Showing posts with label Ajax. Show all posts
Showing posts with label Ajax. Show all posts

Friday, October 19, 2007

BriefingsDirect SOA Insights analysts on BEA, Google/Capgemini and systems integration

Edited transcript of weekly BriefingsDirect[TM] SOA Insights Edition podcast, recorded September 10, 2007.

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Dana Gardner: Hello, and welcome to the latest BriefingsDirect SOA Insights Edition, Vol. 25. This is a weekly discussion and dissection of Services Oriented Architecture (SOA) related news and events with the panel of industry analysts and guests. I'm your host and moderator, Dana Gardner, principal analyst at Interarbor Solutions. On our panel this week, and this is the week of September 10, 2007, we have Tony Baer, a principal at OnStrategies. Welcome, Tony.

Tony Baer: Hey, Dana, how are you doing?

Gardner: I'm doing great. We’re also joined by Jim Kobielus, principal analyst at Current Analysis.

Jim Kobielus: Hi, everybody.

Gardner: Hi, Jim. Also, Brad Shimmin, principal analyst at Current Analysis.

Brad Shimmin: Greetings, Dana.

Gardner: Welcome. Our topics this week are timely. We’re going to look at the recent BEA conference and some of the announcements that came out of that. We’ll also take a look at some of the issues around management and SOA, something that’s been of great interest to me.

Last, we’ll look at the Google announcement that Google applications, software, and service offerings which are closely aligned with Microsoft Office offerings will be supported by Capgemini, a large enterprise systems integrator (SI) and professional services organization, giving a bit more credence to the virtual applications suite approach.

First, let’s talk about BEA World. Let’s go to Brad Shimmin. Brad, you were there. We had some announcements about registry repository. We had some announcements around rich internet applications (RIA) and partnering with Adobe, and then also some ticklers around something called Genesis. Why don’t you give us the update?

Shimmin: Thanks, Dana. I’d be glad to. I was at the show, and Alfred Chuang was kind enough to do a keynote and to take some questions from analysts afterwards, which was unusual and very good. It was a great experience.

What I found most intriguing from the pretty big list of announcements they made was the under-the-radar partnership they did, not with Adobe, but with a company called Enterconnect, which is an on-demand portal company. They just announced a site called SOAApps.com, an on-demand software and service-based SOA environment. BEA partnered with them to provide the infrastructure for that.

So, any time Enterconnect sells a software-as-a-service (SaaS) SOA solution, BEA is going to get a chunk of that money, because they’ll be rolling out the infrastructure. What I found interesting wasn’t so much that partnership, but the way the BEA is positioning itself as an enabler of SaaS-based SOA environment. Everyone is saying they want to get on the SaaS bandwagon, but BEA is very well positioned to do that, because of what they’re doing with the virtualization software. You guys saw how they announced a new user-based licensing scheme for the virtualization software.

Gardner: Right.

Shimmin: Well, they're going to transfer what they learned from that to the stuff they’re doing with Enterconnect. So, down the road, they're are going to be able to have back-end software that’s going to know how to charge back and account for how the software is utilized. BEA is going to be pretty well positioned for that, and that leads into what you were talking about with this nebulous Project Genesis.

Gardner: Brad, just for the edification of our audience, what do you think BEA means by "SaaS SOA?" Are we talking about the ability to create services and make them available in someone else’s infrastructure, or are we talking about bringing that infrastructure into your enterprise and then being able to yourself create some on-demand business model?

Shimmin: Actually, it's both. They're an enabler, and that's in the positive sense. They have a strong history of partnering with ISVs and other vendors in space, and that’s going to continue for them within the SaaS space. You can look for them to provide the backend infrastructure that other companies can utilize in selling their wares, like they do it for GXS, for example.

At the same time, and that’s why it leads into this Project Genesis thing, Alfred mentioned that what they want to do for all the Weblogic and AquaLogic software is not only virtualize it, but to have that software such that it can be deployed in either an on-premises or a SaaS-based environment.

Gardner: It sounds like BEA, with some across the board approach to the pricing and business model, is trying to allow for these virtualized environments to be acquired by SaaS or on-demand providers with a low upfront cost, but then with a recurring revenue model and a sharing revenue model associated with it.

Shimmin: Exactly. That’s the Enterconnect partnership in a nutshell. Right now, BEA is the only company that’s thinking about those issues and put a pricing issue on this front.

Gardner: That’s a significant departure for BEA. In the past, they've been large capital-intensive, high-performance, and niche-oriented, when it came to their middleware and transactional and application development deployment strategies.

Shimmin: Absolutely.

Gardner: How does that affect them as a company? It’s a tough transition for any company to go from large upfront project-based revenue to a slow ramp-up recurring revenue model. Did they try to ameliorate those concerns amongst say financial analysts?

Shimmin: They had a financial briefing, which I didn’t attend, so I don’t know if they talked to that point exactly. In a roundabout way, they said they're certainly not abandoning that side of their business and see that as a very important thing for them in long-term. I don’t think they are going to try to switch. They're really just trying to build up.

Gardner: They can continue to provide high-performance transactional licensed product to the financial sector, government, and manufacturing, where they have been strong, and, at the same time, focus on this burgeoning on-demand ecology.

There might be enterprises that want to get into a shared services bureau approach internally or externally. More and more, I expect we are going to start seeing organizations like Salesforce, Amazon, and Workday that will provide more application services and composite services and then charge for them on a monthly user basis.

Shimmin: Exactly. They'll be charging the Salesforce.com folks to do this, but they also think -- and this is an interesting and weird thing to me, Dana -- that partnerships like Adobe and Enterconnect will be their ticket into the SMB market.

Gardner: Right. They don’t do really anything now.

Shimmin: Exactly. Adobe is now going to bundle in their application server with their development environment. They've already been integrated in the past, but they're now going to bundle up the pre-license and provide frontline support both ways. So, they have bundles on either side and each company can provide first-level support themselves.

Gardner: It sounds as if, as an attendee and an analyst at the conference, you came away not so much impressed with their product announcements and their technology roll-outs. but more with their shift on business model and their partnerships?

Shimmin: Exactly. Tangible announcements really centered on their registry repository. That's something every company is doing and it didn’t strike me as being unique, except this for the fact that their Metadata Interoperability Framework (MDIF) that they have for the registry repository is something they are trying to get partners to write to, and they already got Skyway on board.

They've have got some moxie going behind them there, but that's stuff that every company should be doing. I don’t really see that as being unique. The technological announcement they made is on a 10.3 server, which isn’t coming out until much later. So, it was more the direction.

Gardner: Before we bounce this off of our panelists, maybe you could offer what you think Genesis is. It seem quite nebulous.

Shimmin: I wish I could provide some clarity, but from what I came away with, reading through releases, and listening to Alfred, Genesis seems to be two different things.

When I read the releases, it sounded like it was going to be some totally new approach or direction. After listening to Alfred and talking to some folks around the conference, it seemed more like an extension of what they are already doing. I'd say it was a wrapper around things like their SOA 360º and WorkSpace 360º, ThinkLiquid, and other initiatives that they have. I was a little disappointed, because I feel that BEA put too much emphasis on these initiatives and they ended up muddying the waters and preventing themselves from making an impact.

The reason why I say that is that Alfred was saying, “Well, this is stuff we already have, a lot of the technology we already have. It's based on a lifecycle approach that is role-based for whoever it is, the IT analyst, the developer, or the business analyst."

So, it really isn’t anything dramatically life altering and new. It'a an extension of where they have already been heading.

Gardner: It sounds like a marketing exercise to try to take some steam out of the competitors in the market, maybe even a little FUD.

Shimmin: Yeah, I agree, but a positive FUD, nonetheless.

Gardner: Maybe it’s, "Let’s race to this goal. We're on our way. Let’s see who can get their first."

Shimmin: I agree.

Gardner: Let’s go to Tony Baer, now. You wrote in your blog that you are somewhat underwhelmed with the BEA announcements, but, given Brad’s perceptions of a shift in business model, I wonder if that’s changed your outlook at all?

