Tuesday, December 05, 2006

Transcript of BriefingsDirect SOA Insights Edition Vol. 5 Podcast on Microsoft and SOA

Edited transcript of weekly BriefingsDirect[TM] SOA Insights Edition, recorded Nov. 10, 2006.

Listen to the podcast here. If you'd like to learn more about BriefingsDirect B2B informational podcasts, or to become a sponsor of this or other B2B podcasts, contact Dana Gardner at 603-528-2435.

Dana Gardner: Hi, and welcome to the latest BriefingsDirect SOA Insights Edition, a weekly discussion and dissection of Services Oriented Architecture (SOA)-related news and events, with a panel of independent IT industry analysts, journalists and guests. I’m your host and moderator, Dana Gardner, principal analyst at Interarbor Solutions.

And this week, the week of Nov. 10, 2006, our panel consists of show regular Steve Garone. Steve’s an independent analyst, a former program vice president at IDC, and a founder of the Align IT Group. Welcome, Steve.

Steve Garone: Thank you, it’s great to be here.

Gardner: Also joining us again this week is Joe McKendrick. He’s an independent research consultant and columnist at Database Trends, as well as a blogger for ZDNet and ebizQ. Welcome back, Joe.

Joe McKendrick: Hi, Dana, it’s a pleasure to be here again.

Gardner: And making her debut on SOA Insights Edition is Mary Jo Foley. She’s a blogger for ZDNet’s All About Microsoft, a former Ziff Davis Media editor as well as a former eWEEK star reporter. Welcome to the show, Mary Jo.

Mary Jo Foley: Thanks, Dana.

Gardner: A return guest this week is Jeff Pendleton. He’s a former IT and marketing executive at HP and BEA. Welcome back, Jeff.

Jeff Pendleton: Thank you, great to be here.

Gardner: Our discussion this week will center on two topics, both, of course, SOA-related. The first is Microsoft, which just had its Developer Connection event in Las Vegas, and Mary Jo attended that. Recently, I’ve been seeing some different positioning from Microsoft around SOA. They seem to have avoided the term SOA for some time, although a number of things that they do are very much SOA-aligned.

Now, they’ve been coming out with more lingo, or marketing, around SOA -- if not in the actual technology approach, at least in terms of the business values and the rationale for embarking on SOA. I say that because of the recent article I read that quoted Charles Fitzgerald, who is, I assume, the SOA marketing maven at Microsoft. His title is .NET Platform Strategy Group General Manager.

So, he’s a pretty good indicator of where the momentum is, and the direction is, for Microsoft on these subjects. He was at an event, the Microsoft Architect Forum 2006 just last month in Seoul, South Korea. He said of SOA: “It’s not about a product or skill, but rather it’s about style -- how one comes up with the system and basic approaches -- replacing or rewriting, depending on a particular business situation.”

It really does sound like he’s coming at this from a composite, inter-related services, re-use perspective. He also says that getting time-to-value is key and starting a practical approach to SOA makes sense. So we’re seeing from Microsoft a lot of the same kind of terminology we’ve heard out of BEA, IBM, and number of the other SOA vendors.

I want go to you first, Mary Jo, and ask you about what sort of sense you got at the latest Developer Connection event. Is Microsoft talking the talk around SOA, as far as you can determine?

Foley: You’re right, Dana. They really aren’t using the term "SOA" at all. The whole time I was in Las Vegas this week at different sessions I never heard anybody from Microsoft even mention the term. But as you’re saying too they’re introducing the pieces, and they’re talking about the value of integration.

Their whole “better together” strategy also incorporates not just Windows and Office, but also the .NET framework and Visual Studio pieces too. So, yeah, they’re definitely talking the talk, without actually saying the word.

Gardner: Interesting. Now, let’s go to you, Joe. What do you think is going on here? Do you think that Microsoft is only going to go as far as Web services on interoperability? Do you think they see SOA as a threat? Or is it just “SOA the Microsoft way,” and they don’t care to use that terminology?

McKendrick: Microsoft’s secret to success -- actually I wish I knew a little more of it -- since the day Bill Gates set up his first shop down in New Mexico has been playing to a mass market. You never see Microsoft make a move unless a mass market already exists for their product or technology.

