Friday, October 26, 2007

BriefingsDirect SOA Insights Analysts on IBM's Information On Demand, SAP's Business Objects Grab, and How WOA Meets Guerilla SOA

Edited transcript of weekly BriefingsDirect[TM] SOA Insights Edition podcast, recorded October 19 , 2007.

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Dana Gardner: Hello, and welcome to the latest BriefingsDirect SOA Insights Edition, Volume 26, a weekly discussion and dissection of Services Oriented Architecture (SOA) related news and events with a panel of industry analysts, experts, and guests. I'm your host and moderator, Dana Gardner, principal analyst at Interarbor Solutions.

We’re joined by a crew of three analysts and experts this week (week of Oct. 15, 2007) to discuss three basic topics, some timely, some deep and interesting. We’re going to discuss the recent IBM Information On Demand Conference and some of the news that’s emerged from that.

We’re also going to discuss Business Objects, its pending acquisition by SAP, and the news that Business Objects has been making in a very hot business intelligence market.

We’re also going to take a quick look at the pending or I suppose "sought- after" acquisition by Oracle of BEA, and what that might portend for SOA-oriented vendors in the space or the consolidation trend that we’ve been seeing for several years now.

[UPDATE: Latest business story around BEA and Oracle.]

The rest of the show today is going to deal with SOA and what’s also called Web Oriented Architecture (WOA). We want to sort out how they relate to one another, look at the notion of RESTful and some lightweight approaches and whether that is a subset of SOA or an alternative parallel universe.

To help us sort out these interesting topics, we’re joined today by Tony Baer. He is a principal at onStrategies. Welcome, Tony.

Tony Baer: Hi, Dana. How are you doing?

Gardner: Doing great. Also joining us, Jim Kobielus, principal analyst at Current Analysis. Thanks for joining Jim.

Jim Kobielus: Thanks Dana. Hi everybody!

Gardner: Also joining JP Morgenthal, CEO of Avorcor. Welcome JP!

JP Morgenthal: Hello, everyone and thank you.

Gardner: Let’s first get into the more time-sensitive issues. Jim Kobielus, you just came back from an intense road trip, attending both the IBM event and a Business Objects event this week. Let’s start with IBM. What are the main takeaways from the On Demand event that you attended?

Kobielus: It was Information On Demand in Las Vegas. About two years ago, IBM established an organizing framework for their data management, database integration, and other data solutions, called Information On Demand, and it’s just a big catch-all for the products they already had, as well as lots of new projects they’ve been developing to address data management under the SOA big top.

Last year there was a big splash, when they brought together all of their data integration and data quality tools under the solution family called IBM Information Server and integrated it all through common metadata and tooling. That was an excellent show.

This year another excellent show. I’ve been to lots of industry shows and have never been to a show with this many announcements on one day. On Monday of this week, IBM released 10 press releases, and even those press releases didn’t capture every nuance of every product announcement, enhancement, and initiative they've got going on.

It was overwhelming and impressive. First of all, IBM is enhancing pretty much every single component of their Information On Demand portfolio. They announced upgrades or enhancements to their databases, data warehousing products, their master data management (MDM) products, their data integration products under the Information Server portfolio, their enterprise content management products, the FileNet products, plus the preexisting IBM content management products.

They announced enhancements to the pre-packaged industry-solution accelerated frameworks for banking, retail, telco and so forth, to enable quick deployment of data integration and MDM.

They announced a broader range of new global professional services geared toward Information On Demand and various verticalized project accelerator offerings in Global Services. I'm looking at my cheat sheet right now, because I have to keep reminding myself exactly what transpired.

They announced that they have integrated their recent acquisition of DataMirror and its changed-data capture and a real-time replication technology into the Information Server data integration suite and also their database warehouse products and their MDM Products for real-time business intelligence (BI), data warehousing, and so forth. They also announced that they had re-branded the recent acquisition of Princeton Softech products Optim family under the IBM brand, but didn’t make any significant feature enhancements beyond what Princeton Softech was already providing.

They did lay out a reasonably good roadmap for further integration of Optim into IBM’s overall data governance and data management solution offerings. One very important uptake is that IBM, which has multiple MDM products they acquired from vendor acquisitions, is converging them onto a single product platform. That will be extensible and will be their flagship MDM server platform fully integrated into IBM Information Server and fully integrated into the DB2 9.5, the new version of the database and into the DB2 Warehouse 9.5 Data Warehouses. That’s a work in progress.