Baer: I'll put it this way. The Enterconnect stuff, added to the virtualization strategy on which they've been embarking on for about the past year or so, is definitely the most interesting nugget of all this. The other stuff just seemed to be a lot of big marking buzz words for "We have upgraded our registry repository. Now, we have published our interchange format."

The question is whether that has anything to do with what Object Management Group (OMG) has been pushing all these years, which is their meta-object facility (MOF). Basically, it’s the idea of having some sort of standard to exchange data in and out of repositories, kind of like a like a Holy Grail.

My sense here is that it makes sense for BEA. BEA has always been an infrastructure vendor, SaaS vendors need infrastructure, BEA might as well step up to the plate and supply it. So, that is interesting.

The other thing I read in all this is that I could see that, through SaaS, it would be route towards the SMB market that BEA has never really had, because they have always tended to be coming in at a high price point. There's definitely a response to Red Hat and JBoss, on one hand, and Oracle, on the other. They need some strategy there.

The question is, though, can all this produce the types of revenues that will provide a growth path in terms of absolute revenues, compared to their traditional high-priced ticket business. I am not really sure about that, because the whole idea of SaaS is that it’s subscription and supposed to be cheaper. Well okay, we lose a little bit on each sale, but can we make it up in volume.

Gardner: I share this concern about BEA. Its stock has been bumping along at about $11 a share for several years now. They've been having some ups and downs on their licensing revenue, but nothing approaching the strong growth they had early on, led by the transactional processing capabilities and then their application server development-deployment stack. You're right. It’s also difficult from a sales perspective.

Its sales force has been out there creating enterprise accounts. How are those sales people going to go out and sell and be compensated -- and be motivated -- on this recurring-revenue model. It’s a whole different sales thing. It's hard to steer a big ship in a sales organization that way.

Shimmin: Dana, if I could jump in here. The impression I got from them was that they didn’t want to do that, but want to sell through Salesforce.com in the same model they already have. Here’s the big ticket. Give us all your money. Here’s your infrastructure and then Salesforce.com is the company that uses the model for subscription.

Gardner: In that case, we're really talking about a dozen or so major companies in the world to call on.

Shimmin: Exactly. It’s like the telco play.

Gardner: Yeah, the service-provider play. But, to address Tony’s point, those dozen or so major players are going to be very cost conscious, driving down to a volume business with low margins. Open source is certainly going to be near the top of their short list for consideration and architecture. They're also going to be looking at pure play and best-of-breed approaches. A number of these SOA infrastructure players have already targeted the SaaS and on-demand infrastructure markets. I'm thinking of Cape Clear, IONA and a few others. Let's go over to Jim Kobielus. What's your concern from a business perspective about BEA making this transition?

Kobielus: The concern I have is the same one you articulated, that they are moving away from the software license revenues, which have been their mainstay, towards a wide variety of go-to-market delivery mechanisms for getting functionality out. Now, there is the whole SaaS model, the virtual appliance model, and so on. It’s the same concern that I've expressed to Business Objects in the business intelligence space.

Looking at the BEA announcements, I am impressed with the various announcements that came out of their conference this week. It shows that they are expertly surfing the paradigms in terms of rich Internet applications (RIA), social networking and, SOA governance, and virtualization on demand. I see an exact parallel in all the initiatives to what Business Objects is doing in the business intelligence (BI) space. Business Objects and BEA recognize that their mainstay, the software license revenue model, is slowly dissolving, and they need to have alternate packaging for their existing technology.

So, looking at BEA this week, I see them more or less trying to stay on top of this very turbulent time, when its not clear how software companies will make a living in the next decade and beyond. They are going to need, as I said, multiple ways of delivering functionality to very focused marketplaces, such as the small and mid-size business marketplace.

I like the fact that that BEA has at least put a foot in the SaaS channel now with the Enterconnect partnership. I like the fact that they now have put a foot into the virtual software appliance space. Business Objects has in the last two months, seriously ramped up its SaaS strategy and is going to be working with third-party SaaS companies. Their growth is strong right now, but I think they recognize, as BEA recognizes, that the party eventually will end for traditional software companies.

Gardner: If there was any hesitation by IBM in aggressively moving to this marketplace, perhaps this will reduce any of those latencies, and IBM will say, "Okay, we are on. Let's go for it," and IBM will be knocking on these same doors.

Kobielus: I'll let somebody else on this call speak to that, because I am not really up on IBM’s open-source strategy.

Gardner: Let's go to Brad. Do you think, now that BEA has declared its intention to go after these providers, hosts, SaaS and ecology players, like a Salesforce, that IBM will walk up to the plate as well and also offer a variety of both commercial and open-source configurations?

Shimmin: Absolutely, Dana. IBM obviously has a strong heritage in the open-source market and will continue to apply that as they go forward. Their strategy is a little bifurcated right now with their ESB, open source versus close source, it’s not the same code base, etc., but still I think they're pretty well positioned to do that, if they choose to. They've got the muscle to do it, so they would be able to win in that game.

Gardner: What about Microsoft? Can Microsoft walk into these same organizations with its stack and its integrated, but albeit a window-centric approach, and compete with either an IBM or a BEA.

Shimmin: They already have. It’s not live yet. I think it’s still in Beta mode, but they have their BizTalk Services, which is a hosted SaaS-based SOA, at least for integration, that they are playing out. They have their partnership with GXS for trying to host integration services. So, they're really positioning themselves in the SaaS market. If they can tie BizTalk services to their Dynamics Live, their line of business applications that are hosted, they'll be able to hit the mid market pretty hard.

Gardner: So, as we're seeing with other waves of adoption in IT over the past few decades, the first big push into the market tends to come from highly innovative players that create their own architecture and cherry-picked components. I'm thinking of the underlying architecture of a Google, an Amazon, or a Yahoo! Then, as the market adoption moves towards more of these on-demand, Web services, and Web-based approaches, some de-facto standard or configuration becomes more prevalent and ultimately dominates the market.

Do you think we are at that phase now? Is the whole SaaS, on-demand, and hosted-services delivery market going to be looking for that de-facto standards, and BEA, Microsoft, IBM, Red Hat, open source, and mixed-breed configurations will all be vying for that.

Shimmin: Yes, and I think they will all be legitimate too. All that’s really going to matter is that they are able to speak the common language of SOA for interfaces into the company’s line of business applications internally.

Gardner: It’s all price/performance, isn’t it?

Shimmin: Exactly right.

Gardner: One thing that open source might have an advantage with is paying for maintenance and support, and is therefore on an incremental payment basis, and not a large capital-expenditure approach.

Shimmin: That’s both for the software and for management of the software. The vendors who are really going to make it big here are the one’s where you aren’t just buying the software. You remember how IBM had to plug into the back of the servers where they would monitor and manage your systems as the vendors, who are able to do that, as part of their subscription, I think they are going to have a foot up on the others.

Kobielus: I agree with what you said, Dana. As more and more software vendors come out with multiple packaging concurrently of the same technology or the same functionality, they're going to have the repackaged software, the SaaS, the hardware-appliance version, the software-appliance version, and possibly the open-source version of the exact same solutions. There is always going to be like one initial version, usually the licensed and packaged software version, that will essentially set the standard for all the other alternate packaging of that same technology.

Let me get back to Business Objects. I don’t want to keep harping on them, but they are a perfect case in point. Business Objects this year rolled out an SMB-focused packaging of their core BI technology called the Crystal Decisions line. Now, they've got three versions of that: standard edition, professional edition, and premium edition. Business Objects this week said that next year, they're going to release, in conjunction with VMWare, a virtual-software appliance version of Crystal Decisions’ standard edition with more or less the same functionality.

Business Objects a couple of months ago announced that they're also going to be implementing a hardware appliance version of all their products with various partners. They're going to have SaaS versions of all their solutions at some point in the future.

So, what I am getting at is that they are going to have all these different ways of slicing and dicing the same technology. In the beginning of commercial television, its shows were just filmed radio shows, until the programmers of this new medium figured out, "We can actually package stuff differently, and should, for this new medium, because that allows us to do different things."

