BriefingsDirect Analysts Discuss Service Oriented Communications, Debate How Dead SOA Really Is

Edited transcript of BriefingsDirect Analyst Insights Edition podcast, Vol. 36, on communications as a service and the future of SOA in light of hard economic times.

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Dana Gardner: Hello, and welcome to the latest BriefingsDirect Analyst Insights Edition, Volume 36. This periodic discussion and dissection of IT, infrastructure related news event with a panel of industry analysts and guests comes to you with the help of our charter sponsor Active Endpoints, maker of the Active VOS visual orchestration system, as well as through the support of TIBCO Software.

I'm your host and moderator, Dana Gardner, principal analyst at Interarbor Solutions. Our topic this week, the week of Jan. 12, 2009, starts and ends with service-oriented architecture (SOA) -- dead or alive?

We're going to begin with an example of what keeps SOA alive and vibrant, and that is the ability for the architectural approach to grow inclusive of service types and therefore grow more valuable over time.

We're going to examine service-oriented communications (SOC) a variation on the SOA theme, and a way of ushering a wider variety of services -- in this case communications and collaboration services from the network -- into business processes and consumer-facing solutions. We're joined by a thought leader on SOC, Todd Landry, the vice president of NEC Sphere.

In the second half of our show, we'll revisit the purported demise of large-scale SOA and find where the wellsprings of enterprise architectural innovation and productivity will eventually come from.

We’ll also delve into the psychology of IT. What are they thinking in the enterprise data centers these days? Somebody’s thoughts might resuscitate SOA or perhaps nail even more spikes into the SOA coffin.

Here to help us calibrate the life span of SOA is this week’s BriefingsDirect Analyst Insights Panel. Please welcome Tony Baer, senior analyst at Ovum. Hey, Tony.

Tony Baer: Hey, Dana how are you doing? I hope you're keeping warm up there.

Gardner: Oh yes. Jim Kobielus, senior analyst at Forrester Research. How are you, Jim?

Jim Kobielus: Hi, Dana. Hi, everybody.

Gardner: Joe McKendrick, independent analyst and prolific blogger on ZDNet and ebizQ. Hey, Joe.

Joe McKendrick: Hey, Dana. Great to be here.

Gardner: Dave Linthicum, founder of Linthicum Group and Blue Mountain Labs.

Dave Linthicum: Hey, Dana.

Gardner: JP Morgenthal, senior analyst at Burton Group.

JP Morgenthal: Good morning.

Gardner: And, Anne Thomas Manes, vice president and research director for application platform strategies at Burton Group. Welcome to the show, Anne.

Anne Thomas Manes: Thanks, Dana.

Gardner: As I mentioned, we’re welcoming our guest Todd Landry, vice president of NEC Sphere. Let’s go to you first, Todd. First of all, welcome to the show.

Todd Landry: Good morning, Dana. We’re joining you today from sunny Chicago, where it started out at minus 17 degrees.

Gardner: Many of us are at or under zero this morning.

Landry: We're looking forward to the balmy weather.

Gardner: I hope you get to move south soon. First, tell us what you mean by SOC and help our listeners, who might not be familiar, understand a little bit about NEC, which is based in Tokyo, and Sphere in particular within that larger organization.

Variety of Applications

Landry: Sounds great, Dana. With SOC, what we're really talking about here is the fact that organizations today use a variety of business applications to help them improve efficiency and drive productivity in their organizations.

But, if you look at any implementation and then what happens in the business, the real connective tissue between all of these includes people. The decisions and actions that take place in a business on a day-to-day basis are highly dependent on these people being effective.

Therefore, the manner in which we can help them with their communications and help them collaborate becomes a critical factor in how the workflows can be more effective and more efficient. We've looked at that and said the more you can make communications into business applications, the more you can make communications a more natural part of an SOA.

The workflow can naturally connect people, when they become part of that workflow process. It should streamline how those processes can be completed, and therefore the result is streamlining how businesses can be effective.

Gardner: Well, exactly what types of services are we talking about here? Is this simply mashing up instant messaging into some more applications? Is it more than that? What’s the scale that we are talking about?

Landry: The idea of being able to click-to-call has been around for quite some time. With the more recent technologies mashing up the directory listings, mashing up a call function inside of a business application, is much more achievable and can be done much easier manner than it has in the past.

Now, that said, we can go to the next step and to give you examples. In one view, we are reaching a human for an approval on a transaction. It can be instigated from the business application itself. So, notifications reaching out to individuals to get approvals, using voice technology for actual voice imprint signatures, is one method.

Another example of use is digital assets of the corporation. As we are all aware there are times when we unfortunately have to have organizations come in and collect a lot of emails and history to help the organization. As part of that, organizations are now looking at dialogues between humans, whether they were voice, text tool, conference calls, or exchanges via email. They become part of the digital assets of the corporation.

When we look at communications wrapping those dialogues with some metadata, bringing them back up into content management system so they become indexable, they may become part of the digital assets of the corporation and become uniquely valuable.

Gardner: Just quickly tell us about Sphere. You were acquired by NEC just a year or two ago, right?

Landry: That’s correct, Dana. Sphere Communications was founded in 1994 with a focus on a mission of turning communications hardware into software and, as a result of turning it into software, building it more like a business application.

About 18 months ago, we concluded a transaction with NEC Corp., headquartered in Tokyo. Our focus stays on the software aspect of building communications for the business environment, but we do that now in the context of a much larger organization.

Gardner: With this philosophy of converting the hardware to software as software services, these communications functions can now be brought into a wider variety of business processes, particularly if you're using SOA, mashups, or a variety of different development frameworks and types. The goal here is to bring people into process. Is that fair?

The SOC Ultimate Goal

Landry: That’s really the ultimate goal. On any given day in a business, do people care about doing the mashup or do they care about having their business be more effective, especially in these times? We believe that people will continue to look for more efficiency in their IT infrastructure. They'll continue to look for how people can be more connected, not only internally but with their customers. At the end of the day, you're right. It’s really about how people get more interconnected with the business process.

Gardner: How about this taxonomy? Why do we have to have another acronym, another three letter word, SOC? Wouldn’t this simply be part and parcel with SOA? Why do you see them as different?

Landry: Well, if there isn’t one born, and then it won’t ever die, right? We looked at it and had to communicate to the industry the concept of how communications integrates into frameworks in the IT infrastructure. SOA is a one term still used out there to define an approach. When we built our communications platform, we opened up all its services in a manner that we believe fit very naturally into the concept of a SOA. Therefore, our communications platform is really more service oriented than it is a closed and proprietary traditional PBX-oriented system.

Gardner: Lets go to our panel. Tony Baer, we've talked about this disconnect between processes and the business world, SOA architectural values, and people. I think we had a show devoted almost entirely to the BPEL for People spec when it came out.

Clearly, if SOA is not to wither and die on the vine, bringing people into the process, finding ways of creating new types of efficiencies and innovations, not just repaving cow paths but doing something quite new all becomes important. From your perspective, Tony, what’s the important deal here with bringing communications services into the play?

Baer: I hate to use a cliché, but it’s like the last mile of enterprise workflow and enterprise processes. The whole goal of workflows was trying to codify what we do with processes and trying to implement our best practices consistently. Yet, when it comes to verbal communications, we’re still basically using technology that began with the dawn of the human voice eons ago.

Gardner: I've seen people use sign language.

Baer: Well, that maybe too, and smoke signals.

Gardner: A certain finger comes up from time to time in some IT departments.

Kobielus: At least the use of a trusty index DTMS finger.

Gardner: There you go.

Baer: Exactly, and maybe some other fingers as well. But the fact is that in some cases, there's a huge gap. An example is in the area of compliance. It was a well-publicized case. I won't mention the name of the corporation, because I don’t want to get us into legal trouble here. But, there was a major case of cooking the books. The CEO went to jail, but his predecessor, under whom it was alleged these practices began, was never touched. Allegedly, it’s because he left no trail of breadcrumbs. He never used email. It was all spoken.

The idea of being able to manage and integrate spoken communications may actually be a critical gap in compliance strategy. I could see that as being an incredible justification for trying to integrate voice communications. Another instance would be with any type of real-time supply chain or with trading.

Very often, when I call my broker, the message says please do not leave voice messages on the phone. Provide trading instructions. We can now start to track all that. I'm not sure that it’s such a great idea to leave trading instructions in a voice mail, but there are lot of areas where you're integrating voice communications that could provide business value.

Gardner: Jim Kobielus, isn’t there more to this on the consumer side as well? We've got these hand-held devices that people are using more and more with full broadband connectivity for more types of activities, straddling their personal and business lives and activities. We know Microsoft has been talking about voice recognition as a new interface goal for, what, 10 years now. What’s the deal when it comes to user habits, interfaces, and having some input into these back-end processes?

An Important Extension

Kobielus: That’s a huge question. Let me just unpeel the onion here. I see SOC as very much an important extension of SOA or an application of SOA, where the service that you're trying to maximize, share, and use is the intelligence that’s in people’s heads -- the people in the organization, in your team. You have various ways in which you can get access to that knowledge and intelligence, one of which is by tapping into a common social networking environment.

In a consumer sphere, the thing is the intelligence you want to gain access to is intelligence sets residing in mobile assets -- human beings on the run. Human beings have various devices and applications through which they can get access to all manner of content and through which they can get access to each other.

So, in a consumer world, a lot of the SOC value proposition is in how it supports social networking. The Facebook environments provide an ever more service-oriented environment within which people can mash up not only their presence and profiles, but all of the content the human beings generate on the fly. Possibly, they can tag on the fly as well, and that might be relevant to other people.