They’ve basically taken one of the existing MDM products, IBM WebSphere Customer Data Integration offering and they’ve made that essentially the DNA underlying this new converged MDM server, which will address more than just customer data integration for product information management, financial hubs, etc. So they have clearly designated a convergence platform that will be released sometime in the first quarter of 2008.

Gardner: Let me pause you right there. Now, just for a little historical context, IBM, which was very strong in databases for years with DB2, went on a bit of a buying spree a few years ago, including Ascential and some others, elevating the value of data, as a precursor to the move toward SOA. They recognized there were several major trends taking place that people wanted to cleanse and consolidate data, wanted to look at data as something separate from specific applications, and move towards the services-layer approach to data as well as MDM, and data warehousing, which is intelligence.

So, a number of industry-wide trends have buttressed IBM. They’ve been aggressive just recognizing that if they can offer a complete, integrated, and simplified approach to data as a separate resource unto itself, it gives them great entree into other aspects of SOA, as well as taking advantage of the hardware and storage requirements beneath this, the storage area network (SAN) requirements and also the management that helps their other management products such as Tivoli. Does that make sense?

Kobielus: Everything you said applies directly to IBM. One of the most exciting things from the show was that IBM is getting deeper into mashups with their tooling and their overall product and solution portfolio. In other words, everything in the IBM Information Server and the latest enhancement through all the databases is very SOA-focused, but now IBM seems to be getting into what someone call WOA through a mashup toolkit, IBM Mashup Starter Kit.

They have a mashup hub, this mashup online community called QEDWiki. And, more than just the tooling, they laid out a very interesting overall organizing framework to address this area called Info 2.0. It’s not a product, but simply a vision. They had a very good discussion of where they’re going, and it’s equivalent to some of the other interesting visionary mashup offerings in the data mashup.

Gardner: Just hold that thought. I want to go to Tony Baer. Tony, given what Jim has said about IBM and what you know about their emphasis and approach to data information, content, and almost any objects now, when you bring in FileNet and its capabilities, where do you put IBM in the greater scheme of things.

Do they really have a leadership position here or they’re trying to bite off too much? How do they compare to the other big data players, particularly Oracle?

Baer: What's really interesting is the whole idea of IBM biting of more than they can chew. IBM and Oracle are among the few organizations that could pull off something like this and not be overwhelmed by it. You and I saw this several years ago when Ascential had it’s analyst conference right after the acquisition by IBM and they revealed the roadmap. What's impressed me is that it’s been a very deliberate plan.

A cornerstone of that was Information Server, the whole information-server strategy. Ascential itself was kind of a mini IBM, a company that was glued together by acquisition. What they realized was they had all these disparate tools that ultimately related to the lifecycle of data in all those different forms, and, prior to the acquisition by IBM, they had a roadmap which, I believe, was called Hawk.

Kobielus: Hawk and Serrrano. They had two roadmaps, Tony. They had to converge last year.

Baer: Thanks, Jim. The interesting part was that it was all going to become metadata driven and that would drive all the data-integration and data-access strategies. So, I see that as the unsung hero of all this. It provided a more global perspective IBM needed and rationalizes all of these other initiatives. It’s not that everything is acting off of Information Server as a hub, but it provides a logical core or gut unification theory.

Gardner: Oracle, also dominant with their database and installed base, moved aggressively into middleware and business applications, particularly back office applications. Did Oracle give short shrift to this whole notion of warehousing, cleansing, canonical views of data and the whole BI area? Is Oracle catching up to IBM?

Baer: Oracle has had an obviously different focus, which is more at the application layer, whereas IBM has been more focused at the integration layer. Yes, Oracle now has the integration strategy called Fusion, but Fusion is like a big, blank space waiting to be filled. I don’t want to get ahead of ourselves here, but it’s part of what underlies the BEA acquisition.

Gardner: Of course, they paid a pretty penny for Hyperion trying to catch up in that.

Baer: Up until about a year-and-a-half or two years ago, Hyperion was IBM’s OLAP data-warehousing partner. One surprising thing during all those years was why IBM didn’t acquire OLAP. IBM eventually grew that capability themselves, but to answer your question, Oracle has been clearly focused on application integration, and they have all these application lines that are becoming the critical mass, the core focus of their business. So, from that standpoint, they probably have taken their eye off the ball in terms of data as a service, per se.