Software appliances are almost like filmed radio right now. Over time, though, they will be morphed and will have their own unique set of features entirely distinct from the packaged software ancestors from which they descended.

Gardner: That relates to a recent BriefingsDirect SOA Insights Edition that we did with Jim Ricotta, general manager of appliances at IBM. He certainly led us to believe that this is going to be an aggressive direction for IBM, probably more on the hardware/software combined appliance and not so much on the software-only appliance, but certainly these configurations are percolating up in the market.

What’s interesting to me is that for these service provider type of clients, the systems' integrators are not really involved. They've been pushed to the side, and it’s the vendors themselves that are creating these configurations, which the architects within these organizations will then adopt. Does anybody want to react to the systems' integrator role in this market?

Baer: Theoretically, in having SaaS, putting it on an appliance, or however you want to take out some of the pain of all this, the idea is to bypass the system integrator. On the other hand, the fact is that maintenance still tends to be very labor-intensive. Fortunately, with remote diagnostics, you don’t have to have that labor on the site, and so a lot of that could go towards the maintenance part.

The chances are, even if you are small or mid-sized business, you may start consuming services from a number of different SaaS vendors. In other words, you are unlikely to put all of your eggs into the Salesforce basket. You might have some Salesforce. You might also have some Business Objects. Somebody's got to make the tool work. So, I see roles for SIs here, if they can be agile and adaptive.

Gardner: So, we'll wait to see some standards configuration and perhaps some leadership by certain vendors for this infrastructure on a price/performance basis. Once that settles out within the service provider sector, then that will give them, ready entree into enterprises. It’s about the right time for enterprises to start moving meaningfully towards service infrastructures.

Baer: The one part I would disagree with is on the standards. There may be standards, but as we have had Web-services standards, even though you have WSI, which is supposed to be a test bed for interoperability, you still don’t have true interoperability. What they do is get you in the ball park.

Gardner: I was referring more to industry de-facto standards, not necessarily technical or enforced standards.

Kobielus: Right, but my sense is that there are always going to be some final assembly and fasteners that you're going to have put together that are just not going to be completely covered by standards. That’s an area for SIs. It sounds like its ideal for them. They will make the stuff work.

Shimmin: You know what, guys, the threat to the SIs isn’t so much from standards. It’s from the business process management (BPM) front, and the modeling and empowering the company to take control of the application it's building from the business process out.

Gardner: In a sense, the infrastructure is coming off the wire, and therefore it’s value added. It’s all about the process integration.

Shimmin: That’s right. Most of the money these guys make is on long-term engagements, where they send folks in to talk about how the process is going to be built into the software.

Kobielus: It’s all about best practices, those templates in the business content, all of that. And, before long, the final assemblers -- where all the money is going to be made in what’s now called the software industry -- the SIs themselves are going to be agile not only among different vendors, but within any one vendor's product architecture.

They will mash up the ultimate versions of the software -- open-source software, software virtual appliance, SaaS, whatever -- of any one vendor's product portfolio in creative ways in which it probably hasn’t even occurred to the vendors themselves. So, they are going to rely on the SI to be creative mix and mash-up developers.

Gardner: Wouldn’t that be what Project Genesis might be alluding to?

Shimmin: Exactly, but that’s not so much for the integrators but for the enterprises that are employing the integrators

Gardner: And then to your point, Brad, that, in a sense, diminishes the role and value of the integrators?

Shimmin: Right. It just lessens the amount of money they make. Their role, as Jim has said, is going to be important, because they're the ones who have to do the final assembly, It just means the upfront costs aren’t as great.

Kobielus: Actually, that brings up another point I wanted to make. Once again, I can definitely draw a parallel with what Business Objects and other BI vendors are doing. I wasn’t at the show; Brad was, but as I was reading through the Project Genesis press release, they talked about social networking and involving the various roles -- in other words, IT people, and also end users and subject matter experts in the development and mash up of SOA and Web 2.0 -oriented applications.

The direct parallel in the BI world, as well as master data management, data integration, and data quality, is that they are all enabling the database administrators (DBAs), subject matter experts, and data stewards, who are business users who have responsibility for particular datasets like customer data. They are providing them with the tools to collaborate over the lifecycle and management of master reference data, etc.

Every one of the BI vendors that’s worth anything is innovating in that exact way. They're bringing the end user, the people with domain expertise, into the ongoing development and administration of these environments through Web 2.0 AJAX -type tools and social networking-type services.

Gardner: Let’s move on to our next subject, which is somewhat related, now that we’ve gotten into this, and that is Capgemini, a large global SI, saying, "We’ll help Google applications and support them inside of enterprises." This is an interesting development.

So far, we’ve heard about Google being interested more in how small offices, individual users, and productivity users would use their SaaS. Now, we have this opportunity for enterprise play. Is this a movement towards more of a SOA and SaaS for more than just rudimentary desktop productivity applications?

Shimmin: Well, Dana, it’s two things. First, it’s a legitimization of this approach, and it ratifies that it's something that’s valid for the enterprise, which I think is terrific over the long-term, because we do need competition to the Microsoft desktop paradigm.

Second, it heralds a direction in which the SIs want to go, which is being able to be more nimble in how they deploy the software. They like to be in bed with the company they work with, but they don’t want to have to wake up there every time.

Gardner: Single-source problem, right.

Shimmin: Right.

Gardner: Does anybody else have an impression about Capgemini, and I guess others saying. "Yeah, we’ll help companies figure out how to take something like Google applications, widgets, and other SaaS and integrate so enterprises can best deliver value to their internal constituencies?"

Kobielus: It’s another approach to client virtualization. There is the client, in this case a full desktop productivity suite, now completely virtualized across the Web, but virtualized in a way that's enterprise friendly and enterprise safe,because you've got an experienced SI and outsourcer like Capgemini behind it. As Brad said, it definitely legitimizes Google in this area. It legitimizes this approach. As to whether anybody in any great numbers will adopt this service, I seriously doubt it.

The Microsoft hegemony holds tight on the desktop and will for the foreseeable future for reasons that many other analysts have commented on over the years. I thought it was an interesting story, but I don’t think it’s going to rock the industry any time soon.

Gardner: That does make a good sense, when we only factor how these applications would be delivered into an enterprise’s internal constituencies. What about some innovative business development activities, whereby a company that is public-facing or is interacting with its clients outside of the organization, might want to start integrating and mashing up such services as Google provides?

Is there an opportunity for an enterprise to become more of a service provider, but start borrowing services from Google at very low cost, because Google monetizes through advertising and then integrate those, mash those, into what they provide to their end users?

Kobielus: Yeah, that’s one potential role. More and more of the Web 2.0 paradigm is focused on user-generated content. So, we have the whole Wikipeida approach. There is a potential for somebody who wants, for example, to start up a commercially-driven or advertising-supported Wikipeida-type distributed reference book, to contract out to Google/Capgemini. They would provide that collaboration infrastructure with the authoring tools and the version control and all that to support such a venture, where it’s user-generated content, and not everybody just slapping up HTML or dot-doc content.

You want people posting rich content that has been prepared in accordance with templates that the proprietor of this online encyclopedia, or whatever, might dictate. So, you say, "Well the price for participating in our environment are the constraints. You use the tools that we provide, and, by the way, they are Google tools supported by Capgemini, or whatever.

Gardner: I am thinking a little differently, not tools, but actually having word processing, communications, instant messaging, presence, and mobile commerce functions and features embedded into high-value offerings. Enterprises and companies could deliver these out to end users, supported by Google’s infrastructure and services, and integrated through an organization like Capgemini.

Another way to look at this is that as Enterprise 2.0 activities kick in, once again, the SIs might be saying, "We don’t want to be left out of this. "We have to get into this mash-up business." What do you think, Tony?