Microsoft, rightly or wrongly, continually gets accused of copying, stealing, or co-opting the ideas and technologies of others. But that’s because it’s not a pioneering vendor. They don’t take the lead in moving into a technology space. They wait until this critical mass, this mass market within the vital center, crops up. And this suggests that perhaps SOA has reached that stage.

SOA is no longer the sole domain of the large organizations, large corporations, large government organizations, but it’s something that’s moving down to the mid-market and the mass-market. Typically, you wouldn’t expect "Joe’s Machine Tool" factory down the street to be worrying about SOA at this point, but perhaps, we’re getting close to that point.

Gardner: What do you think, Steve? Is Microsoft so departmental-level-oriented that they’re not interested in SOA until it becomes a bigger deal in the enterprise?

Garone: It’s an interesting question, and just to tie into the last point, I think there’s a counter-argument to the notion that they wait until things reach critical-mass before they get on board. I think probably the best example of that was Web services. I think it’s fair to say that Microsoft was fairly early into that game.

Gardner: Yes, the WS.* stuff, right?

Garone: Right. And I think the reason for that ties in to our conversation today to some extent, which is that Microsoft really needs that sort of services-based interoperability-founded paradigm, if you will, to be able to play in the enterprise, because it’s a single platform company and it needs to get beyond that.

So it tries to raise the level of abstraction and say, “I can play with everybody and here’s how I’m going to do it in a standards-based way.” In the context of this conversation, Microsoft is grafting to some extent onto the SOA concept for that same reason. Interestingly, if you look at some of the talk around Microsoft’s approach, they started to use the term “real-world SOA,” and the rationale for that is that organizations should not take this enterprise-wide, global view of SOA right away, but should start incrementally, in terms of solving individual business problems.

That’s really the core message: “Focus on your business, not on technology.” The reason for that may be that, in fact, Microsoft really isn’t ready to do the IBM thing when it comes to SOA. So, they’re trying to talk people down. But I think in terms of your question – Is Microsoft really serious about SOA? -- I think they are. They’ve got a stack of software that, to some extent, looks very much like what other vendors have. And, I think they’re going to continue to drum home that message.

Gardner: Do you think there’s some risk if Microsoft positions themselves as interoperable through standards? In effect, “Do all your development deployment around our stack, and if there’s other integration to be done, we kind of leave you to your own devices.”

When it comes to that lower level -- messaging level -- integration, where SOA seems to say, “Hey, use whatever you’ve got, let’s exploit your legacy and be an abstraction above those stacks,” does Microsoft run the risk of missing out by not going to that abstraction above the stacks?

Garone: Part of my point was that I think that they’re attempting to go above that. The old issues of, “Are their products scalable enough to be able to deal with very large global implementations?” is still an issue.

But, in concept, they’re trying to go above that. Recently, I saw a press release that says they have incorporated adapters for System i and System Z from IBM into BizTalk 2006. So, they’re looking at doing as you said -- getting that legacy, if you want to call it that, integrated into their view of what SOA should be.

Gardner: Let’s go back to Mary Jo. Did you see or hear much about the Microsoft equivalent of an enterprise service bus (ESB), their Windows Communications Foundation (WCF), which used to be called Indigo? Did they discuss that in terms of what you use to tie together all your Microsoft stuff, including all your legacy Windows -- because there is quite a bit of heterogeneity just within the Windows environment over the years? Do they talk about using it a lot for wider integration?

Foley: Yes, they’ve talked a lot about it at the conference, because they were talking about the .NET Framework 3.0, of which Indigo is one main component. The way they were talking about it to the audience that attended this conference was more about how you can mix and match managed APIs and unmanaged APIs.

And they’re encouraging people who are thinking about developing all kinds of apps -- custom apps, shrink-wrap apps -- to look at WCF as just one element of the way you tie things together, when you’re building an app. So, that was more the context they were talking about it at this conference. They weren’t really talking about it as a bridge across different kinds of systems from multiple vendors. It was more, “If you’re developing in the Microsoft universe, this is how you should think about it.”