Gardner: Let’s go to JP Morgenthal. JP, as a CEO of a professional services and consulting organization, you are in the field. Rather than talk about this through the eye of vendor sports and who is doing what versus another, what are the users interested in, and how important are all these exclusive advanced data issues to them?

Morgenthal: You always have two different communities -- one very active, very leading-edge groups like financial services, and then there are always on the lookout for new technologies that are going to help them do their business faster and better, doing lots of more. They are not risk averse they are willing to throw some additional capital at those projects and see what they’ll bear. Right now they are the primary community that I see that’s really gung-ho on this.

The other group, let’s call them the moderates or the laggards, definitely view this technology as questionable. There are a number of people who walk the line, especially in IT, and say, "Oh yeah, SOAs the future," but have no idea why they are saying that. They have no understanding exactly how they would leverage it in an organization and, when given the opportunity to gain a better understanding, are more likely, at least in my experience, to push it off, stick with their existing environments, and not worry so much about SOA. In fact, they still lean towards, "I want a complete application. I really don’t want to play with this stuff."

Gardner: What about this issue of creating a comprehensive strategy around the lifecycle of data and about how that would be a precursor to SOA activities, but in the meantime getting the benefit of things like BI, data warehousing, data mining, and a better view across all the data that’s available into what's going on in the business?

Morgenthal: They love the idea. Right now, a majority of business management is focused on the business, the economy, and the other things affecting them. Those are nice to have right now, but aren't critical for most of them and that’s the way they view it.

Gardner: That's an interesting take, because this notion of getting your data act together isn't trivial. It’s very complicated, and there are a lot of interdependencies. It’s costly and it smacks of doing your homework in preparation for something that might pay off later. It's like eating your peas. Nobody wants to do it, but this is a discipline.

Therefore, people might be pushing it off, which relates to what IBM is doing, which is trying to make this comprehensive, more simplified, and more integrated, so that, in addition to those cutting edge organizations in such fields as financial services, this could be more palatable for the larger bell curve of enterprises. Does that make sense?

Morgenthal: From their perspective, yes. My concern for the industry as a whole is that people are going to view it as throwing a lot of consulting dollars down the drain and not seeing any value for it. I’ve recently joined the camp, at least academically, not in any way physically or throwing my weight behind it, but Guerrilla SOA is what I have been doing in my business. I just haven’t put a title to it.

I'm much more in favor of small, non-enterprise oriented, focused projects that deliver value within 30 to 90 days. I see that’s the greatest value right now for using these technologies based on SOA, Web services, and the like, because the enterprise stuff is nice, but right now it is too fluid for the industry to grab hold of. It’s resulting in potential large-scale problems for companies that have no idea how to build the distribution.

It all comes down to distribution. The problem with distributed environments is that very few people actually know how to manage them. In IBM’s case, they are one of the founders of distributed computing. At their core, they understand it well, but they buy too much into their own marketing hype and don’t tell customers well enough, "Hey, look, at the core of all this, of what you’re trying to do, trying to get more agile, we lived there. We built the first computers that became agile and communicated across network."

Gardner: Okay hold that, because we’re going to come back to that with our WOA discussion. That was very good. Let’s circle back quickly to Jim Kobielus. You also attended the Business Objects show, what was the big news there and what were people saying about the SAP acquisition?

Kobielus: The big news there of course was the pending acquisition by SAP. One of the good things was, at the very start of the keynote, Bernard Liautaud, the founder of the Business Objects, reassured the customers, employees, and partners that Business Objects will be a standalone product group under SAP. It will autonomous. It can continue to pursue its vision.

Right after Bernard spoke, they has a video from Henning Kagermann, the Chairman of SAP, issuing the same set of reassurances. Kagermann went into a little bit more detail in that video than they did the previous week when they announced that they are planning to acquire Business Objects. He said explicitly that SAP will not force Business Objects to use SAP technology.

It will up to Business Objects whether it makes sense to use a particular piece of SAP technology in any given product, but he reassured everybody that there will be growing integration between Business Objects and SAP offerings.

But Kagermann intends to have it both ways, because he then said, “We will also make sure that Business Objects maintains an equivalent level of tight integration with all of our competitors.” He's trying to have it both ways, but at least Kagermann was speaking the right speak. From my discussions afterwards, everybody said, "Yeah, I think they are speaking in good faith. So far, so good. We’ll wait and see." The deal has not been closed yet, and it will be a couple of months.