Baer: Definitely, That’s definitely what I was thinking, when I was talking with Capgemini folks the other day. We always talk about how SaaS and SOA are supposed to simplify the job of systems integration. Well, as you put all of this SaaS and SOA out, you still need to put this together. Maybe new mechanisms and emerging and you want to outsource a lot of this stuff. Something like what Capgemini is doing with Google apps is an interesting stake in the ground and it makes perfect sense from that standpoint.

There's another thing I want to tie in. I talked before about the impact of Capgemini getting in there with Google apps. When I spoke with the Cap folks, they said un-categorically, “No, we do not expect to displace Microsoft Office, but there is still a large audience out there that’s not using Microsoft Office, where the economics have been pretty marginal at best to get people connected.”

I'm not even talking about the developing world, but people are in line operations who typically have not been connected by computers and don’t need this sort of thing. This is exactly the type of play they'ree talking about.

Gardner: The whole mobile end-point world, right?

Baer: Exactly.

Kobielus: The whole Net PC paradigm and the thin client Larry Ellison tried to get on board in the late 90s didn’t go anywhere in terms of the diskless workstation or the shop floor worker who didn't have their own PC, but would share a virtual PC with lots of other folks.

Gardner: But, what about a convergence device like an iPhone and all the other knock-offs that get closer to the iPhone function set?

Baer: A couple of things were playing at the time. One, Larry was trying to do it within his walled garden. Two, the technology and the bandwidth just weren't there. I'm looking at the next generation of iPods. Forget iPhones for a moment. It will trickle down to iPhones, as well, and we're talking about 160 GB iPods.

Gardner: The Browser connects through Wi-Fi.

Baer: That is as much as my desktop holds at this point. So, all this stuff is getting miniaturized. At that point, you do get a certain convergence. Of course, these guys are not going to be heavy word-processing users, but they might need to do some texting or very light spread sheeting, and that’s exactly what this is made for. So, no, it's not going to take away the 90 percent-plus market share of Office, but there is certainly a niche out there.

The question is will it be significantly monetized lucrative enough for an organization like Capgemini, because they have very high cost structures. Just as we were talking about before, is SaaS going to be a play that really will contribute significantly to BEA. A lot of this is the economics of how an organization can make money. One other point I want to plug in from before is that I think it makes sense for BEA to sell all these SaaS providers. However, I think the SaaS providers are going to squeeze BEA and say, "Look, we don’t want to pay those upfront cost, we also want to pay per subscriber based on the number of subscribers we sell."

Dana Gardener: What if there is meaningful advertising revenue thrown into the mix? What if Google, through it's interfaces and it's huge lead and dominance of small keyword-based ads juxtaposed to either search or application activities, can change that business model fairly dramatically by making a lot of this stuff free or even subsidized, with the quid pro quo being that a couple of text ads will show up?

Baer: It sounds like a nice idea. For very small companies, it will be fine, but I wonder, when you start getting to a larger company, are they going to want to have ads penetrate through their walled garden.

Gardner: Not to their employees -- to their customers. They can start delivering services out to their customers subsidized by Google, and the quid pro quo is that the end users get a service for very low cost themselves, but they get to look at a couple of contextual ads that actually might relate to what they're doing.

Kobielus: This gives me an opportunity to go back to the radio analogy. It reminds me, Dana, of the approach, where your PBX manufacturer provides music on the hold and gives your vendor the option of piping in some commercial radio station from your area. So, your customers are sitting on hold and listening to the local radio station. Up pops an advertisement or commercial for your competitor.

So, if I am an enterprise, and I'm contracting with Google/Capgemini for this SaaS-based productivity suite provided out to my customers and or my employees, suddenly, my customers are looking at my competitor’s ads. Obviously, if you want to go that route as an enterprise, then you want to say it to Google/Capgemini, "Okay, I’ll take your ads as part of the price, but block my competitors ads and particular companies and particular market places." I'm not talking about porn. If I'm Microsoft, I don’t want to see Oracle’s ads in my environment.

Gardner: It would be very easy for an algorithmic approach to reduce any of that overlap of ads, so that there is no conflict. But, the ads would relate to user activities. It's just like when you go on hold, some companies put in their ad, which says, "Now that we are still listening to elevator music, by the way, we have a discount on three quarters of our catalogue this month and go to www.our-company-best-deals and take advantage of that." So, there is a whole unexplored way of marketing lead generation advertising revenue being driven into a SaaS model. What do you think, Brad?

Shimmin: I agree that Google really shines at stuff like getting out ads. Who knows if that model is going to play out for the consumer or the enterprise, which is what interests me the most. Obviously, that’s not going to fly for them, but what does fly for me, technologically anyway, is the whole human workflow for the information worker.

That's why this is great. Having Capgemini validate what Google is doing is great, because if you're building an enterprise app with workflow that involves instant messaging or some other form of presence communication, or even a live spreadsheet, this is going to cut down on the cost tremendously. It opens up the ability to tie those services into the given out the application that they are building, because as we all know Microsoft is making a lot of strides in tying office apps into it's own .NET and BizTalk and SharePoint services.

Gardner: Like with these "Live" initiatives, right?

Shimmin: Right, but it's not for the J2EE community.

Gardner: The business model becomes more important than the object model.

Shimmin: Exactly.

Kobielus: I see a role for a Google apps or Capgemini-type SaaS service in the area called governance, risk and compliance (GRC). One of the functional components of a full-fledged GRC environment, something called enterprise feedback management (EFM), where the environment regularly surveys all the stakeholders and end users to determine to what extent a given business process is being performed in compliance with various regulations and standards and so forth.

When you're talking about GRC over a distributed supply chain, you have many organizations and personnel not all under single management and not all using the same desktop productivity tools. They may need some common survey feedback and notification mechanism, calendaring environments, and so forth, that they could all share within the context of enterprise feedback management. That’s where an outsourced SaaS service like the Google apps and services might come in quite handy, a common EFM bus and it could span firewalls.

Gardner: Well, we had a far-reaching discussion today, but one of the things I observed is that we are talking about companies that previously would have been odd bedfellows. We are talking about Google and Capgemini, BEA and Adobe, Microsoft and Oracle and yet they are all relating to themselves on a new level, which is around the services delivery, different business models, and more importantly different partnerships and relationships.

So, this is a new era. We talk about SOA a lot, but what’s going to drive this in many respects is this new business approach to delivery of services, monetization of services. and then the underlying infrastructure that supports that. Well, thanks everyone for joining us today. We have been talking about BEA World Conference. This is the week of September 10, 2007 and also the announcement by Capgemini of supporting Google applications this week. Any parting thoughts, let’s start with Tony.

Baer: Basically, I pretty much agree with what we were talking about regarding where we might end up going with the Capgemini and Google Apps. There's a lot of unexplored territory. You mentioned, Dana, about the potential of attaching either advertisements or third-party copy. Well, go into an elevator in a major office building. You are probably already seeing CNN on the screen there. So, think about it as being a precedent.

Gardner: A precursor to what you are going to get through your mobile device or your PC soon.

Baer: Exactly.

Gardner: Jim Kobielus, parting thoughts.

Kobielus: We're already living in ad-glutted world. I think people will gladly pay a premium for an ad-free environment. That’s one of the reasons I think people will still continue to stick with desktop tools like Microsoft Office. It's like, "Wow, good, an ad-free environment that I am paying for and I am going to keep it that way. I'll keep my head clutter down to an absolute minimum."

Gardner: Well, I wouldn’t be surprised if Microsoft starts embedding some ads into it's Live offerings too. Brad Shimmin, parting thoughts.

Shimmin: On the alliances front, any alliance is a good sign, no matter how odd, strange, or otherwise it may be. The fact that we have these strange alliances is a signal to both the maturity of this market that we all talk about all time and also the vibrancy of it. So, I am thrilled that we would have stuff to talk about.

Gardner: Innovative alliances, right?

Shimmin: Yup.

Gardner: Well, great, I want to thank our panel Tony Baer, principal at OnStrategies, Jim Kobielus, principal analyst at Current Analysis and Brad Shimmin, principal analyst at Current Analysis. This is Dana Gardner, principal analyst at Interarbor Solutions, and you have been listening to BriefingsDirect SOA Insights Edition Vol. 25. Thanks, and come back next time.