There is a strong potential for SOC and that consumer Facebook-style paradigm of sharing everybody’s user-generated content that’s developed on the fly.

Gardner: Joe McKendrick, it seems that bringing communications into the stew really does add value. These are the areas that traditionally have been separate. People did voice activities, they did communications, and they also did data and application activities. Straddling the two was something you did with wetware, with your mind or your hands. Do you think that SOC is perhaps a catalyst to increase value in SOA?

McKendrick: Absolutely. There always have been two levels to this discussion. On the upper level, you’re looking at a lot of business traditionally driven by serendipity. That's the chance encounter in the hallway between two people. Or, it's a phone discussion that may evolve to, "By the way, did you hear about such and such a company laying off or such and such company moving to this market."

One challenge that’s always been out there is to figure out a way to capture this more informal transmission of knowledge that highlights business opportunities. If there's a way to at least capture even a segment of that, to digitize it, and put it into the knowledge base. I think that’s a great advance for companies.

Gardner: So it’s bringing tacit knowledge into play with business processes. Is that what you’re getting that?

McKendrick: Exactly. We heard a lot about artificial intelligence (AI) a couple of decades back, and that showed a lot of promise for capturing some of the knowledge. You had these Jedi Knights that seemed to know everything and had everything in their heads. Once they left the organization, that was it. They walked out of the door with the knowledge and moved to Florida or Arizona. That has been the challenge for AI. Now we refer to it as knowledge management, being able to capture this knowledge, this serendipity, and these informal channels the voice communications.

Landry: It’s human nature to use reference points, historical reference points of dialogs -- whether they’re written or wherever I find them -- to remind me of a topical discussion and bring me tighter into the fold of a particular thread. Think of how we use email. Often, there's a thread of email that helps us go back and look at the history of the dialog that occurred. This has happened in pseudo real time basis with instant messaging these days.

As you described, the natural tendency is a quick discussion at the water cooler. To the degree that we can capture that information, put it in a format that’s indexable, and in my day-to-day workflows as an individual be able to pull that up as I am having more and more dialogs, it becomes very useful referenceable information about why we made certain decisions in the business. That’s one aspect we look at there.

Text-Mining Capability

Kobielus: One of the services in the infrastructure of the SOC that will be critically needed in a consumer or a business environment is a text-mining capability within the cloud. That can go on the fly to all these unstructured texts that have been generated, and identify entities in relationships and sentiments to make that information quickly available. Or, it can make those relationships quickly available through search or through other means to people who are too busy to do a formal search or who are too busy to even do any manual tagging. We simply want the basic meanings to just bubble up out of the cloud.

Gardner: Dave Linthicum, it seems like we're just finding ways of joining different networks. There were the telephone networks. We have had IM networks that are still based on Internet protocols, but are doing their own thing. We've had all these disparate communications types and modes that have popped up over the years and now we are trying to bring them to some kind of harmony.

Do you agree that this is really what SOA, as an approach, should do, and that we don’t need a subset of SOC? And, what are your clients looking for in terms of how communications relates to business applications and processes?

Linthicum: Well, if you're going to take services like this, expose them as services, and make easier use of them, then it’s there. You have to create the integration yourself through very disparate mechanisms and things like that. People are always struggling, trying to figure how to aggregate this stuff and its solutions. This is definitely one approach and it’s viable on the market.

As SOA evolves, they are much more rudimentary. We'll talk about later about the whole "death of SOA" thing. The fact of the matter is that people are just getting their arms around exactly what a service is and how you take multiple services and turn them in solutions.

What's occurring, especially with the downturn in the economy, is that people are focused on more tactical and, what I call a shorter, SOA issues. They're trying to solve particular problems with particular instances of technology. Some organizations have the potential for doing that.

When you look at SOA, you talk about this whole big strategy around structuring services and aggregating those services into solutions. But, if you really look at what people want to do, they want to solve particular tactical problems in a very short period of time and show a very quick value proposition. The ability to take all these communications and actually turn them into services and leverage them is a wonderful use case within the context of SOA. It makes sense.

Gardner: Todd Landry, even though we're in such tight economic circumstances, cost savings obviously need to be part of just about any activity. Is there a clear return on investment (ROI) from your perspective in doing away with the hardware and the PBX-based infrastructure around telecom at least inside of enterprises and going to pure software?

Are you able to really demonstrate that going to software, not only for the purposes of extending it into business processes but just alone as replacement for the cost of a traditional PBX infrastructure, is a good story?

The Two Levels

Landry: There is, and there are two levels. I can put some examples around that. At the first level, remember the three large guys with tool belts who show up in a moving van. They roll some big thing that looks like a refrigerator into the secret room and everybody says, "Yeah, that’s the phone system." Nobody knows how it works, except for the specialist who's been through 10 months of training. These systems are very, very costly to maintain these days. They are specialty hardware, very proprietary, and the maintenance alone has become quite an issue now.

Imagine all that capability being delivered to you as part of a download. You run it on the same computing infrastructure that you use for many of your other business applications and you administrate and manage it in the same way. You don’t have to look very hard at that to imagine some significant efficiencies in IT infrastructure. If it’s built in a way where it opens up its services, you can look at some real examples in the business.

Suppose I have a customer who is a major distributor of airline parts. The issue with parts for aircraft is that they are under strict inspection. Once they are put into the distribution center and shipped to a mechanic, they can no longer be restocked without going through a very expensive, re-inspection process.

What happens with airline mechanics is they'll call in to get certain parts and not being sure what they really need, they'll order three or four different parts. The theory is they'll just send the one’s back that they didn’t need.

This has been a big problem for the distributor. What they've utilized is an actual recording of the dialog between the mechanic and the order entry as that order is posted. They can now go back and very easily pull up that transaction and pull forward the recording. Therefore, the mechanic and the airlines have to take those parts.

These are just real, street-level business issues that I've dealt with. We have several of those scenarios, where once you look at inefficiencies in your business and look at how the human action makes that transaction occur, you can apply the technology to overcome it.

Gardner: JP Morgenthal, we've got cell phones, mobile Internet devices, netbooks, this notion of always on and multi-modality always on. Now just saying that you've got voice, text, and the ability to have two-way communications -- synchronous and asynchronous -- begs the necessity for bringing more communications into business processes. Do you agree with that?

Morgenthal: I definitely do. Clearly from an analyst perspective, you can talk about it and give it a very analytical representation, but the interesting thing is that I actually have real world experience in data behind this. Before coming back to being an analyst and joining Burton in November, I had my own software company, Avorcor, and we had developed supply-chain management as a service.

One things I did was integrate with an open-source communications project called StarPound, which is business-process management integrated with Asterisk, and we built a demonstration that really illustrated the value proposition in the warehouse.

I'd been working with a number of companies who had warehouse issues, and we were basically normalizing those issues by instituting a new services architecture and layering that on top of that legacy system, so they could build their business processes.

One of the biggest issue was they were still communicating exceptions that were happening in the warehouse because device limitations were scanners and text in a very noisy environment. Everyone agreed that the best communications tool in that environment was their cell phone because it vibrated. Well, the Blackberry now has vibration too. So, that’s also a valid form of communication.

If you tie this as a unified communications strategy to the business process, it’s very effective and not only is it very effective, but -- I hate to say it -- it begs only more constant information overload.

Years ago, we took it for granted. You didn't get things for a couple of days, because the communications pipeline took that long to complete. Now, we expect things in microseconds. So, it's enhancing the expectations of people in general because of that. But still, I think overall productivity goes up tremendously, and we move much more effectively toward a real-time event architecture across communications and systems and people. It’s really fascinating to watch and it’s very effective.

Gardner: Anne Thomas Manes, we think about crossing these gaps between what were traditionally telephony technologies, and now it can exercise the services and access the services, but there remains a cultural gap. Analysts, architects, and developers are not always thinking along the communications network line of reasoning. They don’t always look necessarily for these on-ramps and off-ramps to business processes. Do we need to try to encourage developers and architects to think differently around SOC capabilities, as they increase their business agility?

Change the Way We Talk

Manes: We’ll get into the "SOA is dead" discussions later. One thing that I have pushed is not that service orientation needs to go away, but that we need to change the way we talk about it. What we need to be focusing on are services that actually provide value to the developers who need access to capabilities and to the business guys who need the capabilities to be inherent inside their systems.

When we're talking about communications services, you want to make sure that those services are very easy to access. With communications services, when you start looking inside PBXs, voice over IP, and those kinds of things, that’s arcane and completely out of the realm of normal development skills that you would get in a Web developer.

Now, we do have some nice capabilities like click to call, and those are set up as drop-in components that people can now use inside their Web applications. Wouldn’t it be nice, if we actually had a much more powerful communications service that a developer can use to communicate with a customer, communicate with a shop manager, or communicate with whatever at this point in the application?

They can call out to a communications service and specify, "Here is who I want to talk to. Here is the information I want to send. And, here is the method through which I want send it." And, and then they can have the communications service completely take care of the whole processes associated with making that work.

I can guarantee that a developer is going to choose that over, "Oh, I have to write all kinds of arcane code in order to figure out how to send an email or how to launch a phone call." So, building these services that simplify a very complex process is extremely valuable from a productivity perspective.

You can also look at it from another perspective and that is that I can call out to this communications service. This goes back to the first conversation we were having about this topic, which is, "I need to make sure that I actually record this and capture this in my CRM system or I need to audit it for whatever reason."

You can apply policy to the service and have that be something that you can manage and maintain from a policy perspective, which is separate from the code that’s actually implemented in the application or in the communications service.

Gardner: How about that, Todd Landry? Do we still require developers to do arcane integrations, or are there application programming interfaces (APIs) and/or other means of automating and easing the ability for developers to exploit communications services?