Gardner: It almost sounds as if they’re expecting you’re going to need another ESB in addition to theirs in order to get the full benefit of SOA, as we’re currently defining it. Jeff, you’ve been an observer of Microsoft for a number years, is Microsoft singing the same song or are they opening themselves up sufficiently to be considered an SOA vendor?

Pendleton: I think they’re definitely moving very aggressively toward SOA. They may not be marketing and promoting it yet, but I think that they’ve actually been thinking about SOA, without necessarily using that term, for quite some time.

So when you talk to folks up there, the "Metropolis Conversation" comes up quite often. I know that they’ve had a couple of SOA events for some of their premier customers. I don’t think that we should assume that they’re not part of the story, and that they don’t get it.

They’re partnering with folks that you do think of when you think of SOA. I can’t tell you what their strategy is because I’m not quiet clear on it. I’m not privy to it. But I think you’ll probably hear more and more from Microsoft around the SOA story in the coming weeks and months.

Gardner: And, of course, we’ve seen some new tone or style from Microsoft vis-à-vis partnering with folks like Zend with PHP; partnering with Novell for SUSE Linux interoperability and patent protection.

So perhaps the notion is: write in anything, use Common Language Runtime in .NET, and then deploy more broadly with choice -- recognizing that because of virtualization and because of grid/utility, that the instances of underpinnings for services is really not where the game is at any more. The game is how you associate, mash-up, and aggregate services to create valuable and agile business processes. They can’t miss this business. This is the new business, right?

Pendleton: I think there are two ways to look at SOA, and I think Microsoft is taking probably a broader view of the term.

You started to talk about mash-ups, for example. Well, right now that’s the claim to fame for Web 2.0. If you’re a CIO trying to make sense of all of this stuff -- whether it’s creating virtualization, and so on -- you can either use SOA as an organizing principle for all of that. Or you can look at it as somewhat distinct from all of these other interesting trends and ideas.

And I think what Microsoft and some of the other organizations are doing is sitting back a little bit, waiting to find out whether SOA is going to become its own pillar, or whether it’s actually going to become an encompassing umbrella. I think Microsoft’s view is that it’s really more of an umbrella, under which to organize a lot of these other terms that are quite honestly starting to confuse the IT community.

Gardner: Help me understand a little bit better these two distinctions, or directions for SOA: the organizing principle and the umbrella principle.

Pendleton: Well, I think that if I were a CIO right now I’d probably have a massive headache, because you have these camps forming around these different notions. Before it was Web 2.0 and Enterprise 2.0. Well, what’s that? Why are they different?

And then you had the whole grid, and then you had mobility, and center networks. What you have are all of these disparate, or what appear to be disparate, concepts. And if you’re sitting back there with a fairly limited exploration budget, what do you do?

Do you fall into the Web 2.0 camp? Is that really a camp? Right now, the market has so many buzzwords, or so many “platforms,” to consider that it’s again freezing the deer in the headlights.

With SOA you can either look at as a distinct camp, competing against other distinct camps, or you can look at it as a way -- as an umbrella under which all of these other things make sense. That comes back to Microsoft’s point, which is that SOA’s not really a technology. It’s more of a philosophy of how to approach IT going forward.

Gardner: According to Charles Fitzgerald at Microsoft, SOA is not about a skill; rather it’s about a style.

McKendrick: If I can interject here, it’s interesting, a fellow named Jack Greenfield, an enterprise architect over at Microsoft, a couple of years back published a paper, “Defining a Strategy,” which he called “Software Factories.”

And essentially what he said was that going forward software development at all levels will probably resemble the way industrialization changed the economy earlier in the century. He calls it “mass customization,” where you are actually going to have perhaps pre-built modular construction, kind of a move away from single-item customization and toward a mass production kind of model.

His paper kind of defines the direction Microsoft is looking at over the long term. It’s particularly a design-time development side, and Microsoft is strong in the developer community. That’s their natural constituency.

Gardner: Isn’t that another way of saying that software development is going from the equivalent of an “artisan, craftsman, renaissance-era, funded by the Medicis, money is no object” thing to more of a “Henry Ford assembly line, interchangeable parts” -- an Eli Whitney and the cotton gin -- kind of mentality, where it’s industrialized, with not so much of the handcrafting. If the handcrafting is going to happen, it’s going to be in the handcrafting of the first parts, but then those parts will be assembled on a standardized, highly repeatable process.

