News
News
7/6/2006
06:50 PM
Connect Directly
RSS
E-Mail
50%
50%

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
The Business of Going Digital
The Business of Going Digital
Digital business isn't about changing code; it's about changing what legacy sales, distribution, customer service, and product groups do in the new digital age. It's about bringing big data analytics, mobile, social, marketing automation, cloud computing, and the app economy together to launch new products and services. We're seeing new titles in this digital revolution, new responsibilities, new business models, and major shifts in technology spending.
Register for InformationWeek Newsletters
White Papers
Current Issue
InformationWeek Tech Digest - July 22, 2014
Sophisticated attacks demand real-time risk management and continuous monitoring. Here's how federal agencies are meeting that challenge.
Flash Poll
Video
Slideshows
Twitter Feed
InformationWeek Radio
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.