Landry: I'm really glad you raised that point, because we know your example of click-to-dial has been around for a while, but the execution of that has been very complex. A lot of companies that have enabled that have done it using people who are rich in telecom protocol experience and things like that.

With SOC platforms, we see it as creating an abstraction to those telecom functions -- such as making a call, recording a call, or setting up media streams -- and hiding that all from the developer. You are welcome to a white paper that describes this approach of abstracting the communications complexity.

When we looked at it in terms of how you would make it available to the applications developer, for example, our tools include Web services description language (WSDL) files that can be imported into your environment. So, you can take an IBM Rational environment, bring in functions available on the communications system and use application and Web-type technologies, without having to understand the complexities of underlying telecom protocols. That’s probably one of the most critical things that we need to do on the communications side to allow the developer community to benefit from this.

Gardner: Isn’t there another approach to this, in addition to trying to ease the actual development, to make these services all part of the same cloud? Perhaps salesforce.com or Google might start offering more telephony services within their cloud. Therefore, the integrations are being done within their infrastructure and it becomes easier for developers to create processes. Do you expect that SOC will have a role in how some of these cloud providers increase their value to developers and then therefore to end-users?

Distributed Cloud SOC Services

Landry: Yes, and in the way we deploy today in many of our customers, we would, in some respects, describe it as a private cloud, because of way it’s built and because of way it’s a distributed and shared service within the enterprise.

We've got a handful of cases where we deployed that in more of a service-provider approach and you could argue that, because the consumer, the enterprise, has some stuff on premises they can also overload that or use services from the local provider. It’s built on that kind of model.

There's is another piece of this that says these platforms are bringing together multiple forms of media, so that you can utilize text messaging, audio, or video communications. You can do screen-sharing data collaboration in a simpler and more consistent fashion and you can utilize one set of services to do that.

Whether they're deployed as a cloud and the enterprise is using those services from within a cloud or whether they've made the decision to do them on premises, both are very viable and, in many cases, both are being done today.

Gardner: Okay, last question on SOC. Dave Linthicum, with the emphasis on cloud nowadays, do you see bringing these communications services into a cloud portfolio as a way of enticing more enterprises to get involved, particularly if we're talking about reaching out to consumers through these communications channels? Where do you see SOC and cloud intersecting?

Linthicum: They already are, probably not as formal services and definitely not as integratable data into the enterprise, but anything that’s a value within enterprises, as we are finding, ultimately will be something that some start up or even some big company packages up as a set of services and sticks them up in the cloud.

If you look in ProgrammableWeb, you'll find that there are a ton of services that are very communications oriented. They're probably not as sophisticated as the ones we're talking about now, but as more and more people adopt that as a paradigm and need these things to build enterprise composites or even mashups, then you're going to see a lot of movement in that direction, because it’s a fairly simple thing ultimately to do.

It’s going to be a very high value service to sell. You're not competing with the guys who are giving the stuff away for ad share. And, it’s just going to be another value cloud out there that people can leverage and integrate within their enterprise.

Kobielus: I want to add one last observation before we go to the "SOA is dead" topic. In order for this integration to happen in the cloud, the cloud providers need to federate their new registries with those of their enterprise customers. But, humans are reachable through a different type of registry called a directory, lightweight directory access protocol (LDAP) and other means.

Cloud providers need to federate their identity management in a directory environment with those of their customers. I don’t think the industry has really thought through all the federation issues to really make this service oriented, business communications in the cloud scenario a reality any time soon.

Gardner: So we need an open Wiki-like phone book in the sky.

Kobielus: Exactly.

SOA: Dead or Alive?

Gardner: All right. Let’s move on to our next subject -- "SOA: dead or alive?" Anne, you created a little bit of stir with a recent blog or around declaring SOA under significant pressure, particularly as a result of the economic climate, because people are not going to spend money without that verifiable ROI.

These large-scale SOA implementations are too complex and taking too much time. The economic climate is going to postpone, if not kill them outright. Did I get it right, and what’s been your position since the blog, in terms of the viability of SOA?

Manes: Certainly, lots of people have refuted my claim. At the same time, I've had at least as many people, and probably more, I am dead-on right. My goal with the blog post was to at least get the conversation going, and I think I managed to do that effectively.

I still believe that if you go before a funding board this year -- if you are an IT group and you are trying to get funding for some projects -- and you go forward with a proposal that says we need to do SOA, because SOA is good, it’s going to get shot down. Instead, what you have to go forward with is very specific value-add projects that say we need to do this, we need to do that, and we need to do that.

You need to talk about what services you're going to provide. In the example of communications services, there's a really strong value proposition associated with creating communications services. Likewise, going forward with a request to say, "We need to build a billing service which replaces the 27 different billing capabilities that we have in each of our product applications out there."

That’s a very strong, financially rich, good ROI type of proposal that’s going to win. But, it's not going to work, if you go forward and just say, "Oh, we need to go get an ESB. We need to go get some registry and repository technologies. We need to invest in all the SOA infrastructure. We need to do SOA just because SOA is what everybody is telling me we need to do."

Just talk about the services and talk about the practices that are going to help improve the architecture of your systems. Talk about doing application rationalization and talk about reducing the redundancy within your environment.

Talk about dismantling the 47 data warehouses you have that contain customer information and create a set of data services instead that actually gives you a richer, cleaner and more complete information about your customers. Those are things that are going to win.

Gardner: Does that mean that we're really still heading toward SOA, but we're just going to do it through a variety of tactical measures, and ultimately, without even realizing it, you're going to be doing SOA and that, at some point, you might need to rationalize that at a higher architectural abstraction with such things as ESBs and wider governance? Does that sound right?

Manes: Yes and no. It’s absolutely critical that you still have a strong architectural group. One of my favorite comments that came back from the blog post were the number of people who said, "Basically, we just really suck at doing architecture."

One of the primary reasons that a lot of SOA initiatives are failing is because people don’t actually do the architecture. Instead, what they do is service-oriented integration, as opposed to SOA. If you're truly doing architecture, then you're doing an analysis of your applications architecture, figuring out why you have so much extra garbage in your environment, and figuring out what you should actually start to get rid of.

You still need to have that planning group which is very strongly focused on setting the priorities. But then, what you go forward with in terms of funding are the projects that are actually going to help you achieve your architectural goals.

Bunker Mentality

Gardner: Another observation I had from watching the discussion that you helped create is that there seems to be quite a bunker mentality out there right now. A lot of people in IT are saying, "Listen, we're not going to do anything. We are going to just hunker down and keep it the way it is. We don’t need to innovate now. Wait until we get through this terrible crisis and then we will figure out how to be modern or agile."

On the other hand, I am seeing people saying, "No, now is the time to get innovative, to leapfrog, to take advantage of the pressure to reduce waste and look for efficiencies which ultimately will allow us to be more competitive not only in the short-term but over the long-term." Are we really looking at a typical, conservative-liberal breakdown in terms of the philosophy inside of IT department?

Manes: I suspect that you're going to have a lot of organizations that don’t have a lot of architectural maturity following the first camp, which is, "We're going to cut out everything. We’re just going to focus on tactical projects."

But, the folks who have a little more architectural maturity recognize the value of taking this opportunity, when lots and lots of projects are no longer going forward. They can say, "Well, now is a great time for us to start focusing on architecture and figure out how we can position ourselves to take advantage of the economy, when it does finally turn around."

Gardner: Okay. Tony Baer, we're heading into this deep depression, recession, whatever you want to call it. Those companies that aren’t very good at architecture will probably, if they hunker down, fall even further behind. Those organizations that have some budget to play with, that are not in survival mode alone, and are looking to be something bigger and better on the other side of the recession, they move further ahead. Are we coming into a bifurcation of who does IT better or worse, based on this recession?

Baer: I don’t think there is any question about that. I'd call that the Walmart strategy. Take a look at the previous recession. To some extent, the same thing is happening now that happened back in the recession of 2001-2002. Walmart actually increased its spending for expansion with the expectation that its low-price strategy was sound. In other words, its marketing architecture was sound for that period, but that it would be better prepared for the upswing, when the recovery happened.

I think what Anne is saying right now is that organizations that did get ahead of the curve with SOA, that thoughtfully began the architecture process and rationalized it, will go ahead, because there will be real economies at some point compared to traditional application development.

Those that have been basically doing what Joe McKendrick has called "just a bunch of web services" are just going to essentially retrench and say, "We just can’t afford to create more spaghetti right now. We are just going to do it a lot of break fixes." So, I would totally agree with Anne there.

Gardner: Joe McKendrick, are we going through an acceleration of winners and losers in IT, particularly at a sort of company-strategy level and core-competency level?

McKendrick: Yeah, Dana, absolutely. I've always said that the companies that have gravitated towards SOA are the companies that will probably do well anyway. Those are the companies with more visionary management and more tightly integrated approaches to business. Those are the companies that we've seen in all the case studies that over recent years that have gravitated towards SOA. Let’s face it, if they didn’t have SOA, they probably would have been doing okay anyway, because they're well-managed companies.

The companies that really could have used SOA, the companies not likely to be adopting SOA, or not likely be looking at SOA, as Anne and Tony discussed, those are the hunker-down companies, the companies that have fairly unsatisfactory architectures or no architectural approach. We're going to be seeing that going forward as well.

Gardner: To further refine this, Dave Linthicum, are we talking about companies that are good at IT, regardless of what’s in their quiver whether it’s SOA, Web oriented architecture (WOA), or communications and SOC? Regardless of the tools that you have at your disposal, it’s how well you use them that defines you, and if you fall further behind and you don’t adopt more tools, that’s a bad thing. Is that oversimplifying it?