If any of our listeners are interested in learning more about BriefingsDirect B2B informational podcasts or to become a sponsor of this or other B2B podcasts, please fill free to contact Interarbor Solutions at 603-528-2435.

Transcript of BriefingsDirect SOA Insights Edition podcast, Vol. 25, on industry mergers and acquisitions. Copyright Interarbor Solutions, LLC, 2005-2007. All rights reserved.

Friday, September 07, 2007

BriefingsDirect SOA Insights Analysts on RIAs, Microsoft Silverlight and Enterprise 2.0 Trends

Edited transcript of weekly BriefingsDirect[TM] SOA Insights Edition podcast, recorded May 11, 2007.

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 Interarbor Solutions at 603-528-2435.

Dana Gardner: Hello, and welcome to the latest BriefingsDirect SOA Insights Edition, Vol. 18, a weekly discussion and dissection of Services Oriented Architecture (SOA) related news and events with a panel of industry analysts and guests.

I’m your host and moderator, Dana Gardner, principal analyst at Interarbor Solutions. Our panel this week, and this is the week of
May 7, 2007, consists of Joe McKendrick, an independent research consultant and blogger at ZDNet and ebizQ.

Also joining us is Todd Biske, an enterprise architect at MomentumSI an Austin, Texas-based consultancy.

And joining us also, a return to a BriefingsDirect podcast, Barbara Darrow, an former industry editor at CRN Magazine and newly independent blogger. Welcome, Barb.

Barbara Darrow: Hi, Dana!

Gardner: This week we're going to look, in hindsight, at several trade events that have highlighted the importance, and I suppose the still-maturing technology, around Rich Internet Applications (RIA). The events were last spring's JavaOne show, the mashup-oriented MIX '07, Microsoft-oriented show in Las Vegas the previous week, and also the Web 2.0 Expo, a Web 2.0-oriented show in San Francisco the week previous to that.

One of the things that jumped out at me is how we seem to be moving beyond just the notion of an RIA into specific platforms, and/or approaches for doing this. We now have a slate of new products and approaches from Microsoft around the Silverlight brand. We also have news from Adobe about open-sourcing the Flex toolset that helps create content that’s supported on the ubiquitous Flash seamless download client through browsers. And, we've also seen Sun Microsystems pony up with the JavaFX scripting language, also designed for RIAs.

[Update: Silverlight will be joined by a Linux version, called Moonlight.]

So, I want to go to Joe McKendrick first. Joe, do you agree that these announcements are showing that RIAs are more than a sideline, and are becoming a mainstream way of bringing content, data, and applications to users?

Joe McKendrick: Absolutely. It’s a nice step up from the browser interface that we've all been accustomed to for the past decade now and very competitive with the fat-client concept of Microsoft Windows, which is still Microsoft’s bread and butter. To a large degree, they should feel threatened by this. There are many other threats to their business, but this is their home turf, the client side. When you introduce these capabilities, this ability to enable rich clients coming right off the Web or Web-type interface, it’s definitely that last mile.

Gardner: Microsoft got a lot of credit and high marks, from what I could see in the blogosphere, about their approach. There seems to be less lock-in than in the past, and they even seem to be embracing some community principles that we often associate with open source.

McKendrick: They have to, Dana, they have no choice. Clearly, the market is moving in the direction of networks. I'm going to call it "network-based computing." It’s a term that’s been used for a number of years now, but we're clearly seeing the realization of that vision.

Gardner: Let’s go to Todd Biske. Todd you're an enterprise architect. Does going to RIAs make life easier for you, and do you see any need to continue to maintain a wide variety of client approaches?

Todd Biske: Actually, it's really interesting to see this, because certainly in enterprise circles, it’s much more about AJAX than it necessarily is about Flash. Then, you have Silverlight, and now JavaFX Script, which I think are more in the same category as Adobe Flash, than targeting the
AJAX world. I've yet to see an enterprise application focused on Flash development. It seems to have much more of a place either in content distribution or the general Internet space.

Still, it’s gaining at least mind share, and so we’ll have to see whether this begins to make a push more to the corporate enterprise world.
AJAX has a little bit easier path into that space, given that it works natively with the Web-based technologies that corporate application developers have already been using, such as CSS, HTML, JavaScript and XML.

Overall, I think this is good. I have a strong background in usability and I knew that the pendulum was going to swing back at some point. We went from green screens all the way to these rich desktop environments. Then, we went back to just the HTML forms, and you knew that pendulum was going to start to shift back towards the center again, that users were going to need higher levels of interaction and capabilities on that Web-based platform.

I think this is just indicative of that trend. The bandwidth needs and everything else have caught up to the point where we can start to leverage these technologies. Users are demanding more. They don’t have to deal with the primitive forms, because they have powerful machines and high-speed networks that can now support this much better, even on their mobile phones.

So, it's certainly a trend that I expected. Silverlight is interesting, and you mentioned Microsoft in the general community-based practices. Two or three years ago, I was invited to a Microsoft technology summit, and they collected about 40 of us in
Redmond. It was just a general discussion around some of the things that they were doing, but it was a series of diehard Java advocates, diehard Flash advocates and diehard Linux advocates. It was an interesting exercise just to listen to what they had to say. Microsoft was really trying to hear what would make Microsoft more attractive.

I don’t know whether coming out with a direct competitor to Flash is going to make it any more attractive in the eyes of the Flash developers, but I think certainly playing to their strengths in the existing Microsoft development community, and bringing in some of the best practices of the other development communities, is a smart move on their part. That’s why I think Silverlight will continue to play a role.

Gardner: Let’s go to Barb Darrow. Barb, you were tracking what was going on at the MIX '07 event. Did this, in your mind, shift to a new Microsoft?

Darrow: I tracked it, but from afar. We had another reporter there. The thing I found a little bit interesting about it, first of all, was that Ray Ozzie actually said something. He hasn't been very forthcoming since joining Microsoft, and I guess I can’t blame him for that. So, they laid out this strategy, but being reporters, we always like to handicap things. This whole move to rich clients is interesting. I cover IBM software, and I've got to give them credit. IBM has been talking about this for a while. I want to ask the other panelists here about the trend right now handicap Microsoft versus Google. I would love to get these guys to talk about who among those two players is the leader in this world of a converged client that combines the best of the fat client and best of the web client.

Also, does IBM have any kind of credibility here? There’s this kind of contention between new kids coming up, who are used to downloading everything they want and doing mashups -- they grew up this way -- and then there's this traditional IT environment that constrains from above what you can do. In that spot, IBM has a little bit of credibility. IBM is trying hard to adopt this mashup/social networking thing going forward, but I'm just wondering. Are they a player here? I would love to know what the other panelists think.

Gardner: Let me moderate that a little bit, and I’d like to also agree with Todd about separating the enterprise and the AJAX type of interface, real time updates, data presentation, dashboards, and having more user interactivity playing from the browser. These are all great things, and we have a separate track around the rich content, more movie-type content, and then Flash and animated dynamic activity. I think we should talk at some point about whether these two will come together?

If you go to a lot of consumer-facing portals and insights, you get this rich activity. There are movies galore, and you can cut and paste or mash up these sorts of things. Won’t that start to bleed over into the enterprise, and won’t enterprises want to have flashy, if I could be a punster, presentations and video as well, in order to make for the best interactivity and capture the attention of their users?

But before we go there, let’s address Barb’s point about IBM. We’ve seen Google take great advantage of
AJAX. Its calendar, its Gmail, and more and more of its sites are really poster children for this type of presentation. Microsoft is now stepping up to the plate with both RIA activity and more animation in video, but what about IBM? Let’s go to Joe.

McKendrick: Well, IBM does things in a big way, and I've seen them doing a lot of work in this area, in terms of Wikis and blogging. They're even getting involved in the whole second-life scenario. They have a way of moving into these markets in a very big way, and I don’t see them ignoring the whole Web 2.0. Like everyone else, they're piloting things, seeing how it fits in with the enterprise. Again, it’s hard to express. The enterprise is a different scenario from the market at large, but things that go on in the market at large tend to eventually seep into the enterprise, often from the bottom up, as new ways to squeeze productivity from these approaches comes to the fore.

