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SOA as a Foundation for Applications and Infrastructure

Written By: Predrag Jakovljevic
Published On: May 6 2005

SOA as a Foundation

While both service oriented architecture (SOA) and traditional enterprise application integration (EAI) cover integration and horizontal application services, SOA goes much further by catering to vertical (business specific) services and presentation services. The latter would become the foundation for a universal desktop for all the Web-based applications of an enterprise, thereby providing a common "look-and-feel" and language transparency across multiple applications. For a detailed discussion of the relationship between SOA, Web services, business process management (BPM), and business process execution language (BPEL), particularly in terms of the complementary nature of Web services and BPM, see Understanding SOA, Web Services, BPM, BPEL, and More.

Part Two of the SOA-Based Applications and Infrastructure The Next Frontier? series.

Fast forward to 2004, and emerging, SOA-based SAP or Oracle applications still consists of a complex mass of intertwined connections, but now, the major difference is these interconnections are more finely grained, and easier to connect or remove. They are less of a Gordian knot of hard-coded proprietary APIs and more like an electronic patch-board or hub, with each virtual plug identically shaped into a message-based, Web service. For example, many SAP application features can now be presented via Web services interfaces because the vendor has catalogued over 1,000 services that will be accessed and combined with others. The first services that will soon be published soon are commonly used tasks already in the SAP system, such as a financial program for tracking the time between a purchase order receipt and actual payment.

Over time, SAP intends to publish more of these services. It is also building an enterprise services repository (ESR) to serve as the central repository (equivalent to a data dictionary for traditional applications) and used by third parties. There are several dozens message-based services available now, including purchase order requisition, purchase order confirmation, purchase order change request, and so on. Depending on the level of granularity required, there could, in the long run, be more than 10,000 services in the repository.

For most SAP and Oracle customers, this hub will be SAP NetWeaver and Oracle Application Server 10g with a few upcoming data integration hubs respectively, while others might use counterpart third-party products, such as IBM WebSphere, BEA Systems' WebLogic or IONA Artix, or on open-source platform, such as JBoss. (For more information, on SAP and Oracle, see SAP Bolsters NetWeaver's MDM Capabilities and Oracle Further Orchestrates Its SOA Forays)

SOA has the promise of interoperability in an increasingly global and heterogeneous business world by promoting loosely-coupled architecture and the non-intrusive reuse of software components. Such a move should do away with user dependency on vendors for enterprise applications and also allow these applications to communicate in near real-time. Nevertheless, before it can all work, the likes of SAP and Oracle, for instance, must first open up, redesign, and expose the hundreds of application functions as services. This will be a multi-year project that it is, at best, only halfway completed. Also, for customers, who have customized these product instances, and added additional custom functions and third-party programs, it will also be difficult.

Additionally, the ability to generate-to-order the exact composite solution required for a particular market, industry, or customer environment will become the "motherhood and apple pie" for the Big Few packaged software vendor. In other words, the largest vendors, ones with over 20,000 customers and at least $1 billion (USD) in revenue, will need to make sure their composite solution meets the generic requirements for a particular market (even if the foundation of the solution is in their respective stacks). They really need to build out an ecosystem of software applications, components, and services based on their platform or appli-structure. Nothing less than the future of a company will depend on the likes of SAP NetWeaver or Oracle Application Server pervading the world of software the way Wintel has permeated the desktop computers. For end users, application servers will provide a common platform for running various applications. Independent software vendors (ISV) will be attracted to writing and running their add-on solutions for the platform because they will have access to the markets created by the pulling power of these larger providers.

This is Part Two of a three-part note.

Part One discussed SOA and its impact on business.

Part Three will look at the future.

Challenges for the Big Few

Big Few vendors will also serve an extremely varied set of customers in dozens of industries in hundreds of countries, in companies ranging from a dozen employees to dozens or thousands. Therefore, some of these customers will want entire, integrated enterprise systems, while others might only be looking to tackle one burning business issue right now. Nowadays, vendors struggle to make their flagship product lines fit every need in a one-size-fits-all fashion. For example, an early step for SAP will be to define how it will publish services, and the specific service interfaces to cultivate its ecosystem. This is a task that runs concurrently with SAP's internal effort to componentize applications. Initially, the assigned development group will work to define three to five very generalized, horizontal services and then add more specific industry-based services later.