IT Talent Shortage

Linthicum: Not really. The point that I made is the same point I have been making for a long period of time. We have talent shortage in the world of SOA. There are companies out there that have some very good IT talent, and they can take SOA, WOA, or cloud computing, look at the business problems, make some very nice systems, and automate the business nicely.

However, the majority of people out there who are wrestling around with architecture are ill equipped to solve some of the issues. They have a tendency to focus in wrong areas. Anne hit this in her blog as well. It was brilliant.

In the area of, "Let’s do quick tactical things, and look at this as a big systemic issue we are looking to solve," it just becomes too big, too complex. They try to solve it with things that are too tactical and just don’t have enough value. There are no free lunches with SOA or any kind of an architectural approach or any thing we have to improve the business.

You're going to have to break things down to their functional primitive and build them up again. You're going to have to think long and hard about how your architecture relates and links back to the business and how that’s going to work.

I wish there were something you could buy in a box or something you could download or some cloud you can connect to, but at the end of the day it’s the talent of the people who are doing the job. That’s where people have been falling down. Over and over again, in the last three years, we have identified this. I don’t think anybody has taken steps to improve it. In fact, I think it’s gotten worse.

Gardner: JP Morgenthal, without trying to be derogatory, it sounds like those people who do just tactical things, who are not evolving to a larger culture at a business-process level, at a agility level are kind of like Neanderthals. They were walking around Europe 25,000-100,000 years ago. Then, these Homo sapiens come on the scene and maybe have a little higher abstraction of skills, competency, look strategically at IT, much more services-oriented that eventually will overtake the landscape. Does that sound right?

Morgenthal: It's a great question. To say that you are going to be successful in business because you focused on IT architecture is a stretch. When we did our 2009 predictions, one of my predictions was the rise of disposable computing. For a certain class of businesses, it’s going to be okay to have "good enough" software and not worry about, "Am I going to be using the same application 20 years out," -- really moving the thought processes from 3-5 year plans to 5-9 month plans.

When you talk about things in that range, SOA falls apart as a requirement, because that’s something that you definitely want to engage in where you have longevity or a long-term strategy to apply. Including cloud computing and the rise of start ups in the cloud, or at least their IT infrastructure in the cloud, versus building data centers, is going to introduce an opportunity for that to occur.

There is a class of organizations that hears SOA. They're going to get IT staff that come from an environment where people did SOA. There's going to be a little culture clash, because the executives there are going to be saying, "I don’t get this. I don’t get you. Who are you? I want my cell phone to do this, this and that, and I can make it do that by looking at it sideways. You’re telling me I've got to go spend all this money. Are you nuts?"

So, you have that going on, and then you have organizations that are involved in some very complex business opportunities in the financial sector or in the manufacturing sector. If they don’t look at their business and model it in a way that their systems mirror what they are doing one for one, they’re going to continue to fight that impedance mismatch that’s been going on since the early days of computing.

Then, the mismatch made sense, because the costs of computing were so expensive that we had to take small bites, chew on it, and make it work. Now, with the cost of computing where it’s at, we should be disregarding that notion, reexamining our systems, and saying our systems should meet our business requirements one for one. We shouldn’t have this discrepancy that when I talk business, it needs to be translated for IT purposes.

Gardner: Todd Landry, for some organizations, SOA is dead, at least during the economic downturn. For other organizations, it could be alive and well. From your perspective, what differentiates these organizations? How do you separate the innovator class from the "let’s just keep it simple and do our jobs and hope for the best" class?

Landry: Finding them and separating them is probably an arduous task. During tough economic times, the question of what projects should be worked on becomes more of a financial question than just it’s a cool technology question. During better times, we do many different projects and don’t spend time looking at the business benefit.

JP’s point of, "if you do technology architecture, your business will get better" is not real. There are hundreds of different projects you can look at in any IT infrastructure, and, especially today, people are spending more time looking at which ones will help the business operate in a more streamlined fashion.

They’re questioning what it’s going to cost to do that, how I can do that without spending outrageous dollars, and is it going to make a difference for my business? Again, the observation of cost associated with those projects becomes more heightened during these kinds of economic times.

We're looking for people who are investing in new initiatives, because they see this as an opportunity to optimize, an opportunity to streamline, and it will help them longer term. We look for those kind of people that realize that this can be seen as an opportunity, as much as a tough situation to deal with the economy.

Kobielus: The whole "SOA is dead" theme struck a responsive chord in the industry, because there's a lot of fatigue, not only with the buzzword, but the very concept. It’s been too grandiose and nebulous. It’s been oversold, expectations have been built up too high, and governance is a bear.

We all know the real-world implementation problems with SOA, the way it’s been developed and presented and discussed in the industry. The core of it is services. As Anne indicated, services are the unit of governance that SOA begot.

We all now focus on services. Now, we’re moving into the world of cloud computing and, you know what, a nebulous environment has gotten even more nebulous. The issues with governance, services, and the cloud -- everything is a service in the cloud. So, how do you govern everything? How do you federate public and private clouds? How do you control mashups and so forth? How do you deal with the issues like virtual machine sprawl?

The range of issues now being thrown into the big SOA hopper under the cloud paradigm is just growing, and the fatigue is going to grow, and the disillusionment is going to grow with the very concept of SOA. I just want to point that out as a background condition that I’m sensing everywhere.

Gardner: Anne, is there a hedge on this somehow? That is to say, can you continue to be tactical, can you avoid some of the larger cost issues around SOA, but, at the same time, not put yourself at a disadvantage 18, 24, or 36 months down the road for moving closer to SOA at that time?

Manes: My core recommendation is to think big and take small steps.

You need to do the planning, and your architecture team should be able to do that, without having to go get permission from your funding organization to do planning, because that’s what they’re supposed to be doing. But then, they have to identify quick, short, tactical projects that will actually deliver value.

That’s what they should do and are designed to do to improve the architecture as a whole. It can't be just, "Oh I have to integrate this system with that system." They really should be focusing on identifying projects that will, in fact, improve the architecture. In that way, you’ll be in a better position when things are over.

Gardner: Just to pull our two discussions together, do you think that SOC forms one of those tactical benefits that demonstrates ROI, improves productivity, but that also sets you up for larger benefits later?

Manes: Communications services, as a general rule, are valuable because having your applications integrate with communications is often challenging. But, you need to take a look at your individual corporate priorities to determine whether that actually is a higher priority this year than something else.

Gardner: Does anybody else want to chime in quickly on SOC as a tactical benefit to SOA? Todd, you must have something to say on that.

Landry: The tactical benefit we’re seeing is a lot of very specific cases already in the end-customer areas, where people have made the decision that this is important. We talk about the economy, but security concern is at an all-time high, and there is a lot of sensitivity there.

In most government organizations, they’ve now assigned a geo spatial officer, someone to go look at how the communications system is better used across the different emergency organizations, and how first responders can come together and communicate and collaborate in emergency situations.

We’ve recently demonstrated some multidimensional collaboration tools that bring together the identity of vehicles and simplify the manner in which you tie radio IP-based communications across different emergency entities. You’ve got real cases here that people are addressing today. There are some tactical activities out there related to that.

I think the point made about think big and pick small projects is really important, because it is a big ocean out there and you’ve got to pick the things that makes sense for your business.

Gardner: Great. I want to thank the panel for this week, we had Tony Baer, senior analyst at Ovum. We had Jim Kobielus, senior analyst at Forrester Research. Joe McKendrick, independent analyst and blogger. David Linthicum, founder of Linthicum Group. JP Morgenthal, senior analyst Burton Group, and Anne Thomas Manes, vice president and research director of Burton Group.

We also thank our guest, Todd Landry, vice president of NEC Sphere. I want to also thank our charter sponsor for the BriefingsDirect Analyst Insights Edition podcast series, Active Endpoints, maker of the Active VOS visual orchestration system.

We’re also coming to you through the support of TIBCO Software. This is Dana Gardner, principal analyst at Interarbor Solutions. Thanks for listening and come back next time.

Listen to the podcast. Download the podcast. Find it on iTunes/iPod. Learn more. Charter Sponsor: Active Endpoints. Additional underwriting by TIBCO Software.

Special offer: Download a free, supported 30-day trial of Active Endpoint's ActiveVOS at www.activevos.com/insight.

Edited transcript of BriefingsDirect Analyst Insights Edition podcast, Vol. 36, on communications as a service and the future of SOA in light of hard economic times. Copyright Interarbor Solutions, LLC, 2005-2009. All rights reserved.

BriefingsDirect Analysts Make 2009 Predictions for Enterprise IT, SOA, Cloud and Business Intelligence

Edited transcript of BriefingsDirect Analyst Insights Edition podcast, Vol. 35, on how analysts see cloud computing, SOA, the economy, and Obama Administration in 2009, recorded Dec. 19, 2008.

Listen to the podcast. Download the podcast. Find it on iTunes/iPod. Charter Sponsor: Active Endpoints.

Special offer: Download a free, supported 30-day trial of Active Endpoint's ActiveVOS at www.activevos.com/insight.

Dana Gardner: Hello, and welcome to the latest BriefingsDirect Analyst Insights Edition, Vol. 35. This periodic discussion and dissection of IT infrastructure related news and events, with a panel of industry analysts and guests, comes to you with the help of our Charter Sponsor, Active Endpoints, maker of the ActiveVOS visual orchestration system. I'm your host and moderator Dana Gardner, principal analyst at Interarbor Solutions.

Our topic this week, and this is the week of Dec. 15, 2008, marks our year-end show. Happy holidays to you all! But, rather than look back at this year in review, because the year changed really dramatically after September, I think it makes a lot more sense to look forward into 2009.