Gardner: This proposed merger, I think, caught some people by surprise. There is continuing consolidation in the BI space, and there are a couple of other players out there, including Cognos, that people are curious about. SAP seems to have maintained for some time that they didn’t need something like this, that they had already a sufficient visibility into operations and intelligence. What changed in the world or what changed in SAP that required them to go out and get this company?

Kobielus: Oracle. Oracle is into aggressive acquisitions and continuing to bulk up performance management, BI and everything else. I think SAP saw the writing on the wall. If you look at Business Objects, its total product portfolio, in many ways, overlaps with what SAP already has under the NetWeaver umbrella, but SAP has much more, of course. They are complete SOA vendor and a complete application vendor.

I see the convergences that are going on are all being driven by SOA mega brands that are continuing to bulk up on the full range of best-of-breed tools that enterprises are asking for. SAP, although it has BI, data warehousing, and data integration under NetWeaver, none of that is best of breed. It’s all primarily just in the box when you license their CRM or ERP applications.

Gardner: Not a lot of market presence for those yet, is there?

Kobielus: No, not really. SAP’s BI tools aren't on anybody's short list -- "Oh, I have to get BI and, therefore, I want to evaluate NetWeaver BI." SAP realizes that to go after Oracle or defend themselves against Oracle, they needed to bring in a BI mega brand under their big top, which is what they are doing.

Then again, there are a lot of complimentary aspects between the two companies in terms of product portfolio, but clearly there is a lot of head-on competition. Performance management is getting crazy now, because SAP acquired OutlookSoft, Business Objects acquires Cartesis, and several other companies, and now they've got excessive duplication of financial analytics applications under the SAP family.

Gardner: Speaking about mega brands and vendors, let’s move to this BEA-Oracle, proposed acquisition. Oracle apparently making a maybe not hostile, but not seemingly friendly, bid for BEA. BEA doesn't necessarily say "Go away," but, perhaps, "Sweeten the deal and we can talk."

Again, we don’t know how this is going to pan out over the several weeks, but we do seem to be having a bifurcated approach in the market. On one hand we've got the Larry Ellison view that it’s only going to be two or three IT companies in the world in 10 years, and he's going to be one of them.

Then we have this other view around WOA. What JP mentioned. Let’s just do Guerrilla SOA. Let’s do what's going to make sense for us and have a relatively short return on investment, something that brings us agility. It explains why stacks around LAMP and Open Source have been popular and why tools have moved to more of an open source in an Eclipse framework. It explains why things like Amazon’s EC2 are popular with people -- just make something, load it up, and use it -- and the advance of things like scripting languages and Ruby on Rails. This is a different approach to the market.

Let's go first to Tony Baer. Tony, do we need both? Do we need the big-vendor, top-down, mega-brand -- "We’ll do it all for you and in fact, we won’t even be your vendor, in a sense, we’re going to be a partner of your company. We are going to be linked at the hips for the next 50 years?" Do we need that, and, if so, at the same time, do we also have to have this grassroots, "Let’s do it with what we can -- simple, down and dirty?"

I believe Adam Bosworth a few years ago jumped on this and said, “Geez, let’s just do what we can do, use the Web, use the simple protocols, keep it simple.” How do these two things relate, top down and bottom up?

Baer: It really reflects the state of the software-development world today. Parts of this argument we could have had 10 years ago, the whole idea of the big umbrella vendor. If nobody wanted a big umbrella vendor and wanted best of breed, SAP would not be what it is today.

I remember during the emergence of the ERP market about 10 or 12 years ago, there was a debate: “Shall we go best of breed, versus an umbrella approach?" The market has clearly spoken. However, what you've gotten at the same time is a revolution that picked up steam with the original Borland IDEs and the popularity of bottom-up development, and was energized by the original Visual Basic. There is a powerful constituency of organizations that need Guerilla SOA and need to get it done now. It’s also behind the rise of agile development.

So, you're always going to have the two, because no matter how heavily an organization enforces enterprise architecture standards or has a standard reference architecture or preferred vendors and sources and technologies, there are always going to be people within the organization's small pockets doing their own thing. That was very much behind the rise of Linux.

So, the two will coexist, and the degree of presence within organization will reflect the internal culture and politics. I don’t think in any organization you are going to have a 100 percent of one and 0 percent of the other. They are going to co-exist, and the challenge is reconciling the two.