Garone: Exactly. That’s well-put, and Microsoft’s goal since day-one has always been to make computing easier for folks who don’t have a lot of technical background. You can pick up Visual Basic fairly quickly, even though you may not have a technical background. They see this as the vision going forward for enterprise applications, not that non-technical people will be put into enterprise applications development, but you won’t need to re-invent the wheel and have a degree in rocket science to master this.

Gardner: Steve, you and I have talked a lot about the complexity as a possible speed brake on SOA adoption, and in the understanding of it. Do you think that Microsoft, given it’s history of working diligently to simplify the development-deployment process -- albeit around a proprietary environment -- is what’s necessary to make SOA sell?

Garone: It is true that Microsoft really has a lot of strength in the developer community, and has been lauded for a number of years now on the quality and ease of use of its tools and its approach to software development.

There’s really is no doubt about that. And I think that the point that was just talked about, while not really a new idea, is all about reuse and ease of development and development efficiency and so on. That is definitely a strong component in making SOA successful, but it really isn’t SOA.

Creating modularized software is one thing. Bringing that to the next level of creating services, and creating the interoperability among services, that’s required to do SOA -- with all the infrastructure, governance, and security, and so on -- is a whole other level.

And again, I think Microsoft does appear to be telling that story more and more. They are telling it in their own context, which again has two components. One of which is: Start incrementally and solve this specific business problem. I think we’ll hear more from them, and I think it will become more and more part of what their message is going out to world.

Gardner: Mary Jo, I know you need to drop off, and I certainly appreciate you joining us, but one more questions for you. Did you get a sense from the latest that you’ve heard from Microsoft that they are focusing on the crafting of these services individually -- services that will play together well -- but that Microsoft is not necessarily yet focused on how to associate, choreograph, and manage services, regardless of where they came from?

Foley: Now, what do you mean when you’re saying “services?”

Gardner: Well, “services” would be an application or business function, let’s say an order or billing function, that would be something you could drop into any business process, where that same function would be required. And that service might be running on your own servers. It might be running on some department server ... or it could be outsourced, or even from a partner that you have in your supply chain.

Foley: It’s interesting that Microsoft had another conference in Europe – their Convergence EMEA Conference -- where [Microsoft Chairman] Bill Gates was keynoting. There, they were talking about business processes as services, and their vision there is really changing quite a bit, given the company’s move to making everything into a "Live" service by making it either ad-supported or subscription-based.

So they’re actually trying to talk about some of their products that have traditionally not been available as services now in the context of them being services -- things like their dynamic ERP products and dynamic CRM products. They are also encouraging third-party software vendors to think that way, too, and to introduce business processes as services. That would snap into the Microsoft Live Office context and framework.

Gardner: Now, another thing that Gates said in his address at that conference was that he thinks Microsoft is in the best position to tie together back-office and front-office applications. That kind of gives us a hint as to maybe what they’re thinking about SOA.

And, of course, they had to shift gears as a company pretty dramatically only in the last year-and-half by elevating [Microsoft Chief Architect] Ray Ozzie to his position and creating this whole Live Office approach. And so the notion is that perhaps they have to compete with both SOA, in terms of a BEA and IBM definition of SOA -- but they also have to compete with Google and the Web 2.0-type of functions that are a direct threat to their desktop revenue stream.

So it’s a difficult maneuver for them to do a trajectory toward SOA, but also covering their behinds when it comes to Web 2.0.

Foley: I was actually going to ask you guys -- because I am really curious whether the whole notions and concepts around SOA can fit in with the kind of "Live" vision that Microsoft is talking about. Or are they opposites in a way?

Gardner: I think they’re actually complementary. We’ve heard a lot of of rich Internet applications as UIs and GUIs, but that represents services on the back-end in most places. What’s your take on that, Joe?

McKendrick: Agreed. Also, despite all the talk of Linux and the move to rich Internet applications, Microsoft still owns the desktop. Surveys I’ve done, surveys I’ve seen, confirm just that.