We're going to look at what trends may have changed in 2008, but with an emphasis on the impacts for IT users, and buyers and sellers in the coming year. We're going to ask our distinguished panel of analysts and experts for their predictions for IT in 2009.

To help us gaze into the crystal ball, we're joined by this week's BriefingsDirect Analyst Insights panel. Please let me welcome Jim Kobielus, senior analyst at Forrester Research.

Jim Kobielus: Hi, Dana. Hi, everybody.

Gardner: Tony Baer, senior analyst at Ovum.

Tony Baer: Happy holidays, Dana.

Gardner: Brad Shimmin, principal analyst at Current Analysis.

Brad Shimmin: Hi there, Dana, thanks for having me.

Gardner: Joe McKendrick, independent analyst and prolific blogger.

Joe McKendrick: Hi, Dana, and a happy Festivus to all.

Gardner: Dave Linthicum, founder of Linthicum Group.

Dave Linthicum: Hey, guys.

Gardner: Mike Meehan, senior analyst at Current Analysis.

Mike Meehan: Hello, all.

Gardner: And joining us for the first time, JP Morgenthal, senior analyst at Burton Group. Good to have you, JP.

JP Morgenthal: Thanks, Dana, and I'll jump on the Festivus wagon as well.

Shadow IT

Gardner: Let me start with the predictions. It gives me a chance to steal the thunder and get out there first.

My first prediction for 2009 is that spending from shadow IT activities will actually grow, and that the amount of money devoted to shadow IT activities will come from outside traditional IT budgets, from a variety of different sources, maybe even petty cash, and we'll see a bit of growth in these rogue activities.

At the same time, I think we will see a flattening, and in many cases a reduction, in officially sanctioned IT activities, but that the net result will actually be more spending overall across a variety of activities based on services and consulting as much as actual buying of licensed software and hardware products.

The risk is that these rogue applications can make it complex for governance, management, and even security, but that moving into these areas for business development purposes is going to be an overwhelming temptation. There will be more opportunities in the cloud, software as a service (SaaS), applications as a service, and for folks like marketers, business analysts, and business development professionals to take advantage and move in the market.

We're going to be looking at aggressive sales activities and new ways of reaching consumers of all kinds, across B2B and B2C activities.

I expect very little staff erosion in IT, but I think there will be a change in emphasis as to what IT is, defining it differently. Service-oriented architecture (SOA) is going to continue to grow, but Web oriented architecture (WOA) will probably overtake it and perhaps become a catalyst to some of these rogue activities. There will be a blurring between which WOA activities happen inside IT and outside.

So, my second prediction is that inside of traditional IT we're going to find a lot of new ways to quickly cut costs. This is going to be a drill for organizations to not spend money or spend less money. Virtualization will be a big part of that. Hypervisors will perhaps go commodity, and the value-add in the virtualized environment is going to be at the stacks -- virtualized stacks or containers at the applications level.

This could then lead to more direction toward a cloud operating system and a de-facto standard could begin to emerge, which would then spur even more adoption of virtualization.

We're going to see a lot more dumping of Unix and mainframes. We are going to sunset a lot of applications that aren't essential and save on the underlying costs of supporting them. There will be some modernization of applications, but only in areas where there is low risk.

There are still going to be a lot of organizations that aren't going to want to tinker with applications that are important, even if they are running on expensive infrastructure.

My third prediction is around extreme business intelligence (BI). There will be a move in scale, larger sets of data, larger sets of content, and more mingling or joining of disparate types of data and content in order to draw inferences about what the customers are willing to do and pay across both B2B and B2C activities.

We'll start to see an increased use of multi-core and parallelism to support these BI activities, and we will begin to see IT have a big role in this. This isn't something you can do as a rogue activity, but it might end up supporting rogue activities. That is to say, these new extreme BI activities might lead organizations to seek out services outside of IT. They then can execute on what they find through their analysis.

I also predict, at number four, that upgrades will suffer. Were not going to see a lot of swapping out of one system for another, unless there's a very compelling return-on-investment (ROI) scenario with verifiable short-term metrics. This is going to hurt companies like SAP and Microsoft, and Oracle and IBM to a lesser extent, given their diversification.

Trouble for Windows 7

I think Windows 7 is in trouble. People are not going to just run to Windows 7. They're going to continue to stay with XP, and this makes the timing around the Vista debacle all the more injurious to Microsoft. In hindsight, Vista needed to be a winner. Now that we're in a downturn, people are going to stick with what they have, and, of course, upgrades are essential for Microsoft to continue with its back-end strategy on data-center architecture and infrastructure.

This provides more of an opening for Linux and non-Microsoft virtualization, and that will continue. This could mean that Microsoft needs to move to its cloud offerings all the more quickly, which then could actually spell earnings troubles for the company, at least in the short to medium term.

My last prediction is that the role of social media and networks will continue to grow and be impactful for enterprises, as marketers and salespeople begin to look to these organizations from the metadata and inference about what customers are willing to buy, particularly under tight economic conditions.

There's going to be a need to tie traditional customer relationship management (CRM) and sales applications with some sort of a process overlay into the metadata that's available from these Web-based cloud environments, where users have shared so much inference and data about themselves.

So, I look for some mashups between social data and the sales and business development, perhaps through these rogue applications and approaches outside of IT, but IT activities nonetheless, in 2009. Thanks.

Jim Kobielus, you're up. What are your five predictions?

Kobielus: I need to go home now. You stole all my predictions. Actually, that was great, Dana. I was taking notes, just to make sure that I don't repeat too many of your points unnecessarily, although I do want to steal everything you just said.

My five predictions for 2009 ... I'll start by listing them under a quick phrase and then I'll elaborate very quickly. I don't want to steal everybody else's thunder.

The five broad categories of prediction for 2009 are: Number one, Obama. Number two, cloud. Number three, recession. Number four, GRC -- that's governance, risk, and compliance. Then, number five, social networking.

Let me just start with [U.S. President Elect Barack] Obama. Obviously, we're going to have a new president in 2009. He'll most likely appoint a national chief technology officer or a national tech policy coordinator. Based on his appointment so far, I think Obama is going to choose a heavy hitter who has huge credibility and stature in the IT space.

We've batted around various names, and I'm not going to add more to the mix now. Whoever it is, it's going to be someone who's going to focus on SOA at a national level, in terms of how we, as a country, can take advantage of reusing agility, transformation, optimization, and all the other benefits that come from SOA properly implemented across different agencies.

So, number one, I think Obama is going to make a major change in how the government deploys IT assets and spends them.

The maturing of clouds

Number two, cloud. Dana went to town on cloud, and I am not going to say much more, beyond the fact that in 2009, clouds are going to become less of a work in progress, in terms of public clouds and private clouds, and become more of a mature reality, in terms of how enterprises acquire functionality, how they acquire applications and platforms.

I break out the cloud developments in 2009 into a long alliterative list. Clouds will start up in greater numbers. They will stratify, which means that the vendors, like Google, Microsoft, and Amazon and others with their cloud offerings, will build full stacks, strata, in their cloud services that include all the appropriate layers, application components, integration services, and platforms. So, the industry will converge on a more of a reference model for cloud in 2009.

They'll also stabilize the clouds. In other words, they'll become more mature, stable and less scary for corporate IT to move applications and data to. They'll standardize, and the clouds will standardize around SOA and WOA standards. There will be more standards, interfaces, and application programming interfaces (APIs) focused on cloud computing, so you can move your applications and data from one cloud to another a bit more seamlessly than you can now with these proprietary clouds that are out there. And, there are other "S" items that I won't share here.

Number three, recession. Clearly, we are in a deep funk, and it might get a lot worse before it gets better. That's clearly hammering all IT budgets everywhere. So, as Dana said, every user and every organization is going to look for opportunities to save money on their IT budgets.

They're going to put a freeze on projects. They're going to delay or cancel upgrades. Their users, as you said very nicely, Dana, are going to dip into petty cash and go around IT to get what they need. They're going to go to cloud offerings. So, the recession will hammer the entire IT industry and all budgets.

As far as GRC, government is cracking down. If it has to bail out the financial-services industry, bail out the auto industry, and bail out other industries, the government is not going to do it with no strings attached.

Compliance, regulations, reporting requirements, the whole apparatus of GRC will be brought to bear on the industries that the government is saving and bailing out.

Then finally, social networking. Dana provided a very good discussion of how social networking will pervade everything in terms of applications and services.

The Obama campaign set the stage clearly for more WOA-style, Web 2.0, or social-networking style governance in this country and other countries. So, we'll see more uptake of social networking.

We'll see more BI become social networking, in the sense of mashup as a style of BI application, reporting, dashboards, and development. Mashups for user self-service BI development will come to the fore. It will be a huge theme in the BI space in 2009 and beyond of that.

That really plays into the whole cost control theme, which is that IT will be severely constrained in terms of budget and manpower. They're going to push more of the development work to the end user. The end user will build reports that heretofore you've relied on data modelers to build for you. Those are my five.

Gardner: Thank you, Jim. Tony Baer, you're up. What did we miss?

Cost savings, cost savings

Baer: It's going to be hard to top both of you folks, so I'm going to just add some things in the margins. If I were to make one elevator statement on this, I feel like the guy [Kenan Thompson as Oscar Rogers] from Saturday Night Live, the economic expert, who they interview on "Weekend Update." He starts to give all the causes. Then, he just says, "Well, just fix it!"

That's essentially going to be the theme this year. The top five are going to be cost savings, cost savings, cost savings.

That does involve a lot of the strategies that both you and Jim have just described. For one thing, it's going to put a lot more emphasis on using the resources and infrastructure that you already have. It's going to damp down entering into new long-term contracts for anything.