Gardner: Jim Kobielus, isn't there the likelihood that there are going to be some organizations that are centralized, that are going to make big strategic decisions and say, "We are an IBM shop, a Microsoft shop, or an Oracle shop?" And they will go to a full across-the-board partnership with that vendor. There might be certain advantages to that over time, in that they’ve only got one or two skill sets to maintain for development and deployment, and they can make deals with the vendor, but there is also risk. They get lock-in and they can be told what they are going to pay for IT, and not get a chance to bid for it.

So, there’s one type of organization, and we've seen plenty of examples of that. At the same time we've seen organizations that say, "Listen, we want to have a variety of technologies, to be experimental, to innovate, and to take advantage of the latest and greatest. We'd like open source, we like visibility." Are we talking about bifurcation between one kind of a company and another kind of a company or are these going to be influences that happen inside the same company, and but might lead to tension and even discord.

Kobielus: I don’t think it’s bifurcation between one type of company versus another. Most companies will continue to standardize on a limited range of strategic vendors for their core infrastructure. However, in every organization you have alternate sourcing approaches that different individuals and groups and functions pursue at various times.

Everybody is going to run around the corporate standard, if the corporate standard doesn’t meet their needs. It’s the actual knowledge workers, the end users. If IT can't give them what they need, they are going to find it some other way. If what the knowledge worker needs is not being funded out of capital budgets and being supported by IT, they're going to pay for it our of their monthly expenses. They are just going to grab it for free on the Internet and mash it up.

One of things that I liked at the IBM show was, as I said, the Info 2.0 strategy. They explicitly said, "We recognize that our core customers, the Fortune 500, the IT groups, etc., are very top down in terms of, "We would love them to go with the IBM mothership, but we recognize that the people on the front lines are feeling the pain points."

The knowledge workers don’t necessarily subscribe to that top-down, monolithic approach. They will go out and grab what they need from the Internet. IBM would love to provide the basic tools, be they closed source, open source, or whatever, that becomes de facto standard for knowledge workers meshing up everything allover creation. Different individuals in organizations take different approaches to get the solutions they need ASAP.

Gardner: JP, in the field, do you find that some of the clients you work with are of a mind to be either centralized and big-vendor oriented, comprehensive and strategic, or do they have a culture that tends to be more of the Guerilla SOA approach. Is it a shift from one company to another and how they do this? Or are these things happening simultaneous inside the same organization, both the top-down and bottom-up approaches?

Morgenthal: In the past year and a half, I've been focusing more on the small and mid-sized market, and these guys just want to get something done. The interesting thing is that they don’t spend their time sitting there wondering, whether they're going to do Web services or SOA. It’s more like 1,500 calls coming in a day, they’re being bombarded, and yet they still have to get stuff done. So, it’s the backlog.

Then you come in and you tell them, "Hey, in three weeks I can give you a completely new wrapper around everything you have, leave exactly what you have in place, but allow you to do everything you wanted to, the way you want to do it." At first, they say, "Right, show me." Once you show them, it opens up a non-stop flow. They get it the minute they see it.

The biggest and most exciting thing I have seen is that the end users, who have been using the same system the same way for maybe 5 or 15 years, get a whiff of this new stuff. At first they’re hesitant, but they approach it, they grab it, and they absorb it. A week later, they're asking you, "Can we do this, can we do that, can we do . . . " All of a sudden, it just starts a fire, and that is really the most amazing thing I have seen a long time.

The alternative in my world is to spend a year implementing Red Prairie, Manhattan Associates, JDA or something like that, and, maybe after painful process of learning how to use all the new screens and new data, you might get something good out of it. You can just almost feel the "running on ice" that the end users are getting through this process, versus the modern quick, "Wow, this is amazing. Let’s build it and let the business drive it." They take hold of it and they take the responsibility. They're hungry and they start asking for new features within a week

Gardner: It really opens up innovation at a level where people in IT can have a complementary relationship, rather than a sequential one.

Baer: Yeah, it’s a cool development by so-called amateurs, facilitated by their social network-- the whole Web 2.0 thing. It has a Facebook paradigm almost.

Gardner: Lets do a little primer stop here on WOA. As I said, my first smell of this in the market was probably four or five years ago, when Adam Bosworth, who, I think, at the time was with BEA, and who recently just left Google, brought a sort of manifesto. "Enough with all this distributed Java stuff, the heavy lifting, the intense object orientation, and these long, sequential development projects that take 6-12 months. Let’s get down and dirty with the lightweight, take advantage of open source, start using scripting and being 'of, for and by' the Web."