The desktop and the Office worker, the information knowledge worker, still rely on Windows at the front end. This is at least a third of Microsoft’s revenue, and it really shows no sign of abating. Novell has been aggressively promoting the notion of a Linux desktop, but it’s still got a long way to go. The notion of connecting the front end with the back end is natural for Microsoft, because that’s their home turf -- the front-end desktop.

Gardner: Indeed. Before they had this change on the Windows Vista time-table, where [Microsoft Platforms and Services Division Co-President Jim] Allchin and others had to come in and say, “Well, we have to postpone this,” they were really talking up this notion of using Office applications as the front-ends for back-end services, rather than have the Web continue on its trajectory. the had decided to double-down on Office applications as the new best front ends.

Of course that was also in evidence when they had the Mendocino project in cooperation with SAP, around using Office applications as a front-end to SAP processes in the back-end.

Now, let’s go back to you, Jeff. Is that what we are seeing here -- that Microsoft is in a very difficult ju-jitsu position of trying to embrace and extend toward SOA -- but at the same time needing to have a defensive posture vis-à-vis these Live services, such as what Google does, and to be able to monetize those around advertising, while also trying to craft a new future for the Office applications?

Pendleton: Good question. I don’t know that I have keen insight into what’s keeping Microsoft awake at night. I do think that they are very well positioned, given where we’re going right now with SOA and other things.

I can’t venture a guess on what's going on at Microsoft in that regard, other than to say they really are partnering very aggressively with folks that have in the past been their competitors. And maybe they’ve always done that.

But around the notion of SOA I get a distinct impression that they understand that their vision of SOA isn’t that much different than what others have. Yet they come from a unique position in terms of how to connect and collect these services and begin over time to play a syndication role.

So they’re actually in a very good position, but there are so many things going on right now that it’s hard to predict what's ultimately going to take root and really drive SOA forward.

Gardner: All right, back to you, Steve. It also seems that Microsoft is in between these trends: SOA, let’s call it a major trend, and then Web 2.0 with perhaps an assault on the Office franchise.

There’s also a shift in business models. That is to say, more people are expecting the business to shift from an up-front licensing, client-access-license-model to more of an advertising-based or subscription-based model, or both.

Microsoft obviously needs to make this transition, as do as other vendors. What makes this more complicated -- even though Microsoft is in a good position given its penetration in the market – is that it also has to manage it’s own internal politics. There are different elements within Microsoft, and they’re in charge of these different product sets in these different domains.

So they have to also manage this transition in the business model internally. My question to you, Steve, is: Yes, Microsoft is well-positioned, but don’t they also have a quite a bit to chew here? And isn’t this really a very thorny issue for them?

Garone: I’m not sure that the issue is as thorny as it is unique to Microsoft. Being the size they are and having the variety of products and services that they provide -- the political and organizational thorniness goes up exponentially with that level of diversity.

So I think it’s definitely a big problem, and I’m not sure I’m in a position to give a lot of insight on internal Microsoft politics. But it’s serious enough that if it’s not handled well, it could have a major impact on the company’s future.

I've seen it happen in other places. I was an employee for number of years with Digital Equipment Corp., and saw new business models literally bring the company down in a lot of areas because of this kind of internal friction. So, it does happen.

On the brighter side for Microsoft, I think that you know I would like to think that Microsoft has a more of a new-age view of the world in that it understands it has to be agile, and it was built on the notion that new business models are what's going to drive their growth.

Hopefully they’ll take that religion to heart. But I don’t have a lot of visibility, unfortunately, into what's going on internally at Microsoft. I can’t say with any certainty that they’re going to be able to deal with that well. But, again, a lot of their competitors are going to have the same problem.

Gardner: I guess Microsoft, given its position and its balance sheet, has the ability to tolerate a very large margin of error if they need to. Right?

Garone: Right! But also the discussion a little bit earlier centered on their ownership of the desktop. Ultimately, if you put the word desktop in quotes, then that is really what’s going to drive them. I put it in quotes because, in fact, the desktop may look a lot different in 10 years than it does today.

Gardner: Isn’t the whole notion of the desktop being itself virtualized?