Ironically, one result of that is that for the moment, you'll actually see little less emphasis on outsourcing, because that does imply a long-term contract. The fact is, I don't think anyone is really doing any meaningful projecting beyond Q1. I was just reviewing Adobe's year-end numbers and projections. Normally, they project out for the full fiscal year, and they are only going to project out for the Q1.

I'll just go through a very quick laundry list. For one thing, as I mentioned, it's going to be a lot of low cost, no cost. There will be a lot more use of open source, a lot more. This is definitely the year that the cloud and SaaS come into their own, but with a key qualification.

I think it's going to be managed clouds. Essentially, to take advantage of raw clouds, like Amazon EC2 you have to put in more of your own management infrastructure. I don't see the use of what I would call "clouds in the wild." I see more managed clouds from that standpoint.

For IT organizations, it's going to dictate more attention to IT service management to show that we're not just keeping systems going and keeping the lights on, but more along the lines of, "Here are the services that we're delivering to the business," as they try to justify the system.

On the back-end, it will be "Use more of what you have," and huge renewed investments in BI. So, Jim, I do think you still have a job this year.

Finally, because it's going to take a while for this to unfold -- you just don't regulate overnight -- there will be much greater attention to GRC.

Gardner: Thank you, Tony. Brad Shimmin, you're up.

Shimmin: Thanks, Dana. For my predictions for 2009 I took a different tact in anticipation of a new analytical concern we're starting up here in January. It's going to focus on collaboration. So, everything I did settled on that.

All the predictions I have stem from the themes that you guys have been talking about: cutting cost, such as travel, and squeezing efficiencies out of the IT infrastructure, as well as the users themselves. So, bear that in mind as I go through this.

Collaborative social networks

The first one for me is vendors tackling enterprise-plus-consumer based social networks, a blended view of those. Enterprise-focused vendors are going to do more than simply sink info from public sites like Facebook. They're going to take that information and build into or out from the enterprise into those social networks and drive information from those. It's going to become a two-way street.

You're going to see folks like Facebook, and most notably, LinkedIn, working in the other direction themselves, and with third parties, to develop enterprise-bound social networks. Look for those to emerge next year.

The second thing for me is cloud software, now that it's jumped the shark. I know we've all been talking about it, but it's definitely jumped the shark for me. I see the vendors within the collaboration space settling beyond the small and medium business (SMB) market and looking more toward the larger enterprises that are looking to squeeze more out of their existing IT infrastructure or cut costs.

Folks like IBM and Microsoft have already shown us that they can hit the long tail with stuff like Bluehouse and Microsoft Online Services (MOS) for collaboration. But, you're going to see vendors like Cisco and Oracle take up this challenge with more of a focus on managed hosting services that look more like SaaS, but they are really managed.

That's something that will appeal to the larger enterprises, owing to security, manageability, and other assurances that you get from that, not just pure-play, do-it-yourself SaaS.

The third thing for me is that enterprises are going to move away from a steep hierarchy, or the word might be "oligarchy," of an organizational model internally. This is just about how enterprises structure themselves.

This goes back to what you were saying, Dana, with stuff going off the books, and what Tony was saying about driving revenue from places other than CAPEX. Instead, to become not just more efficient and agile, companies are going to want to self organize to create these internal ecosystems, if you will, where organizations are built around employee experience, associations, interests, and energy levels -- what they want to focus on.

That's going to allow companies to more efficiently harness the users. The people, as Jim was saying earlier, perhaps are going to be tasked with setting up their own BI queries and mashing up their own applications. It's really thinking about those people, giving them the ability to run the show inside of an organization, instead of waiting for everything to come top-down.

The fourth thing for me is -- speaking in terms of communities, both internally and externally -- I am seeing silos breakdown between those.

Gone are the days of consumer-faced social networking and enterprise-faced social networking existing as independent entities, as I was saying earlier. Thanks to user profile standards like OpenID and expansion of APIs, community providers and third-party aggregation and integration tool vendors are going to allow applications and users to flow between what were heretofore closed communities.

For example, you already have vendors moving in that direction with Yahoo's YOS, which now allows the My Yahoo start page to host third-party applications from nemesis Google.

The fifth and final thing for me -- and this might be more of a wish than a prediction; I'm an eternal optimist I guess -- I'm looking for virtual worlds to gain a foothold in the enterprise.

We've seen folks like [Cisco Chairman and CEO] John Chambers use Second Life to do a dog-and-pony show. Those are great marketing tools, but they're nothing compared to the efficiencies and benefits you can gain from using the software for other things. Dana, you alluded earlier to being able to leverage that mechanism for communication with CRM. I think we're going to see that change how virtual networks can be utilized inside the enterprise.

It's not just for marketing and sales, but also to support B2B and B2C communities, where effective communication between your supply channel members is really paramount. To date, nobody has tackled that.

So, we'll see virtual worlds actually make an impact in terms of allowing these global, loosely coupled entities communicate more effectively in 2009. That's it for me.

Gardner: Thanks. Joe McKendrick, how do you see things shaking out?

McKendrick: Thanks, Dana. You guys are a hard act to follow. My first prediction -- are you ready for this -- the government, the U.S. Treasury, is going to swoop in with the Troubled Assets Relief Program (TARP) funds and swoop up all the troubled IT assets across the country -- those IBM mainframes, older mainframes, DEC units, Windows NT.

Then, the Fed is going to come in with zero percent liquidity to help finance it, and that's going to raise all boats.

Gardner: Joe, are you defining a new sector called "Toxic IT?"

McKendrick: Toxic IT, there you go.

Gardner: Joe, April 1 is not for several months.

McKendrick: Okay, just kidding. My other prediction: President Obama is going to make Tony Baer the National CTO/CIO, because he wants to "just fix it," and that's a good philosophy.

It's the economy

Okay, all seriousness aside now. The top issue, of course, is the economy. It's going to dominate our thinking through 2009. But, recession planning is so 2008, because SOA, which I focus on as well as IT, is a long-term process. You need to look three years down the road.

The economy is going to turn around. I see it turning around at some point in 2009. That's what economists are saying, and companies have to prepare for a growth mode and the ability to grow within a new environment.

Let's face it. IT has already been tight. IT has been tight since the dot-bomb era of 2001-2002. As some of us have already been saying, there probably is not going to be a huge diminishment in IT departments, because of the fact that the budgets have been lean, things have already been tight, companies already know, or have been running very efficiently, and IT departments have been overworked as it is.

An interesting sidelight is the whole Enterprise 2.0. JP, you and I have discussed this a little bit. The recession and downturn isn't going to be like it's been in the past. People are more empowered with social networking tools, as employees and as people looking for jobs. They're looking to start new businesses

We have a lot of tools available to us now that we didn't have back in 2000, or we didn't have back in 1991 or 1982, or any of those previous eras. People don't have to be victims of an economic downturn, as they have been in the past. We have the capability to network across the globe. We have the capability to start new businesses.

I've talked on this webcast before about a company that started a business with an $80 investment in IT infrastructure, thanks to cloud computing. I just heard about another company that spent about $200 for its first two months of IT.

Gardner: The question is, Joe, are they getting their money's worth?

McKendrick: I think they are. They don't have to invest in servers. They don't have to go out and buy servers. They don't have to go out and buy disk arrays, and worry about the maintenance, hiring people, and know how to maintain those things. There are a lot of opportunities for companies, and we are going to see that. We are going to see folks -- maybe IT people, or people who work for vendors and have been laid off -- have the ability to start their own business at a very low cost of entry.

On the flip side of that, the whole social-networking and cloud-computing phenomena, companies have these tools as well to employ low-cost methods to reach their markets and to interact with their customers. We're going to see a lot more of that as well.

A marketing campaign doesn't have to cost $200,000 to reach your customers. You can use the social network, the Web 2.0 tools, to interact and collaborate and find out what's going on in your markets at a very relatively low cost.

Gardner: From your mouth to God's ears. All right. Dave Linthicum, we have the entire future before us. What should we expect?

Linthicum: You guys took a lot of my better ideas, but I'll just expand on some of them.

The first thing I'd like to do is throw my firm out there for a bailout from the government. I think a billion dollars. I'm cash-flow positive, but I think I can do a lot with the money, including throwing one hell of a New Year's Eve party. So, hopefully the money will start coming in.

Cloud comes into its own

Number one is that the interest in cloud computing, which I have been focusing on in my career, at least for the last eight years, is finally going to come into its own, like everybody has been saying here. That's rather obvious at this point.

As far as what I can add to what's been said so far, what we're going to see in 2009 is a lot of startups, specifically some cloud-computing startups. You're going to see even more around what I call "cloud mediation." That is guys like RightScale, and a few other folks in the space that sit between you and the major cloud providers. They basically mediate issues around data semantics, performance management, load balancing, and those sorts of things.

One thing that's a big hole in the cloud computing movement so far is that most of the solutions out there, even the database solutions, are proprietary. They use different APIs, different interfaces, and different sets of standards. It's going to be a play for a lot of companies to get in there and provide more reliable infrastructure in and between these various guys out there.

I'm aware of one startup a week, and they're coming in through the funders, not necessarily through the entrepreneurs, which is unusual.

The links to social networking will be there. They're not going to be quite as pervasive as everybody thinks. Social networking is going to have its place, but once we figure it out, it will be, "Okay, yeah." It's going to have its value, but we're just going to move on as far as this revolution goes. I don't think that's going to happen in 2009.

People are going to use it as a marketing opportunity, just like they used email, Web sites and those sorts of things, and now blogging opportunities, but eventually it's just going to fall into place.

