Back in early 2006, I published a piece
on the impact of delivering SOA-ready services via online, on-demand
venues such as online marketplaces. Here is an update on the piece,
revised to meet today’s cloud computing realities. Since I wrote the
first piece, we have seen many of the principles coming to fruition.
So here is an updated version of why SOA means a lot more than integration or IT efficiencies:
SOA and cloud computing will help bring service consumers and
publishers together; this could have enormous ramifications for the way
we build systems and manage our organizations.
I am a passionate believer in the power of technology, as an enabler
of entrepreneurship and organizational transformation. I have long
advocated flattening the organizational hierarchy, and pushing
decision-making down to the managers and employees who deal with
customers and production on a day-to-day basis.
That’s why I am a big supporter of Web services and SOA, because
these approaches open up new possibilities and opportunities for
developing an entrepreneurial culture within organizations, as well as
spurring new ideas for start-ups. More than anything, Web services and
SOA are paving the way for the composite or loosely coupled company -
which may be an entity that exists purely as an aggregation of
third-party services, provided on an on-demand basis to meet customer
demands. Most of these services will be passed through as Software as a
Service, both from within the enterprise and from outside.
Is this entrepreneurial spirit something that larger enterprises,
particularly the Global 1000, would be capable or willing to digest?
After all, larger enterprises usually have their own humongous internal
IT development shops. But, some observers point out that some of the
largest and most progressive companies may, in fact, be the most
enthusiastic embracers of the virtual, componentized way of doing
business.
Mohan Sawhney,
professor at Northwestern’s Kellogg School of Management, for one,
believes that the best-run companies are becoming “orchestrators” of
networks of services, rather than actual producers. Sawhney quipped at
a conference that some mobile phone companies provide a good example of
this orchestrator role, in that “they don’t do anything themselves,
they just collect the money.” Even Cisco comes close to this
orchestrator model, he pointed out: “85 percent of Cisco’s products are
never touched by a Cisco employee.”
To achieve the orchestration Sawhney talks about, especially in
terms of software-based services, companies may find their best option
is to turn to third-party marketplaces that can provide the necessary
software on demand. Cloud vendors offer online marketplaces in which
enterprises can tap into services that they may or may not have the
time or inclination to build. Why reinvent the wheel by having your
staff spend time building service components, when you can quickly
subscribe to a component, that’s been tested and uptime certified, and
pay for it on as-used basis?
So, I, as the software entrepreneur, could write my service, which
could be a system that tracks the number and costs of Styrofoam cups
used within corporate cafeterias. I would submit Joe’s Styrofoam Cup
Accounting Service to a marketplace, which would validate the quality
and uptime of my service, and make it accessible to enterprises and
ISVs across the globe. An ISV such as SAP may pick up on it, and add it
to their next enterprise release as an additional management feature.
The corporate accounting department that installs the next SAP release,
then, may see the value in keeping track of cup expenses (especially if
it’s a real caffeine-driven work culture). They then turn on the
feature that accesses the marketplace, and Joe’s Styrofoam Cup
Accounting Service. Do I make my millions this way? No, more likely, I
will make a few pennies per transaction. Still, these things can add up
quickly.
Cloud computing is pushing some software vendors to change their
models to component delivery, perhaps based on a micropayment business
model as I alluded to above. This makes plenty of room not only for
small start-ups, but also for development shops within traditional
enterprises that have great ideas. We’ll see the emergence of the
corporation-as-service-orchestrator phenomena.
Bob Walsh, author of a book entitled MicroISV: From Vision to Reality,
validates this thinking. In his book, he discusses how entrepreneurs
and technologists can ride the new wave can the rise of smaller
application providers that can put the components in place for a
complete solution. He recently told me that “while most MicroISVs are
focused on either the desktop or providing a stand-alone service, I
think you will see more and more MicroISVs as ‘parts.’ You are already
seeing micro-ISV’s providing add-on services in shipping,
transportation and logistics; more will follow.”
Just as businesses are evolving into orchestrator roles, so are the
systems that support them. As Sawhney so aptly put it, “five years from
now, the concept of an application will be obsolete. They will all be
services, combined, mixed, matched and reused as needed.”