Garone: Absolutely. So when you dream into the future -- not necessarily with what exists today, but what it might be -- and you think about the notion of virtualizing computing resources and making everything you can a service, and having all that interoperability, the notion of a desktop may change to something that isn’t even on your desktop when you turn on your machine. But when you access a service, that will define what's on your desktop -- even including the runtime and operating environment.

Gardner: I would argue that the concept of desktop is outmoded and obsolete, and we really should focus on the processes, applications, and productivity. Perhaps you’ll keep your address book, but your files will probably just be another point in some cloud or element within the general cloud that you don’t need to be concerned about. What you really are going to focus on is productivity and process.

Garone: Nobody has a crystal ball at this point around this forum they we’re having right now. I think it’s important to remember that context when you think about where Microsoft is going to go and how it’s going to adapt.

Gardner: Let’s move on to our second topic of the day, and that is to pick up where we left off last week in trying to figure out the best way of conceptualizing SOA’s business value, and to then be able to take it out to the market.

In our past discussion, we said, “Hey, let's bring [Apple Chairman] Steve Jobs in on this," because he is really good at bringing technology into a passionate -- almost zealous -- direction for people, and they follow him in that regard. But then we also figured that if Steve Jobs were trying to market SOA, he wouldn’t even mention SOA.

Then, we got into this notion that SOA really should be something that is like a sound stage, or an architectural blueprint -- a way of being able to construct and then deconstruct and to be agile with business, rather than technology. Has anyone given additional thought to that, and where should we take this discussion next in terms of emphasizing the rationale of why people should go to SOA now rather than just sit back and wait and watch?

Garone: I’ve been doing a lot of talking with both vendors and end-users recently and I think where the discussion needs to go is around is that the vendors seem to be caught up in a contradiction in terms. When they go out and talk to their prospects and customers about SOA, they try their best to create a message around business value, business agility and bringing real value to a line-of-business manager.

But then they immediately switch to tell you how valuable and how of high-quality their ESB is, and why you should use it. I think that’s a real issue today, because it really confuses customers.

On the one hand, they are being evangelized to about why they should be going in this direction, and on the other hand they are being pushed into a specific implementation that may not be right for them. So, the vendors face the real challenge in terms of being able to evangelize why people should do SOA and educating people about SOA in terms of how it impacts the business, and on the other hand to be able to go ahead and sell their products and bring their own revenue levels to where they want them to be.

Resolving that issue in a way that will help both vendors and end-users understand better, and be able to be more successful, is really the conversation that needs to be had.

Gardner: Jeff, what's your reaction to that?

Pendleton: That’s right on the mark. SOA is a great conversation to have, but at the end of the day, with the marketing community and the sales community, they need to sell something. Right now, given how amorphous SOA is and how it can be just about anything, it is complicated from a vendor perspective to walk away with an order.

What really needs to happen is that there needs to be a compelling story around the 21st Century enterprise, what that really means, and what some of the attributes are. We need to talk about SOA as an enabler and a cornerstone for that 21st Century, but there are other cornerstones. And we are not really talking about that so much.

How do you need to view your people? Are these folks that are tied to a desk almost automatons doing a routine process, or are they really plugged into the external environment? How are you organized?

Gardner: I would think optimally that your people would not be doing rote process, but they would be defining what the new next process is.

Pendleton: Exactly. But I think that for SOA to really capture the imagination of the business community -- which ultimately is going to have to fund this thing through some sort of a capital expense increase -- we are going to need to create something more compelling and inspiring, than just the “agile” or “adaptive,” or "whatever" enterprise.

That’s why we came back to the Steve Jobs notion. We need folks out there, we need inspiration right now in the business community, to say, “Here is what you should be shooting for, and if you don’t shoot for this you may not be relevant here in the next little while. And one of the enablers of this is this thing called SOA. So, let's go talk to your IT guys about this SOA thing.”

Gardner: Yes, I guess on a higher level we’re really talking about IT transformation, and not on its own -- but IT transformation as an essential ingredient to business transformation.

Pendleton: We lead with business transformation and how you do that transformation. One of the things is how you manage your people going forward, and the other is how do you manage your IT going forward.