Fully aware that only widespread adoption by the ISV and systems integration (SI) community will make SAP NetWeaver become a development environment of choice, SAP recently announced the hiring of George Paolini, a former Borland Software and Sun Microsystems executive. As the senior vice president (SVP) for Platform Ecosystem Development, Paolini will report to Shai Agassi, SAP executive board member who is currently in charge of product development and marketing for all of SAP's business applications. Paolini's charter will be to take SAP's ISV partner program to the next level. Way back when Java was an emerging technology, Paolini was in charge of building its ISV community. Nowadays he is credited with turning Java into the world's largest third-party developer. SAP is logically hoping that Paolini can repeat this notable feat with SAP NetWeaver too. His task is to establish a forum where ISV's and customers from different industries will improve on the current SAP NetWeaver lineup, using procedures similar to those used by the Java Community Process (JCP) or the Eclipse open-source Java development tools foundation, which took JCP and modified it by adding a consumer group that lets companies provide feedback on how the technology should evolve. In this vision, software vendors will base their products on SAP NetWeaver and customers could lobby for new features, and participate in developing a services framework, which SAP expects to roll out in early 2006.

The ERP giant intends to publish a Java-based software development kit (SDK) to help outside application providers tap into its products. This strategy represents quite a shift for the SAP's long, drawn-out conventional mindset and culture, which has for over three decades had a "not invented here" attitude shunning outside influence. It will now provide a development platform and rely on other software vendors and its corporate customers to influence the direction of its products.

Paolini will also build on top of two fairly new programs started by SAP: 1) the SAP Developer Network, which has over 110,000 participants (the company has reportedly been adding about 10,000 new members each month, with many coming from India and China), and 2) the Powered by SAP NetWeaver and Certified by SAP NetWeaver programs, designed for ISVs that want to build and certify applications on SAP NetWeaver. That initiative started in 2004 and has scaled to about 1,500 members. The attraction may stem from the SAP's vast customer base, which now comprises of nearly 26,000 corporate customers, with 12 million users across nearly 90,000 installations. SAP has set a lofty goal of one million brand new SAP NetWeaver users for 2005, which will also drive service revenue. SAP expects that the SAP NetWeaver related services market could reach $1 billion (USD) in 2005, which would be a tenfold or so increase from 2004.

Hope for Smaller Vendors

With their respective platform initiatives, SAP and Oracle should stimulate their revenues by getting third parties to add to the catalog of products tied to their suites of packaged applications, which are already widely installed among large and midsize corporations. More add-ons, and the simpler upgrade process promised by SAP NetWeaver or Oracle Application Server, will be vital to driving futures sales. Thus, there seems to be hope for the smaller vendors' business model, which, although dependent on the others' technology infrastructure, will be focusing on a relatively small, tightly defined market with specific requirements that cannot be met with more generic products (see Smaller Vendors Can Still Provide Relevant Business Systems).

Usually, these markets will be too small for the Big Few to want to compete in and will also have unique requirements that cannot easily be built into the more generic monolithic products offered by the Big Few. These boutique vendors will compete by having in-depth product functions and intimate knowledge of their market place or by offering services (content or location) not available from the Big Few or independent service providers. Examples of these markets are industrial, such as fresh meats, jewelry retailers, dentist offices, law offices, etc., or regional, focusing on Albuquerque, Boise, New Orleans, etc.

To cater to these ISVs, Microsoft is striving to make a huge contribution on the infrastructure level around Web services. Current platforms like SAP NetWeaver and IBM WebSphere remain big and can only be designed and deployed in the largest IT shops, and even then often with difficulties. In order to achieve the real goal of connecting processes across the supply chain down to players lacking infrastructure, something needs to be done to bring the technology within everyone's reach. To that end, Microsoft's Web services layer, Indigo, aims at providing just that. It will be a standard programming model, native to Microsoft Windows and .NET, which lets developers leverage Web services. The software giant is bringing this technology to the broad population of developers and businesses, which may enable the wide growth of Web services. This model of bringing technologies, once reserved for the largest IT shops, to large, medium, and small businesses is the next step in a strategy that has been consistent for Microsoft.

For a more detailed discussion of smaller vendors' outlook see Customer Choices for Achieving Growth.