There will be a huge explosion in the rogue cloud movement, as you mentioned, Dana, and also the platform-as-a-service (PaaS) space. The architects and CIOs out there are going to be scrambling around trying to figure out how to place governance around that.

Everybody is going to be building applications, typically using free platforms like Google App Engine. They're going to start launching these things into production, and there is going to be no rhyme or reason around how they fit into the existing infrastructure. That's happening now and it's going to happen more in 2009.

In switching gears to SOA, there's going to be a larger focus on inter-domain SOA technology. The focus will still be on the short-term tactical and the ability to provide quick value in the SOA space to justify it, so you can get additional funding.

As we start building these things, people are going to look at the departments that are implementing their SOA projects and try to figure out how to bind these things at an enterprise level. I call this the micro domain versus the macro domain.

Technology doesn't scale typically to that point, as people are finding, and it's going to take a different set of technologies and a different set of architectural skill sets to solve that problem.

On the downside, the jig will be up for poor SOA technology out there. Guys who haven't been able to get acquired or haven't been able to hit that inflection point and are still stumbling along -- typically making $2-$5 million a year and burning about that much in cash -- are going to eventually just going to have the plug pulled. And, 2009 is going to be when it's going to happen. They're just going to run out of steam.

We have a few of them right now. Ultimately, they're going to have lots of cuts, start hemorrhaging cash, and they're just going to go out. Some of them may be bought on the cheap, but the majority of them are just going to shut their doors.

Decline of the SOA buzzword

Finally, the SOA buzzword out there is going to diminish in relevancy. I'm talking about the buzzword, not necessarily the notion of SOA. SOA predates when the buzzword was created, and it's going to postdate when the word "SOA" was created. It's going to morph into different things, and the cloud computing movement is going to get into it and define it in different directions.

Enterprise architecture had a chance to get in there and figure out how SOA relates back into their world. They're been fairly successful in some aspects of it, but they have been too slow in moving. The whole SOA movement is going to be more defined by the cloud. That's good for me and probably for everybody on this call.

Gardner: You predicted a couple of years ago, Dave, that SOA would get subsumed into enterprise architecture. I assume that's what you are talking about?

Linthicum: Yeah, that's what I am talking about. Most SOA is going to get practiced in '09 and '10, at least the new stuff, in the cloud-computing movement, even though it’s still SOA. Basically, It's going to encompass cloud resources. Enterprise architecture will ultimately morph with SOA, and they'll become fundamentally the same concept.

SOA, which has always been an architectural pattern under the domain of enterprise architecture, will be subsumed by enterprise architecture and will be an architectural pattern under enterprise architecture. But, we're not going to be talking as much about SOA in '09.

Gardner: Just one quick follow-up. In terms of startups, you don't seem to think that there is going to be much funding left, no IPOs to speak of. What's the business model for these startups that you're seeing, the ones that can take advantage of PaaS with low upfront costs? How do they get funded? Do they need funding? And, what's their end strategy as a business?

Linthicum: They do need funding, but they don't need as much as funding as a company a couple of years ago, just because of everything you can get on demand. The strategy for the business is basically to glom onto the cloud-computing movement.

Some of the larger enterprises out there, some of my clients who are moving into the cloud-computing space by leaps and bounds, are realizing there are huge holes in the area, such as monitoring, event management, security, data mediation, all these sorts of things that aren't built into the larger cloud providers out there.

They have an immediate demand right now, a pent-up demand that's being created by the desire to lower cost, and driving a lot of these enterprises out into cloud computing. They're seeing these holes, and they are looking for solutions to make these happen. Both the entrepreneurs and the funders have realized that these things exist, and they are scrambling around trying to get them up and running.

As far as funding goes, it doesn't take that much to get a company, the assets, and the infrastructure up and running. Most of these solutions you will find will be leveraging on-demand platforms themselves. So, they'll be coming out of the cloud, providing services to clouds.

Gardner: They might actually find some engineers to hire from all those other startups that went away.

Linthicum: There are a lot of them on the streets right now.

Gardner: All right. Mike Meehan, there must be something we've missed so far.

Meehan: I don't know if there's anything you really missed, but I am going to pretend like you have and try to get some stuff in there.

The first three have to do with the economy, because obviously everybody is dealing with what we expect to be a down economy.

Rise of the 'Yankee Swap'

The first one is going to be a blast from the recent past. If everybody remembers back in 2001, when that recession hit, all of a sudden you could buy wonderful amounts of gear on eBay for next to nothing. I remember talking to one guy who was smiling like a Cheshire Cat, because he had replaced $45,000 worth of Unix with $500 worth of Linux. I think you are going to see a lot of that.

People are going to be shutting down data centers. That's going to cause a glut of servers and storage gear and network gear, and you are going to be able to get it cheap and affordable. That's going to hit the storage and network and server companies.

New sales are going to be tough to come by, because you're going to be able to get previously owned gear at affordable prices.

Gardner: So, a great disruption to the existing channel then?

Meehan: Exactly. It's really going to hit the channel vendors. CIOs are going to be able to come in and say, "Hey, look, I'm genius. I bought all of this stuff for next to nothing." And, there are going to be other CIOs who come in and say, "Hey, you know what. I was able to get some money by liquidating our assets." That financial pressure is going to affect everybody in the hardware market.

Gardner: They use to call it a Yankee Swap. Didn't they?

Meehan: Yeah. I think you are going to see a big international Yankee Swap. So that's going to be out there.

The next one is license wars. The CIOs are coming in, they are going to be asked to cut budget, and there is only so much flesh you can cut out before you have to deal with that maintenance license budget. I think every company in the world is aware of the fact that they pay more in licenses than they want to. They have always theoretically wanted to lower those costs. The pressure now is going to be too great for them to not consider options.

This is going to be great for open source companies, which are going to be able to come in and say, alright, you don't have to pay me a rolling license, here is my support cost, see how much its going to lower your license.

It is going to be bad for Microsoft, because again, to a degree they are becoming commoditized across their portfolio, and that's going to hit them right in the breadbasket.

Gardner: Do you agree with me that in hindsight the fact that Vista didn't live up to its potential is really going to hurt them?

Meehan: Absolutely. There are still companies out there working on Windows 2000, and those companies are going to be looking to switch, that they haven't gone to Vista just makes them a free agent. And this is going to also apply to Office.

Gardner: Whoever that architect was on that Vista project, he's fired, right?

Meehan: I think he's long gone. I think he is running the charitable foundation. They not only missed it, but they reinforced every negative perception of Microsoft when they came out with Vista: The inability to meet a product deadline; the security flaws that have been long associated with Microsoft; you need a zillion patches just to get it to work and do basic things.

Everything that they were supposed to have addressed, they failed to address, and then they reinforced that. Now, companies are just sitting there asking, "Why am I paying this much money for bad software?"

Bad year on the sell side

Gardner: So, it will be a really a good year, if you are a negotiator on the buy side, but a terrible year if you're on the sell side.

Meehan: I'd think so. This should hit some enterprise resource planning (ERP) vendors too. Anybody who can sell SaaS in the ERP market is going to be doing better. I think you are going to see some erosion on the SAP and Oracle side, as far as enterprise apps go.

"Make my life easier or go away." That basically means, users are going to need productivity and ease-of-use integration. You're going to see those in requests for proposals (RFPs). If they're not stated explicitly, they will be there implicitly.

Referring to SOA projects, for example, don't come in and tell me how much work I'm going to have to do to make all of this come together. Come in and tell me how this is going to make my life easier on day one. The companies that can deliver that will be the ones making the sales. The ones who are telling you that you're going to need to do eight months of work to get this up and running are going to be pushed to the back burner.

I really think that's the lure of the Web-oriented stuff. I take issue with the notion of WOA, because I don't necessarily buy into the architecture portion of it, but I do buy into the notion that it makes your life easier. It makes things easier to do. If you are a developer, it can get your stuff up and running quickly. If you can do that in some sort of organized governable fashion, then go with that.

What you're going to see in a lot of the SOA projects out there in particular is, "All right. Make it easy for me to assemble an application. Make it easy for me to reuse my assets. Make it easy for me to modify my existing applications. Make it easy for me to integrate different applications and even information between different divisions of my company."

Gardner: When you say "make it easy," are you talking about governance?

Meehan: I'm actually just talking about the mechanical process of doing it. You almost want it to be governable on the fly. What you really want is that you don't have to dedicate too much time and resources to undertake these functions. Users aren't going to have that much time or that many resources.

For example, imagine I'm a financial-services company and I've picked up a good loan portfolio from a distressed corporate loan company that had to sell their good loans off, because they were distressed, because they had made bad private loans. I got a good package of corporate loans from them. I need to integrate that quickly into my system, otherwise I am not going to be able to effectively govern that. I'm also not going to be able to effectively create the future programs around those customers, which is what I am looking to do.

So, how quickly can I do things now, as opposed to how thoroughly can I do things? You're going to want to be thorough to an extent, but really it's going to be speed to market and speed to end of project that's going to be a determinant in there.

Telecom shakeup. The U.S. government is going to start treating telecom like its our national road system, and you are going to see some serious investment in that area. That's going to become one of the key points in the economic stimulus package that you're going to see.

I also think you are going to see European telcos begin to encroach, either through acquisition or just through offering services into the U.S. market.

The last one, HP buys Sun. Somebody is going to get bought this year, somebody fairly big. I'm saying HP is buying Sun.

Gardner: They don't need to buy them. They can just replace all their servers in the marketplace.

Meehan: Basically.

Gardner: JP Morgenthal, you're up. The predictions swan song. We must be missing something?