Gardner: In a sense, IBM was ahead of the curve on this, as Barb mentioned, with their workplace approach. They were creating the equivalent of client middleware -- or "upperware," as I like to refer to it -- sending event-driven and message-driven activities to the client, and that client could be universal, could accept different types of across-the-wire protocols and formats. But that really didn’t work out so well. It didn’t become ubiquitous, and, I suppose, part of the reason that was the rich-client platform that Eclipse Foundation runs, which usurped that, and is being used for these sorts of activities by developers. Instead, IBM took this technology and has now dumped it mostly into the Lotus brand of products. I believe they're calling it Lotus Connections, and they highlighted a lot of that at Lotusphere, which wasn’t that long ago, back in the winter.

So, let’s go to you Todd Biske. As an enterprise architect, do you sense that IBM is in a leadership position or have they recognized that they only have a lot of client interactivity through their Lotus products. And, does it matter to you whether they are considered in the vanguard of these tooling environments for RIAs and animation of video?

Biske: IBM probably needs to have some activity in this place soon, because, on one hand, we can look at Microsoft and Google, and they are both application providers outside of the Lotus space. IBM is not an application provider in the same sense. So, some of the things that you see Microsoft doing with Microsoft Live and the Google applications, I wouldn’t expect to see any big push from IBM. But, then if I talk about the pure development technology side of it, all the platforms that were announced with the exception of JavaX are really proprietary to the vendors that are supporting that.

So you have to look into the
AJAX space, and here’s where you could say that IBM is maybe a little bit behind the curve. TIBCO had their general interface acquisition, so they've got AJAX development tools. I don’t know that I've heard anything from IBM, specifically in the AJAX or RIA space, saying, "Here’s our set of development tools to support you building solutions, whether it’s for the enterprise or for the general Web 2.0 community at large." So, there’s a potential gap there that they could push into, and we'll just have to wait and see it.

Gardner: Well, TIBCO had an announcement at JavaOne, highlighting their TIBCO AJAX Message Service Version 1.0, which is really about live data and events from the server right to the Web page in AJAX Applications. This is really creating an end-to-end messaging environment for complex activities and mission-critical activities. We've seen that messaging, queuing and lining up activities, and then having them fire off in the right order is an important technology. It’s worked very well on the server side, and we're going to have to wonder if all of these calls going out to these AJAX pages are going to work in high scale at high complexity.

So, given that this is an end-to-end in messaging, and seeing how prominent IBM has been in messaging with its MQSeries -- a very popular product for long time now -- they might be missing the boat in that they are so involved with SOA. Perhaps there is an acquisition or an internal activity within IBM that we have yet to get some wind of. What do you think, Barb?

Darrow: How many companies has IBM software acquired in the last three years? It's definitely north of 20.

Gardner: Not a lot having to do with either the client or tools though.

Darrow: That’s definitely on the table, and who knows who might be on the list. The thing about IBM is that it's strong and a very big environment, and they are trying to push much more into mid-market companies with their whole Express branding strategy. Frankly, I'm not so sure how well they're doing there, and that’s where other platform providers can really make hay. In terms of an acquisition, I wouldn’t rule out anything for those guys.

Gardner: Of course, another big push for IBM these days is moving into the small- and medium-size businesses base.

Darrow: Right, and those are where the Express lineup is. I do know that a lot of their Express offerings are not resonating that well with the companies they are targeting.

Gardner: Now, let’s go back to Sun Microsystems. They had their day in the sun, at the JavaOne show. A lot of the journalists and analysts that I spoke to there were a little bit disappointed that the Sun didn’t have a lot more to say other than, “Yeah, we finished open-sourcing Java.” They were perhaps a little bit late to the table on that, and then had this JavaFX scripting language. People were saying “What? Another scripting language?” Sure, it runs on SE, and it’s apparently quite fast, but hasn’t the train left the station on scripting languages? Aren’t people looking for more of the frameworks and integration across what's already available? I'll throw that out to you, Todd.

Biske: I would agree. My reaction was little bit of a "ho hum." They’ve got a huge curve to overcome here. You've had these scripting languages out there for a long time, establishing significant presence. Sun is not Microsoft, and can’t really push something down to this huge developer community that’s completely dedicated to just using their technology. So, I'm not expecting great things as a result of the JavaFX announcement. I'm not surprised by it, but it’ll just be another player in the mix of things.

Gardner: It seems that Sun is still trying to figure out a way to create a business benefit from having all those Java runtime clients floating around. Does this strike you as something that’s going to be able to bring them more revenue on their server and infrastructure side?

Biske: No. I don’t think it’s going to make a big difference in that regard. Again, there are some struggles on the Java side. And, just given that it’s going open source -- which, again, I view as a good thing -- the market is established. I don't think the server decisions that companies are making are based upon the Java support behind it. They know they can get Java support on any of the platforms, and they want to choose. It’s not necessarily going to perform any better running on the Sun hardware than HP, Dell, or whoever else they want to pick as their strategic provider on these things.

Darrow: Dana, can I just ask a quick question here?

Gardner: Certainly.

Darrow: How much difference do you think it would have made if the open-source Java thing had happened two or three years ago?

Gardner: Oh, it would have made a big difference. Another thing that struck me at JavaOne this year was the dearth of announcements from other major Java-oriented vendors, and I'm thinking of IBM, BEA, and Oracle. It was really a silence, and what I think has happened is that Sun waited for so long to declare its intention for Java, and then to open-source it under GPL Version 2, that they lost the community. Now, the community is off doing things under Eclipse, Apache, Source Board, OSSI, or whatever. So, the momentum of the community and the ecology for Java was lost, as Sun basically sat on the fence, trying to figure out how to make more money from Java. I don’t think it’s something they're going to recover from.

Biske: Was that really a problem with not being open source, or was that really an issue with the whole Java community process?

Gardner: I'd say they are related. If they had not had such oversight power over the JCP, and they brought it out to something like Eclipse or Apache, or even some of the other standards bodies that they had talked about, significantly earlier, then Sun would be just another participant rather than the taskmaster. So, I think they're related.

McKendrick: And has this role changed for Sun with the open-sourcing of Java? How far back has Sun stepped from the process, from being the taskmaster?

Gardner: Well, the JCP is still there, and so for what they call the JSRs, new projects within Java, I still think they have that same oversight, and the actual code and licensing of the Java technology -- the runtime, the implementation, the reference platforms -- are now under a GPL 2. So, it’s gone a great deal of the way on the runtime, but the new community development is still within the JCP which politically is largely influenced by Sun.

Biske: This comes back to the whole notion of the client side of this. Will Java, as a development platform, have a role in the development of the client side? It’s well established on the server side, and that’s not going to change any time soon, but what is the future of the client platform, and will it be a case of these RIAs coming down into the enterprise?

Or, will we continue to see a separation of "Here are things down in the content-heavy world of the Internet" and "Here is the corporate world?" Even in the corporate world, either you’re building Microsoft applications, because that’s what’s on everybody’s desktop, or you're building Web-based applications. More and more of the presentation technologies are going towards AJAX, rather than anything you're doing in Java JSP.

Gardner: That raises that earlier question I had. As I look at the younger generation, my kids are really into games, and they have a certain expectation on interface and interactivity. We look at the client, and we have some of these technologies where we can stream and download large files with ease. If it works in the consumer space, it certainly should work in the enterprise space.

Are we going to see, in essence, more mashups that lead to more animation, more convergence, and, hypothetically, are we going to start seeing SAP R3 applications that look more like Nickelodeon Saturday morning cartoons? What do you think Joe? I think Jimmy Neutron would make an excellent CIO, by the way.