Focus on Business Solutions

Therefore, focusing on the technology lock-in of users will inevitably have to be replaced by focusing on delivering the best solution for the customer, even if it has some components from competitors. What might be compelling about developing on a platform like SAP NetWeaver is the ability to work better with partners. Namely, many proprietary SAP applications based on business application programming interface (BAPI) are still working very well, and an ISV needs to have a much better and more compelling reason than just harnessing new technology to rewrite applications. NetWeaver be might exactly what is needed to create increased interoperability and may be a way to find new strength in the partner ecosystem.

Moreover, applications and platforms combinations are comparable when it comes to providing business process-oriented solutions to larger corporations at this stage. Oracle and PeopleSoft applications with Oracle's infrastructure platform, SAP applications and SAP NetWeaver, and IBM technology and its consulting capabilities, are fairly comparable in this realm. Thus, to differentiate itself, IBM recently announced a new service to help companies build capabilities that support business goals, while freeing up currently overstretched information technology (IT) budgets. Offered through IBM Global Services (IGS), the new service oriented modeling and architecture (SOMA) is IBM's approach to solving a significant problem—how businesses can consistently develop more flexible technology that should provide the maximum possible return to the business. In the IBM grand schema of things, business processes, the building blocks of business innovation, will be created from an individual consulting project that leverages underlying applications, as needed and without devotion to a particular enterprise application providing vendor (which can be almost anyone with a worthwhile solution).

In SAP's view, however, business processes are part of the core functionality of mySAP Business Suite (and some selected third-party applications) that, along with new processes and Web services, will form the building blocks of next-generation applications. Responding to IBM, SAP also recently announced a new program which will also provide a set of combined software and services that will help companies improve their IT landscapes so that they can respond to changing business needs and to marketplace requirements more easily. To that end, SAP's ESA Adoption Program offers a formalized, step-by-step approach to help companies manage the strategic transition to SOA, based on their individual needs, while maintaining the productivity of existing systems. The program includes four key steps to support a customer's transition to ESA including

  1. grasping the vision through ESA opportunity workshops and total cost of ownership (TCO) discovery sessions;

  2. building a tailored road map based upon individual customer needs;

  3. implementing the offering and going live; and

  4. harnessing the value of ESA while effectively managing change.

At each step, SAP will provide customers with a portfolio of field-tested support services, which encompass a variety of tools, templates, samples, and workshops tailored to address separate needs of each organization. These services include an ESA and SAP NetWeaver vision value session, a TCO discovery session, an ESA enabling road-map workshop, and an ESA operations session on governance and security which will support their enhanced IT environment.

Oracle has a similar vision, although some will note that its technology roots have long been much deeper than its applications, and its understanding of how software is developed and deployed still stems form nearly thee decades of delivering market-leading database and tools technology. This has been stimulated by a million or so experienced Oracle developers and database administrators (DBA), whereby SAP is still a relative newcomer to the technology arena. But, SAP and IBM will gladly point out their respective industry savvy and applications leadership that go far beyond mere unified, data control and cost cutting from reducing the number of database servers.

The problem is that in the real world, most user enterprises have to live with many data repositories. Flexibility, which comes with breaking large applications into many smaller parts that can be arranged around various events, is often of greater importance. Seeing this, Oracle, like SAP, has been busy wrapping its traditional APIs with Web services interfaces and is actively building more, but it remains to be seen how far in granularity it will go.

This concludes Part Two of a three-part note.

Part One discussed SOA and its impact on business.

Part Three will look at the future.

About the authors

Olin Thompson is a principal of Process ERP Partners. He has over twenty-five years experience as an executive in the software industry. Thompson has been called "the Father of Process ERP." He is a frequent author and an award-winning speaker on topics of gaining value from ERP, SCP, e-commerce and the impact of technology on industry.

He can be reached at Olin@ProcessERP.com

Predrag Jakovljevic is a research director with TechnologyEvaluation.com (TEC), with a focus on the enterprise applications market. He has nearly twenty years of manufacturing industry experience, including several years as a power user of IT/ERP, as well as being a consultant/implementer and market analyst. He holds a bachelor's degree in mechanical engineering from the University of Belgrade, Yugoslavia, and he has also been certified in production and inventory management (CPIM) and in integrated resources management (CIRM) by APICS.

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