozen man years $100,000 to get 70%. Somewhere the cost of cash and time overrule all other motivations, and CIOs will push for a small number of highly valuable integration projects over some elegant master plan.

This is where Open Source scouts like SpikeSource and MuleSource come into the picture. They are the anti-Oracles. First, their products derive from Open Source, leaving CIOs feeling freed from vendor lock-in and extortion-level pricing. They also eshew “grand scheme” mentalities, and sell instead baseline functionality. So at a time when IT budgets are low, and the need to maximize sunk investments is high, the Open Source kids are selling simpler and more focused integration concepts.

Regardless, everyone selling integration this coming year will make a buck. Now if Steve Jobs could just integrate my iPod with my dashboard stereo ….