That sort of led to talk of rich Internet applications (RIAs) and we had the arrival of and wildfire around AJAX, that was related to SOA activities, where we could have mashups and front ends of Web services that would relate to a SOA backend or architectural approach.

Then about a year or year-and–half-ago, we started seeing WOA. I believe it was a Gartner acronym -- they are very good at acronyms -- and it’s also been called Enterprise Web 2.0 or Enterprise 3.0. But, it’s really putting emphasis on REST, as a way of leveraging HTTP as a Web service, and now WOA is becoming more of an emerging best practice. Guerrilla SOA better captures what it’s up to or about than WOA. We have seen a number of people, including Dion Hinchcliffe, be prolific on this.

So, this notion of an application with a REST style for building Web services based on straight HTTP and XML sort of applies to what JP has been talking about. Are we talking about the same thing? Are Guerilla SOA and WOA the same thing, Tony Baer?

Baer: I would say that conceptually they're similar. I'm sure there are probably purists who would probably come up with their own unique definitions to reflect the idiosyncrasies of each of the terms, but, I think it refers to an overall style that JP describes very well from his experiences in the field. It’s the same drive that’s basically made agile-development techniques so popular.

The idea is that we have pain points we need to address today, but we need a planning methodology that’s robust enough so that we don’t keep chasing our tails. At the same time, we also need technologies we can use to make this simple.

For example, when you look at just the difference in style between conventional Web service and RESTful, there is a little bit of an irony. Conventional Web services were touted as a simpler alternative to an earlier incarnation of SOA, which was CORBA. This reflects a growing maturity in the field. As we started getting a little more experience working with some of those Web-services technology, we realized that maybe we didn't always need those complicated SOAP headers. So, why not dispense with that, because most of our needs right now are for simple things like fetching data.

So, going back to some of the old SQL metaphors, a lot of the RESTful style owes a huge debt to SQL, simple commands for getting, inserting, and changing data. So, if it gets the job done, who cares about trying to do these complex, composite, orchestrated applications? Let’s just use some REST style, and by the way, why don’t we just mash up the results on a screen.

Kobielus: Can I say a few things?

Gardner: Yes, please.

Kobielus: I could out-acronym Gartner any day of the week, so I'm going to call it GOA. We have Guerilla Oriented Architecture versus Governance Oriented Architecture. When we talk about standard SOA, it’s GOA, for governance, software development lifecycle, and so forth. Until a couple of days ago, when you guys told me of this acronym, I hadn’t even realized that there was a new acronym here.

The ‘W’ in WOA stands for Web. If you think about the new paradigm, the ‘W’ could stand for Water cooler, it’s Water cooler Oriented Architecture. It could stand for Wow!, the user doing something and saying "Wow, hey, I'm going to share this with you in my social network. Look at this that I just built. Can you add on to this? It could stand for Wiki . .

Gardner: Or Widget.

Kobielus: Yes, Widget, exactly. Hey, I’m going to write this down. It could stand for Wiki Oriented Architecture, that sort of governance-light, or governance-free style. It could stand for Widget…

Gardner: Wisdom Oriented Architecture, wisdom of the crowds, right?

Kobielus: Yeah, I'm agreeing with everything that Tony, JP, and you, Dana, have said. This is coming on like gang busters. If IBM feels that it needs to assertively establish its own framework in this new paradigm, and then to provide multiple tools, and to really put a high-level mucky muck to talk about this vision with the analyst community, I think it’s pretty serious.

Gardner: All right. Is this a case of barbarians at the gate, where we have got the water-cooler folks, who are just technically savvy enough that they can do mashups? Some of the younger folks who come into organizations from colleges where they have been building their own pages for years are very adept at working with scripts, HTML, and XML. Are they just going to say, "Listen, we’re not going to have anything to do with IT. You just give us the APIs, give us access to the data, and we'll make the business processes, the Guerilla SOA happen." Is that what we've got here?

Baer: Yeah, pretty much.

Gardner: JP, what do you think? Is that what you’re seeing?

Morgenthal: We can’t help but to constantly be impacted by the knowledge of students coming out of school more and more technologically savvy. My kids started using a computer at three years old. They were already programming at 13-14 years old. So, are you telling me that they’re going to sit around and wait for Joe up in IT to come down and fix something? Are you kidding me? These kids are setting up their own network. They’re hooking up wireless. They’re using cell phones as tools.

