Analysts Warn Techies To Prepare For SOA Shift - InformationWeek
06:50 PM

Analysts Warn Techies To Prepare For SOA Shift

The inevitable move to a service-oriented architecture will change how software is developed, how third-party applications interact, and how customers make purchasing decisions.

Service oriented architecture could significantly change the software industry similar to the way client/server technology did in the early 1990s, and analysts want companies to brace for change.

Analysts call SOA the next software architecture shift in a long-term major trend that technology goes through about every seven years. SOA allows companies to break code into small pieces to use and reuse the process throughout their IT platform.

Merrill Lynch & Co. analyst Raimo Lenschow believes the SOA cycle will require significant investments in research and development and trigger consolidation as a significant number of software vendors fail to keep up change. Lenschow, in the research note published Thursday, wrote that SAP AG leads in the investments, and only companies like Oracle Corp. and Microsoft Corp will have the large R&D budgets and resources to adapt.

Lenschow pegs SAP AG's investment at about $2.5 billion. Most of the funds have gone into in its SOA-based Business Process Platform (BPP), expected to launch in 2007. "We see significant accelerated consolidation in the application software space, where 60 percent of the market is still commanded by other smaller software players," SAP at 21 percent and Oracle at 9 percent, he said.

Forrester Research Inc. Senior Analyst Ray Wang says research investments are required because SOA changes the way software applications are built. The method also changes how integrators build extension apps that connect with enterprise resource planning (ERP) platforms. SOA will change purchasing decisions, too.

"We are at beginning of the shift," Wang said. "It's like being in 1996 all over again, when people were saying the Web is everywhere. We're going to have Web-based this and Web-based that, but we really didn't know what that meant."

Wang says the SOA cycle will take another six years to mature because missing from the equation as companies consolidate are standards and processes for building and deploying SOA platforms.

SOA is changing the software landscape with SAP will play a significant role, agrees AMR Research Inc.'s Dennis Gaughan. But the research director says the more mature SOA deployments are occurring in financial services, banking, insurance, and telecommunications industries.

Companies in these markets where Oracle and SAP have yet to successfully play, have built SOA applications with infrastructure tools from brands, such as IBM, Tibco Software, BEA Systems and WebMethods. "It's the application infrastructure and integration vendors that are having success in industries where Oracle and SAP have not had success," Gaughan said. "IBM is probably spending more money pushing SOA than Oracle and SAP combined."

Large and medium-size enterprises lead SOA adoption with 62 percent and 61 percent, respectively, deploying SOA by the end of 2006, versus 44 percent for small enterprises, according to a Forrester study. The research firm found adoption is strongest, 67 percent, among enterprises with 40,000 or more employees.

Comment  | 
Print  | 
More Insights
Newest First  |  Oldest First  |  Threaded View
How Enterprises Are Attacking the IT Security Enterprise
How Enterprises Are Attacking the IT Security Enterprise
To learn more about what organizations are doing to tackle attacks and threats we surveyed a group of 300 IT and infosec professionals to find out what their biggest IT security challenges are and what they're doing to defend against today's threats. Download the report to see what they're saying.
Register for InformationWeek Newsletters
White Papers
Current Issue
2017 State of the Cloud Report
As the use of public cloud becomes a given, IT leaders must navigate the transition and advocate for management tools or architectures that allow them to realize the benefits they seek. Download this report to explore the issues and how to best leverage the cloud moving forward.
Twitter Feed
InformationWeek Radio
Archived InformationWeek Radio
Join us for a roundup of the top stories on for the week of November 6, 2016. We'll be talking with the editors and correspondents who brought you the top stories of the week to get the "story behind the story."
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.
Flash Poll