Gardner: You mentioned "agile" and "adaptive." Just recently I’ve noticed that HP is now doing some different advertising, at least to the financial community. In the Wall Street Journal you have these pictures of people upside down. They are the IT people and they are saying turn your IT upside down, which to me sounds like IT transformation.

But instead of adaptive enterprise, they are now taking the marketing positioning that their Mercury acquisition had around BTO, Business Technology Optimization, which is a broad, but pretty direct, definition of what we are really trying to accomplish.

Pendleton: Right now IT is still this monolithic, fragile, complex -- take all the negative, skeptical terms – entity. Most line-of-business executives really don’t like to go into the IT space. I don't think that IT is being positioned around the strategy table as something that's really going to help move the organization.

A lot of the fault lies within the IT community itself. Over the years, we’ve tried to dazzle and use rocket science as a way to define IT. The reality is that IT needs to be part of the day-to-day thinking -- not the day-to-day excuse -- of business.

Gardner: IT has perhaps over-promised and under-delivered over-budget, which has tended to pigeon-hole it into being a cost-center and an inhibitor of agility. That's what really needs to be adjusted. Do you agree with that, Joe?

Mckendrick: I agree with that, but I think we have come a long way. If you look at the world as it was even 10 years ago there was this chasm between IT and the rest of the business. Nowadays, folks on the business side are much more savvy about computers. Everybody has a laptop and a home computer, and the world has really changed in that regard. You have a generation of employees coming on the scene in their 20s and 30s, who grew up with computers. They know to a large degree how computers work, the logic of computers, and what computers can do for a business.

Gardner: You can pull their PC out of their cold, dead hands -- right?

McKendrick: Exactly. So, on the business side there is a greater understanding of computer technology and what and how technology can deliver services. It’s a much greater understanding than it’s ever been in corporate history. On the other side, you are seeing and hearing about this tremendous push to get IT folks to understand the business and work closer with the business.

I have spoken with folks at university programs, training both technical and business people, and the courses that get the greatest attendance are those that talk about the convergence of business and IT -- IT folks taking business classes, for example, to understand the business.

Gardner: Another event this week was the Web 2.0 Summit, the O’Reilly show in San Francisco, where Intel came out with a Web 2.0 suite -- I think they are calling it SuiteTwo -- which is a series of independent, largely open-source-backed and -based features and functions, if you will, of Web 2.0.

They are directing it at the enterprise, to say, "Do your blogging, your wiki’s, and your podcasts. Do collaboration, communication, and social networking -- not just leaving it out in the ether for people to do for their personal life issues and their entertainment media issues. But bring it into the environment of the enterprise. We can use these tools for building consensus around a process or doing exception management through a wiki-based approach."

That’s an interesting ingredient here that I don’t think we can divorce from SOA. It is part of taking advantage of these younger folks who would like to do things this way, but then bring that into the enterprise in some controlled fashion, so that the older IT people will not be threatened, but actually embrace it.

Steve, what do you think about Web 2.0 vis-a-vis SOA?

Garone: There is a lot of discussion about it, and I think to some extent it's happening. But when I go out and talk to those communities, what I see is that the business folks most of the time really just draw a picture, bring it over to the IT managers, and say, "Do this for me."

They are not quite there yet, and they don’t believe that the IT folks are really where they need to be in terms of not just talking with them about business, but actually thinking business when they do their work. I am not really sure what that means, but I keep getting that feedback that they are not thinking in the right way in the eyes of business mangers.

The bottom line is that there is a ways to go, and we are not quite there yet. It’s important to recognize, in terms of just how quickly and with how much energy, this new world that SOA is a part of will move forward and be adopted. What you just described in terms of Web 2.0 sounds fascinating to me. I wasn’t privy to the information that you’ve just told us about in terms of Intel, but doesn’t that sound exciting when you think about it?

Gardner: Perhaps, if we are talking about the inhibitor here being people in the way they think, in the way they conceptualize their job -- what it is that they are expected to do -- then perhaps it’s going to be fear of competition that ultimately drives this. If your competitors think differently, embrace some of these new concepts -- SOA, Enterprise 2.0, Web 2.0 -- become fleet and agile at a lower cost over time, then you really don’t have a choice, right?