These people are not going to sit around waiting for some guy in a glass house, and businesses better learn that now, and better start preparing for it now.

The way to do that is to start looking at their existing systems and figuring out where things are bottlenecked, where things are log jammed, and let them run with it. Otherwise, they’re going to get frustrated and they’re going to go to the places where they can do that.

Gardner: So, it’s almost a radical departure. We’re looking at innovation almost like we’ve seen in markets. Venture capital will spend dollars across multiple startups, knowing that a large percentage of them will fail, but that they get innovation and they get disruption as a result, and they are willing to accept that risk.

It seems as if we could take this a radical step further, which is to say, we need to decompose and change the actual structure of corporations, to not be large assemblages of reusable and extendable and scalable resources; whether it’s logistics, shipping, manufacturing, energy, or IT. Instead, we should look at this more like an ecology, a universe of different folks -- either individuals or small groups -- going out, being innovative, letting some of them fail, but when something sticks and works, then start using it as a standard operating procedure.

Does anybody share my view that this could really move towards a radical change of how corporations are actually structured?

Kobielus: What it comes down to is that a corporation innovates, differentiates, and survives based on the initiative of individuals taking the bull by the horns and solving problems. So, in a sense, BI could stand for Business Initiative.

It comes down to the knowledge workers and the people who are in the operational front lines. Generally they feel the pain, and, therefore, they have the greatest personal stake in implementing a solution ASAP at some micro level that addresses at least their local pain point.

So, you want to empower these people. You want them to feel that there is a quick time to a solution, that the solution is within their control, and that they can implement it without too much paperwork and bureaucracy.

Gardner: The recent The Economist magazine that came out October 15 has a special section on innovation. Interestingly enough, they sort of pointed out the same conundrum. The corporations traditionally needed to exist because of the requirement of huge capital brought together in large R&D budgets to solve massive technical problems. They're being overshadowed by groups of 8 to 10 people that then create a startup using their credit cards, access to Web services, and low-cost computing, storage, and networking. Innovation is happening among these small groups.

It almost negates the advantage that large corporations have had. If it's the case that the structure of the corporation shifts towards grassroots, be it inside the organization or from small companies that they look to as suppliers, or potential acquisition targets, then what does that say to the view of somebody like an Oracle or an IBM which are bulking up and trying to become everything to everyone, particularly those large corporations?

Kobielus: Well, it comes down to the fact that the centers of initiative or centers of excellence need to be encouraged. When I say "centers," actually decentralized centers of excellence, need to be encouraged, empowered, and have control over the tools available to them. They need to be able to mix and match across the SOA universe. They're not going to necessarily want to buy everything from Oracle, SAP, or IBM. It comes down to: they need their money and they need to be able to control the purse strings locally to meet their local requirements.

Gardner: What I’m getting at is that the rationale, or one major rationale, for the very existence of corporations was that they needed to have scale. They needed to be able to create enough capital under one roof to create efficiencies for all the participants in the corporation to leverage. Now, it's shifting away from "under one roof" to the Web, so that you can now get a lot of the resources. The scale and efficiency actually works more in your favor, when you go decentralized. That much you needed to do before under a large cap-ex expenditure kind of environment.

Does anybody following me on this? The Web itself and the WOA and the Guerilla SOA are all part of the same trend, which is away from the need for a large corporate umbrella, but that you can get things done, satisfy customer needs, be innovative and agile in new markets, and can go global, all based on not needing one big umbrella, but leveraging what’s able across a rich, fertile, open ecology?

Kobielus: You hit on the important metaphor there, and it’s a horticultural metaphor, away from the walled garden, toward more of a wildflower meadow. Let a thousand flowers bloom. A vibrant corporation is one that can to sustain an ecology of wildflowers. The beautiful ones pop-up and get cultivated, and, hopefully, it’s a prettier meadow, generation after generation, through natural selection.

Gardner: We’ve discussed on the show many times how SOA is disruptive, requires cultural and organizational change in companies, and it’s really hard. We’ve had the discussion of the culture within IT, and the culture within business. How are we ever going to get them to come together?

Maybe we ought to take the disruption discussion to another abstraction level, which is to say, "To hell with the big corporation, and the central IT department. Let’s create small, independent companies, where people can live and work anywhere, can contribute their expertise, can be innovative, and, in a sense, we're talking about the deconstruction of the monolithic corporation that’s been with us for a couple of hundred years.