McKendrick: Well, I have an eight-year-old daughter. She plays computer games, and do you know how those computer games are delivered? They are delivered through a fast software-as-a-service model. I don’t think she even knows was a CD is. She doesn’t use a CD to load her games, and that’s what the younger generation that’s percolating up toward our workforce is now looking at. They expect their software, their solutions to be delivered fast over the network. This is part and parcel of the animation, the graphics, the exciting video. It’s part of their world, and they are going to expect it.

Darrow: I agree. It’s going to be like a battle of the bands. These young kids coming up through college are used to being able to download whatever they want. They’ve got broadband everywhere. These enterprise software companies are going to have to face that, because these are the people who are going to be running these systems going forward. It’s going to be a really interesting scenario.

McKendrick: Yeah, if we have a bunch of 20-somethings come to work for us, and they see 3270 green screens they have to work on, tabbing to between the fields, they are not going to stay with your company long.

Gardner: Can I throw just one countervailing perspective? If you look at Google, which is all software as a service, they have extremely sparse, almost Draconian, interfaces. How do these two coincide, this demand for rich animation and yet Google’s success with very Spartan interfaces?

Biske: I'm going to side with you on this one, too Dana, and take a contrarian view. Having done a lot of work in human-computer interaction space and user-centered design, there is a difference between what I want versus what I need. Ultimately, in the enterprise world, it's about efficiency and it's going to be about how quickly I can get the business processes done that I need to. If we look at how companies are starting to leverage some of the work flow on BPM systems, I see it going towards more minimalist interfaces, not necessarily in the technologies involved, but I want something very lightweight that’s specific to the task I need to get done.

This is where the gadget and widget technology, and either the Mac OS Dashboard or the Vista Sidebar, actually may start to play a role in the enterprise. You’ve got these very targeted interfaces for a specific task, and it’s not just saying, "I’ve just got a bunch of data fields on there and it’s the Web-based version of a green screen." They're leveraging dynamic HTML and JavaScript in
AJAX, but they go directly to the task that you need done. They’re there. They pop up with a key press. You do what you need to do, and the task is completed. That goes into your workflow system, gets routed to the next person down the chain, and again you’ve made it as efficient as possible. You’re not waiting for this big, bloated thing to come up or to go out to the Web, and you've still got to navigate through all of the Web-based forms to get to that particular task that you need to do.

While all of the media content and everything is nice, you have to look at them and ask, "What’s the applicability of all of those capabilities to corporate enterprise problems? How do I leverage a video in executing the business processes that I have to execute?"

It’s not to say that there aren’t any scenarios for that, but I don’t see it as something very applicable today. And, there is a real risk that you could have this 20-something crowd come in and, like any technologist, it’s the shiny new thing, and they are not thinking about how this is really benefiting the company. Is it making things any better for the business problems that I have to solve? And, if it's not why are we investing so much energy in trying to find a way? It’s a solution looking for a problem, and not vice-versa.

Gardner: Maybe there's a third way on this, and that would be that you go for the minimalist, when you are dealing with data, transactions, and workflow issues, but there is a whole other side of enterprise productivity around collaboration, learning, discovery, and knowledge transfer. These videos and rich media, be it text, audio, or video, whichever you choose, or all three, could be very powerful. We could see instances where we are going to get both. We are going to get a lot of minimalist widgets, but we’ll also get lots of rich, movie-grade video, when it comes to the other side of the equation, which is not dealing with machines and data, but dealing with people.

Darrow: I don’t even know what the term is. I think we’re beyond Gen-Y'ers -- right? I think of kids coming out of college, and when I say that they’re going to demand changes, it’s not necessarily that I think that they are going to want video, although I think they will. The issue is that they want to be able to download what they need to do whenever they want it, and they are going to bump up against this IT constraint.

There was a really good panel discussion on this a couple of years ago at Lotusphere. This is when Ray Ozzie made his triumphant reappearance at Lotusphere, before Microsoft brought Groove. He talked about this duality, and he cited some research about how many young IT workers bring their own laptops into the office, so they can use the tools they were used to, rather than the company-mandated tools.

Even when it just comes to looking stuff up on the Web, kids are used to finding information where they want to and they are not used to going through corporate routes for this. I think what you are saying about a dual mode is right. In terms of the spare interface versus video, there are places for both, and there are productivity places for both.

Gardner: A lot of kids that I see these days, are really into SMS texting on their mobiles. That’s about as sparse an interface as you could possibly get, and they love that. It’s very popular. They also like full, rich media, and so they want the best of all. They want it their way, and they want the best of everything. It’s not either-or; it’s "all of the above."

Darrow: Like the appliance mode that we were talking about before, where you are only exposed to the processes you need to do your job, versus all those layers of information. You don’t need that. That’s totally applicable. The key here is that kids are used to getting what they want when they want it, and they are going to bump up against IT constraints.

Gardner: So, a company like Google will be able to give them what they want the way they want it. And, Yahoo, Microsoft, and Salesforce.com could offer a lot more richness or the ability to mash up more rich media and communications, as they wish, into their business applications. But that brings us back to IBM, HP, and Oracle, the big older-line enterprise-focused vendors. What’s going to be their story? Are they just going to let Yahoo, Microsoft, and Google fill this role that could erode their total value over time? What do you think Todd?

Biske: I think you're absolutely right on the whole dual-mode thing. The wheels are turning in my head here thinking of what the model of the infrastructure provider to the enterprise needs to be. This is really an interesting discussion with me working as a consultant now, because I have the situation where I've got my own laptop that I am running everything on, and I need to go into clients. Probably 10 years ago, you’d have to wait to get access to their LAN, and you'd have to use their machines. Today, that’s not the case. I can do all my work without necessarily having to go on my client’s network at all.

Gardner: Are you using an EVDO card or some wireless technology?

Biske: I’ve got a Sprint USB modem that I leveraged to be able to be connected wherever I am. Just as another example, I have been doing some SOA strategy development. Obviously, the artifact on a lot of that is a bunch of PowerPoint.

Now, we’re going around doing a road show to various people presenting this. I talked with the guy I am working for and said, “Are you okay with me just going and recording this as a podcast and making it available for people to download and listen to it on demand, because we’re just going around saying the same thing again and again and again and again? It would save a lot of wear and tear on our voices, if we could just record it and make it available on demand."

Do companies need an internal podcast infrastructure or even blogging in the enterprise? I continually reference my blog in my consulting work and say “You know what? I've thought about this before. Go, look at this blog entry and you can see my thoughts on it." It’s very transparent. It saves me having to reproduce all of that work every time. The same thing certainly holds true in a corporate infrastructure. The knowledge exists but nobody knows where to find it.

So, do we need to see the IBMs and the other big infrastructure player now not just providing an application server, but a full internal communications infrastructure, including support for the distribution of podcasts and blogging networks? How does all of that integrate in with your identity management system? In the enterprise world, you’re probably still going to need to have some degree of world-based access control on some of these things, and different levels of privacy on the information. They may have to bleed more into that application-provider role, rather than the pure infrastructure side of it.

Gardner: Yeah, I agree with that. I think we’re going to start to see the emergence of what we could call the Chief Content Officer in a company. Their job is going to be to allow for additional modalities of distribution, whether we’re taking advantage of blogs, Wikis, and RSS, or whether you’re just creating videos from PowerPoint slides or rich-media animations and graphics.

I think that’s absolutely a role, but these large enterprise vendors have already done the heavy lifting, when it comes to knowledge management, document management, and the integration of formats. It’s really just a matter of bolting on a front end, and that probably could be a Flash via the Flex approach. Wouldn’t that be part of the thinking that Adobe had by making Flex go open source? Why have all these vendors go and reinvent this? Why not just use ours, and we’ll let you open source it so you can adjust it to your needs and environment?

McKendrick: Tom Davenport recently came out with a blog and an article in Harvard Business Review, in which he looked at this phenomenon occurring within enterprises -- the
Enterprise 2.0 phenomenon, or we call Web 2.0. He feels that this stuff is important, but it’s not the next big thing. It's the next little thing.