Morgenthal: The funny thing is, I have had you on mute, listening to everybody, and struggling, because while this was going on, I had a visit from my media-services-in-the-cloud provider. He had to come set up my new entertainment in-the-cloud service box. We still need people is the point there. So, I found that very interesting and humorous to be going on when everyone was talking about clouds.

Age of reformation

Gardner: You're talking about the cable guy?

Morgenthal: Exactly, the cable guy. The cable guy was here setting up my TiVo box. I'm going to preface my five by saying that I see we're entering into a modern age of reformation, and there are some really interesting things that are going to start occurring this year, moving forward to 2012. I know. It's my own prophecy, and it's out there, hanging on a limb.

My first prediction is that we're going to see a greater focus on the business process. Not business process management (BPM) per se, although initially people will target that thinking they are doing business process, but eventually they will get it.

I think SOA is dead, and I believe companies have no stomach for IT initiatives that cannot immediately be attributed to a value. They're going to do some small-scale business process re-engineering, they're going to get tremendous value from it, and they are going to get it.

They're going to see that simplification is the way to go. Why are we doing all these complex things -- this hooking to that, hooking to this, hooking to that? I can just go into this one box and get everything done there. I don't care that it's not sexy, okay.

The age of disposable computing is here. We have had disposable electronics, disposable cars, and disposable appliances. The age of disposable computing is here.

Number two: The backlash of social networking. We're just on the precipice. Everyone is getting into it, having a little fun. Certain ones of us are on the leading edge. We're already getting bombarded and tired. We're already fried and overloaded from these social networks. The new people think it's a great new toy.

Give it a couple of years and you are going to see a tremendous backlash. You're going to see a rise of firms that will get paid to get people off the grid -- people who made big mistakes in thinking they were having fun during their early social networking experiment.

Gardner: This is sort of like tattoos, but in the cloud?

Morgenthal: Exactly. Angelina Jolie has got to get Bobby off her butt, and it's going to cost her. We're going to start to see that. We'll see the real backlash come into effect in 2010, but we'll start to see forms of it in this coming year.

Third, the pain from the economy is going to impact the open-systems market. We're seeing the rise of what I call the "anti IT." You hit upon that. You read about people reaching into petty cash, doing things on the cheap, finding other ways to get things done.

The one that's going to be the biggest impact is that people are treating open source like free software. That will destroy the open-source market for sure. It's the death knell. It's the stake in the vampire's heart.

People don't get it. I remind every one of my customers of that, when I talk to them, and they ask about an open-source solution. I've got to put my warning out there. Open source is not free software. You're either contributing dollars to the team that's doing it, or you are contributing your time and effort. It's not free software. You just don't take it and use it. That will be the death knell for open source for sure.

Gardner: Wait a minute, a death knell for open source or death knell for commercial open source as a business model?

Morgenthal: That's a good question. I won't differentiate at this point, because I'm looking at it from the perspective of the event horizon, where people are treating it like free software. There is no free lunch. Somewhere it's going to take hold. There's going to be a lack of support or a lack of desire to continue this thing, if people are abusing the system. It happens all the time. Nothing will drive greater abuse of open source than a bad economy, where there are no dollars.

Gardner: Okay. What else have you got?

Morgenthal: Number four: the millennial workforce is starting. This is going to change everything, and it's starting to already. These people have attitude that I haven't seen in a workforce since marketing people came out in the dot-com era.

They definitely feel like, "I want my toys. I want to be able to use my phone at work. I want to use my computer at work. I want to be able to access my sites at work." I see companies dealing with this issue in a unique way.

Their attitude isn't, "If you want a job, then you have to deal with it in our way." It's, "I'm scared. I don't know where I am going to get my workforce for the 21st Century, and I don't know how to deal with these people." Their first inclination isn't to push back with the old adage and the old way of talking about it, saying, "Hey, it's our way or the highway. We've got the money." It's "Okay, what do you want?"

This is going to really change things. How? It's yet to be seen, but clearly the introduction of a much more mobile force, more telecommuters.

Gardner: Most of us.

Morgenthal: That's a lifestyle choice. Yeah, it's pretty interesting. The millennial workforce is going to change things dramatically.

Shift in patent landscape

The last one is that there's a big change coming in Digital Rights Management (DRM) and patent and copyright. It's being lead by this initiative out of Harvard with the Recording Industry Association of America (RIAA). RIAA may have just started a war for everybody in the industry who has any copyright or any patent infringement suit. The judge in case said, "All you people, you big companies with big lawyers and big money, are taking on these poor little schnooks, and it has got to stop. They are coming in here and they don't even know what their legal rights are."

Gardner: Do you think this what Nathan Myhvold is up to?

Morgenthal: I didn't see his name associated with it. It was actually a Harvard law class, I believe, represented by a Harvard law professor [Charles Nesson], backing it. They're representing it as unconstitutional. So this case could be landmark for DRM, copyright infringement, and patent infringement.

Gardner: So, the basic message is kill all the patent trolls.

Morgenthal: It could be, and it would have a tremendous impact going into the potential for a startup economy. Dave talked about the startup economy, where downtime is a great time to start a new company and a great time to get out there and get your technology done early.

Landmark cases like this will do a lot to further the opportunities of these firms to go out there and build something without worrying, "Am I going to get taken out by Microsoft? Am I going to get taken out by Apple? I can't afford that." It's really interesting what could happen, given the cases like this are now falling on the side of the small guy, and not on the side of big companies.

Gardner: Right. Big companies were the victims of the patent trolls, now they are becoming patent trolls themselves.

Morgenthal: Yeah. They're hiring companies to go eat these things up, and then they are going after the small guy. We had multi-million dollar lawsuits over patent infringement for technologies that people hadn't even built or owned. I really think that the greed of Wall Street is also going to see that backlash, and it's going to lead to more of the same, or at least help those cases significantly.

People who have made big money pillaging the system over the years, in the age of reformation, are the ones that are going to get hung in the next two to three years.

Gardner: We're just about out of time. Let's go quickly down our list for any last synthesis insights.

Jim Kobielus, senior analyst at Forrester Research, thanks for joining. What's your synthesis of what you have heard?

Kobielus: My synthesis is that we are living in a very turbulent and volatile time in the industry. Things are changing on many levels simultaneously, and a lot of it will just be hammered by the recession. Approaches like cloud, social networking, and everything will be driven by the need to cut cost and to survive through fiscal austerity for an indefinite period.

Gardner: Tony Baer, senior analyst, Ovum, what's your takeaway?

Baer: It's hard to know where to start, but if there is one way to look at, it's back to basics. There are a lot of complex issues, and I think it's all going to be resolved locally, which in the long run, is going to present a huge governance challenge.

Gardner: Brad Shimmin, principal analyst, Current Analysis, what's your current analysis?

Shimmin: Currently, I'm thinking that the millennial generation and the down economy are converging like a perfect storm to wipe away what we have known for the last 10 years, and then ushering either perfect terror or a great new economy. I'm not sure which yet.

Gardner: Joe McKendrick, independent analyst and blogger, what's your toxic IT prediction?

McKendrick: We're definitely at a turning point. I agree with what everybody is saying out there about growth mode. Dana, I like your observations about the rogue or the shadow IT. You're going to see a lot more of that. It's been predicted for quite a few years actually that IT is going to be less of an entity onto itself and more of a function that's built into business units.

Business people are getting more involved in IT. Business people are getting more savvy about IT. JP talked about the millennial generation. They're very savvy about what IT and the power of IT can provide. We're going to see less of IT as a distinct area of the business and more part of the business, an enabler of the business. This year is going to accelerate that.

Gardner: Dave Linthicum, founder of Linthicum Group, what are you seeing from what you have heard and what's your net-net?

Linthicum: I think it's going to be one of the most exciting couple of years in IT. Just by sheer cost pressure, we're going to have to get down to simplifying and solving some of these issues, and not just playing around with technology. Things are going to get more simplistic, more effective, and more efficient than they have been over the last 20 years of building layer upon layer of complexity. We just can't afford to do that anymore, and now we are going to have to go fix it.

Gardner: Mike Meehan, senior analyst, Current Analysis, any additional takeaways?

Meehan: There's a lot of panic out there, and in keeping with one of the great holiday traditions, I think the winner is going to be Mr. Potter. The future belongs to warped, frustrated old men.

Gardner: He's buying up all those mortgages for pennies.

Meehan: Exactly.

Gardner: Alright. JP Morgenthal, one last go. What do you see from what you have heard on a high-level takeaway?

Morgenthal: Opportunity and fear -- and it's a matter of which one is stronger. I have no prediction as to which will win out. They're both equally powerful right now, and it's going to be, as Dave said, exciting to watch these two clash and see which one wins.

Gardner: I guess my takeaway is that we don't know how long it's going to take, but we will come out of this period. Survive anyway you can, but be mindful that on the other end it's going to be something quite new, with a lot of opportunities, and it's going to look a lot more like Internet time, and the clicks will mean more than the bricks.

Well, thanks all very much. Have a great holiday season. Please take a few days off and relax with your families.

I also want to thank our Charter Sponsor for the BriefingsDirect Analyst Insights Edition podcast series, and that is Active Endpoints, maker of the ActiveVOS visual orchestration system.

This is Dana Gardner, principal analyst at Interarbor Solutions, thanks for listening. Have a good year in 2009, somehow.

Listen to the podcast. Download the podcast. Find it on iTunes/iPod. Charter Sponsor: Active Endpoints.

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Edited transcript of BriefingsDirect Analyst Insights Edition podcast, Vol. 35,on how analysts see cloud computing, SOA, the economy, and Obama in 2009. Copyright Interarbor Solutions, LLC, 2005-2008. All rights reserved.