Baer: Dana, if you look at the evolution of the manufacturing sectors versus the automotive industry, it’s a great case in point. There's been a devolution from the classic, "build everything under one roof," which was epitomized by the Ford River Rouge Complex to today's auto industry, where essentially they're putting together what could be called agile coalitions of suppliers. The companies that best tap that are the ones that can reduce time to market.

Gardner: What do you think, JP? Does that make sense, given the small and medium-sized companies you work with? Are they becoming aspects of various business change, and that it would never make sense for them to be all trying to bulk up under one large roof?

Morgenthal: I think they are years behind focusing on that. There are two aspects. There are small companies that have started in the last five years with the paradigm on their side. Then, there are hundreds of thousands of small companies that were started let’s say prior to the end of 1990s, not born of the paradigm, focusing on how to survive day-to-day. I think a Tsunami is coming their way, and they have no idea how to get out of the way, and they’re going to drown.

Gardner: Interesting! Well, I would like to take these technology discussions up a notch and see how they affect economics and behavior. I agree that we’re up against a real sea change. It’s not just the use of SOA or the changing relationship between IT and business within large companies, but the very notion of how capital can best be used, productivity be best leveraged and extended, how people can be made happy and fulfilled in their lives, make enough of a living, and have a stake in what they are doing?

It's going to take years or decades, but we really seem to be at more than just a shift here technologically. It really seems to be a shift in how business is done and how people relate to one another.

Baer: I'll add something to that, because I wrote a white paper, and this was one of my actual ROI propositions to these people. They have to face -- and nobody wants to face this key issue -- the labor shortage we're facing as the baby boomers start to leave the IT environment.

Everyone thinks that India, northern Asia, and Eastern Europe are going to be able to pick up the pieces of this old code, and keep running with it, as people start to leave the workforce here in America. The truth of the matter is that maybe in 15, 20, or 30 years they might be ready to, but there is more to understanding codes than just reading it. It’s understanding the context behind it.

I worked with an offshore India team quite closely. They get the code. They can do anything you tell them to do, but they don’t understand the business context behind the code. You can explain it 20 times, and they still won’t get it. They absorb things most times at a very, very technical level. They can be excellent development teams, but there is a difference between being able to understand the business context of why something is done and doing it just because this is the sequence of events.

Therefore, you’re going to have a huge gap in about 10 years of people who understand the business context behind the stuff leaving the workforce. Nobody wants to face that. Nobody wants to invest in it. Nobody wants to understand it. And, nobody wants to think about how do I move from where they are to where they need to be, so that they're never impacted by this again? That is our next "millennium problem." The millennium bug, the year changeover, the devastation it caused, that’s nothing compared to people leaving the workforce in droves.

Gardner: We have this big labor swap out, and they’re not fungible. One can’t replace the other. It has to be a shift toward something new and different.

Baer: It doesn’t have to be new or different. You need to get to a point where the business context isn’t so tightly encapsulated in the working system, but with the people. You can’t lose knowledge. Right now that knowledge is heavily entwined.

Gardner: All right, let’s leave it there. Again, another great discussion. I appreciate your time. We’ve been talking about the announcements from IBM at their Information On Demand Conference, the pending merger of Business Objects with SAP, the proposed merger of BEA and Oracle, and how all those things relate to what we now know as Web Oriented Architecture, but what I like better is Guerilla SOA.

To help us work through this, we’ve been talking to Tony Baer, a principal at onStrategies. Thanks again, Tony.

Baer: Dana, thanks much.

Gardner: Jim Kobielus, principal analyst at Current Analysis. Thanks again, Jim.

Kobielus: Always a pleasure!

Gardner: And JP Morgenthal, the CEO of Avacor. Thanks, JP.

Morgenthal: Thank you, and I’m glad this time I could have more input and value than I did in the last conversation.

Gardner: You were fine before too. Don’t worry about it. The last time, we had seven people on, so, a smaller group is better.

I want to thank you for listening, this is Dana Gardner, principal analyst at Interarbor Solutions. You’ve been listening to the latest BriefingsDirect SOA Insights Edition, Volume 26. Come back next time. Thank you.

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Transcript of BriefingsDirect SOA Insights Edition podcast, Vol. 26, on industry mergers and acquisitions, Guerilla SOA, and Web Oriented Architecture. Copyright Interarbor Solutions, LLC, 2005-2007. All rights reserved.