It’s not really making a huge dent in the overall course of the market, the billions and billions of dollars that are being spent on IT infrastructure, for example. These are all nice things that are out there, but they are not -- at least in Tom Davenport’s view -- the revolution that’s overtaking the IT world. Most companies, most enterprises are still worried about maintenance issues. They are worried about the server, server farms, network, and bandwidth -- the fundamental nuts and bolts.

Gardner: Well, yeah, but to Todd’s point. If young 20-somethings come into the company, and they liked the idea of creating a podcast and distributing e-learning that way, rather than having to talk the same PowerPoint presentation over and over again, they’re going to probably do it. They’ll do it off the grid from the enterprise and then put up on YouTube and say, "Here’s the URL. Here’s the presentation. Go take a look at it."

McKendrick: I like Todd’s point, and, in fact, I have heard the term "personal outsourcing" applied. The resource I first heard this from was John Schmidt over at the Integration Consortium. With personal outsourcing, an employee or a worker no longer goes down the hall to another worker to get an answer to a question or picks up the phone. Now, they go to the entire global community through blogs or Wikis.

Gardner: Through a search, right?

McKendrick: They start with a search. It’s the same way in my own work, and I am sure yours as well. You go out to the entire world now seeking collaboration, seeking answers to your questions, seeking additional knowledge.

Gardner: What do you think, Barb? You’re pretty close to what enterprises and also the channels are doing practically. Do you see this as the next little thing or is there more to it?

Darrow: A lot of the VARs and systems integrators I talked to are sorting this out as well. This is the next big battlefield. You've got to incorporate all the stuff, but you've got to have controls. I don’t know; it’s the million-dollar question. The Flex move on Adobe’s part is brilliant, because if you look at the broad scheme of things out there in terms of toe-holds on people’s computers, the only company that has as big a toe-hold on most computers as Microsoft is Adobe, because of the PDF reader and the Flash reader. It’s brilliant.

I think that's a really good story going forward -- how is the latest Adobe-versus-Microsoft battle going to shake out here. Again, I’m being a reporter. We love battle stories. We are so knee-jerk that way. But, Adobe was incredibly smart here, and their partners and their systems integrators have to sort this out. I would love to hear what the other guys think about this.

Gardner: From my personal experience of moving from podcast production -- one of which we are listening to now -- to video, I have had to look at various approaches. There are some great tools out there for going to QuickTime. You can really compress the files, and there are some great tools. Final Cut Pro is an excellent tool. On the other hand, I have to worry about the other readers, the other media players, and by going to Flash, I don’t have to worry about that at all. So, I am very quickly moving all of my rich media production over to Flash and buying the Adobe tools as needed, hoping that open-sourcing of Flex means that this will be something that will enter more ISVs, enterprises, software-as-a-service providers. As an independent producer, it is pretty much a no-brainer for me. I don’t even need to consider Silverlight, because Flash does everything I need.

Darrow: Right. You've got a bigger universe out there to attack.

Gardner: All I have to do is create the content. If I can make it rich on one hand, but also make it compressed, so that it can be used in these RSS feeds and networks, then my job’s done technically. Then, I just have to focus on the content.

Darrow: Were any of the panelists at MIX '07? I was just curious about what percentage of the audience there was from the Adobe world. I'm sure it was fairly large, but I don’t know.

Gardner: You've nailed something here. It is a new battleground, and it affects not just media and content, it affects RIAs, SOA, and mashups. It affects how companies like Amazon, Google, Yahoo, etc., will be monetizing. And, it certainly affects how Microsoft is going to be facing pressures as a transition from its older business models to new ones.

Darrow: Dana, you had a blog about a month ago about the development environments that Amazon and eBay were using. I'm curious whether there is going to be broader applicability for those guys going forward. Any thoughts on that?

Gardner: That was one of my major takeaways from the Web 2.0 Expo, which I did attend. We are in the era of very fertile development and entrepreneurial opportunities. On one hand, we've got more and more people that are able to play the role of developer, have a say in how applications behave, are more able to take their views as entrepreneurs or line of business people, and get what they want for productivity instantiated in some kind of a computing environment.

So, on one hand, we have an expansion of the people who can take part in development. At the same time, we're seeing a compression in the cost, in the risk, and in the time, for going from concept to full production. We're seeing things like the Amazon EC2 and S3 and the Bungee Labs Connect announcement. Then, there are others like One Page, a Chicago company that barely just gives a business user a list of dropdown menus, tailors them each time there is a response as part of their application development process, and then being able to just push a button and it’s "Wow!" It’s in full production. Bungee is also offering debug and test as a service.

So, it's really compression. You can go and literarily, in a matter of hours, take a simple application from concept to full production. That can scale to millions of potential users within days, if need be, as these Amazon Elastic Cloud approaches provision servers based on demand. Then, the developer, the entrepreneur can then pay for that hosting based on the demand, which means they should be getting revenue and profits that are commensurate with the cost of production.

It's a very interesting period with software as a service and mashups. As more entrepreneurs go in this direction, enterprises are going to need to follow. They're going to just say, "Wow, we can get this done faster, better, cheaper by going around our IT department -- not that we don’t love them and we don’t continue to support them -- but when it comes to widgets, gadgets, mashups, and quick ways of going out to market, and testing something to see if it works are not, let’s just go through this new opportunity." Any other thoughts on that?

Darrow: I'm just curious what the long-term strategy is for a company like that, for Bungee Lab. Is that basically existing just to get bought up by someone else, or do you think they are in it for the long haul?

Gardner: There are a number of different options for their future, but if they can demonstrate an ongoing recurring subscription revenue based on this ecology approach, the quid pro quo is "We give you the free development, the free debug, and then the hosting on a pay-per-drink basis, and you have to keep your application within our hosting environment." If they are like a canary in a coalmine, if they prove that model, then other companies will race to it as well, and we could see a whole wave towards consolidation.

So, they could go in a number of directions. They could continue to make a good living on their own, they could become part of a larger Elastic Cloud approach -- that is to say a service or development as a service that you drop into a larger hosting and services deployment environment -- or some other mashup with another company that provides some other levels of service. But if they can prove the concept of developing deployment as a service on a pay-per-drink basis, that’s going to be very meaningful.

McKendrick: Let me throw a curve into this as well, it will be interesting to see the impact that has on development outsourcing, which has been the preferred way among enterprises in terms of cost cutting.

Gardner: You’re right. The way they have cut cost is to go offshore, break up development projects into small components, have them developed separately, and then reassemble them. If you can do a large portion of that off the wire, and then pay only after it goes into production, you're right, that could be really impactful on the offshoring business.

McKendrick: The new company is also based offshore that provides the offside hosting.

Biske: If you look at it, there are certainly increasing trends that companies more can purchase what they need, rather than having to do custom development. So, is the model the long tail, where we just outsource all of the development, throw it out there for the community to develop some of the niche products, outsource more of the vertical applications, and use the Internet to say, "Hey, I've got a big, broad distribution channel." Whether it's somebody writing applications to run a dental office, or niche markets like that, you can just go out and get it and have a model that you can developer and have a bunch of these little niche things sitting in your office at home.

Gardner: That’s a good note to wrap things up. I appreciate your listening for these 45 minutes.

McKendrick: Dana, I just want to add one note. I don’t think anybody mentioned the term SOA once this entire podcast.

Gardner: No, but it has been lurking in the background.

McKendrick: Perhaps there is this convergence taking place between Web 2.0 and SOA.

Gardner: Certainly the whole client issue hasn't gone away, and it is still working itself out, but it is going to have a great bearing on how you then go back and design, aggregate, and composite your services, right?

McKendrick: Exactly.

Gardner: Okay, well thanks very much to our panel. We’ve had Joe McKendrick, Todd Biske and Barb Darrow joining us here, and I just want to say thanks for listening. I am your producer and moderator Dana Gardner, Principal Analyst at InterArbor Solutions. Come again and listen to our next BriefingsDirect SOA Insights Edition. Thanks, everyone.


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Transcript of BriefingsDirect SOA Insights Edition podcast, Vol. 18, on RIAs and Enterprise 2.0 trends. Copyright Interarbor Solutions, LLC, 2005-2007. All rights reserved.