Garone: Another element to talk about is the fact that I have been hearing a lot of people talk about SOA and presenting case studies on SOA recently. One the things that really comes through to me is that, despite vendor’s efforts to evangelize around the benefits of SOA in terms of business agility, and be more competitive and so on, virtually all the case studies I see focus on the benefit of saving money, saving resources, and being able to run lean operationally, and being able to develop applications more efficiently. It's really all about cost to these people at this point.

Gardner: Another accelerant in the movement toward SOA, whether you call it SOA or not, whether you are Microsoft or not, is the emergence of software-as-a-service companies that themselves are starting from a green-field position using SOA to create business applications.

So, another development this week that has a big bearing on this is Dave Duffield, the man behind PeopleSoft, coming out with something called WorkDay. They took a look at the business applications environment and then built his offerings on an ESB -- it happens to be a Cape Clear ESB -- to create services swiftly and agilely, and at probably significantly lower cost.

This could have been done in the past -- because he has done it in the past -- but the new offer is a set of business applications as services. They might be very attractive, if not to the large enterprises, then to the small or medium business. If WorkDay can make their business work through SOA, doesn’t that in a sense spur on others?

Pendleton: Exactly. There is another company, Reardon Commerce, which also has built its infrastructure on reusable components, SOA-enabled components, and Web services. The company started offering a travel service and so forth to corporate clients through this framework, and they have expanded -- again reusing the components they have in place -- to also offer additional business services such as inventory tracking.

Gardner: Jeff, let's give you the last word before we start wrapping up. And that would be: Do you see software and service organizations like WorkDay and Reardon as a primary accelerant to the adoption of SOA? Or do you think that a competitive issue -- that if your competitor does SOA better than you do, then you are going to be at a significant disadvantage -- is the driver? Or is it both?

Pendleton: There's quite a bit of debate in the industry right now about software services -- being able to buy components of your process and being able to plug it in. Software services is a natural fit within our definition of SOA, and I think it's going to become more and more apparent over time.

So, I would say both. I do believe, though, that we’ve still not come up with the compelling picture, tag line, whatever you want, for SOA for business people like we have had in the previous waves. We don’t yet have an "e-commerce" equivalent right now.

Gardner: Wasn’t IBM kind of the force behind e-commerce as the definition, and then taking and spending a significant amount of money in marketing that?

Pendleton: Yes, E-Business.

Gardner: I guess we will be looking for that.

So, to sum up a little bit, some interesting things out of Microsoft. We’re going to expect them to get into SOA more. Perhaps they are taking a little bit of a wait-and-see approach. They’ve got a full plate, given the multi-faceted challenge before them.

And we’re also looking at SOA perhaps creeping in as a competitive issue as well, spurred on by software as a service in terms of cost, with small- to medium-sized businesses perhaps adapting first, rather than the larger enterprises.

With us to discuss this have been a distinguished and interesting panel, and I thank you all: Steve Garone, Joe McKendrick, Mary Jo Foley, and Jeff Pendleton.

I wonder if we could all do our due diligence for disclosure exercise now. I’ll start. The companies that were mentioned that I do business with and are sponsors of my podcasts include Cape Clear and Hewlett-Packard. I think that’s it. Why don’t you go next, Steve.

Garone: Based on the companies that were mentioned here really right now, it's just IBM.

McKendrick: Likewise, it's IBM.

Gardner: And, Jeff, you don’t have any corporate affiliation at this time, so you’re clean. Mary Jo, I believe, is a blogger alone and doesn't have sponsorships or consulting arrangements with vendors.

Great, so I’d also like to alert our listeners if they’re interested in learning more about BriefingsDirect, B2B informational podcasts or to become a sponsor of this or other B2B podcasts to please contact me directly, Dana Gardner, principal analyst at Interarbor Solutions at 603-528-2435.

Thanks for joining us and come back next week for another edition of BriefingsDirect SOA Insights Edition. Thanks everyone.

Listen to the podcast here.

Transcript of Dana Gardner’s BriefingsDirect SOA Insights Edition, Vol. 5. Copyright Interarbor Solutions, LLC, 2005-2006. All rights reserved.

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