Thursday, July 26, 2007

BriefingsDirect SOA Insights Analysts on IBM’s SOA Strategy and Evolving Definitions of ‘Business Applications’

Edited transcript of weekly BriefingsDirect[TM] SOA Insights Edition podcast, recorded May 25, 2007.

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Dana Gardner: Hello, and welcome to the latest BriefingsDirect SOA Insights Edition, Vol. 19, a weekly discussion and dissection of Services Oriented Architecture (SOA) related news and events with a panel of industry analysts and guests. I’m your host and moderator, Dana Gardner, principal analyst at Interarbor Solutions.

Our panel this week consists of show regular, Joe McKendrick. Joe is a research consultant and columnist and blogger. Thanks for coming along Joe.

Joe McKendrick: Glad to be here, Dana. Thank you.

Gardner: Also with us again is Tony Baer, principal at OnStrategies and also a blogger and columnist. How are you doing, Tony?

Tony Baer: Not too bad, Dana.

Gardner: Again joining us too, Jim Kobielus, a principal analyst and blogger at Current Analysis. Welcome, Jim.

Jim Kobielus: Thanks, Dana. Hi, everybody.

Gardner: Also, on our panel this week, Dave Linthicum. He’s the CEO with the Linthicum Group and also a prolific blogger and podcaster. Welcome again, Dave.

Dave Linthicum: Thanks, Dana.

Gardner: Thanks for joining, everybody. We’re here to talk about a serious new topic that has gotten lot of additional news and events around it, and that is this whole notion of a "business application."

Now, we’ve been discussing SOA on this show for a long time. We’ve been looking at it from the position of technology, business, governance, but the elephant in the room is the idea of what a business application is going to be? We’ve had a long history of packaged business applications, mainframe applications that have been comprehensive across an entire business. Now, we’re looking at a mixture, a hybrid of highly customized enterprise application, packaged applications, and the increased compositing of services.

There were three announcements this week, the week of May 21, 2007. There was a series of announcements at the IBM Innovate Conference in Orlando, Florida, and I attended that as well as Tony. Hewlett-Packard (HP), also had sort of a coming-out party around SOA. Then, Salesforce.com also had an SOA announcement.

So, let’s look at these individually and try to come up with some analysis, some perspective, on what IBM is trying to accomplish vis-à-vis its compositing and its emphasis on business services around creating applications. It sure sounds like an applications business. And, lets look at what these other vendors are doing.

First, let’s go to Tony. You were at the IBM event. Give us a quick rundown of what you took away from the IBM announcements.

Baer: Essentially, they summarized some of the pieces that they have been putting together and became more vocal on some new pieces that they’re putting on top of that. It’s not been any secret that, for a while, IBM has been starting to verticalize SOA. I may get my order wrong with all this, but it’s a layered approach. It starts with some industry frameworks, which basically say these are things that companies in certain sectors do. It’s not quite decomposed down to process as yet, but it lays the groundwork for it.

Then, they have a component business model, which is how to model those activities in the process, but it hasn’t yet been put into anything that’s executable. Then, they have different parts, including what used to be known as Webify and what’s now known as WebSphere Business Services Fabric, putting together some content packs that include some of the actual business components, which are drawn from those models. In turn, Global Business Services (GBS), which was the old Price Waterhouse/PWC consulting arm that IBM acquired sometime back, is putting together more specific parts. I forget the exact term they used for it, but it sounded an awful lot like "applications," except, of course, they don’t really want to say the "A word."

Dana, you and I, were sitting through that presentation, where I really started to feel sorry for that GBS guy, because the whole room just laid on him. It raises a couple of questions. Number one, what’s an application anymore? Number two -- but I think more important because it’s not just a questions of semantics -- is: who is going to command the software dollars? Arguably, you could say that most companies with an ERP system -- outside of putting in version upgrades -- are not going to change the general ledger part of it, but rather the part that deals with actual B2B procurement with their business partners. That's where you start having activity at the edges. That’s where the action is. That could either happen to SAP NetWeaver, IBM’s various layered frameworks, or name the business process management vendor of your choice. That’s where the next battleground’s going to be.

Gardner: IBM, between its announcements around certification and helping to create more of a core in their labor force for SOA architecture, is saying, "We’re going to help create this workforce and we’re going to compete against the applications, but we’re going to do it in a different way. We’re going to change the game, rather than compete in the old game."

Of course, they had a few updates to the registry repository and a simulation game to help people learn about SOA. Fundamentally, I agree. This is really IBM saying, "We’re going to redefine applications and we’re going to compete with everybody." The new revenue growth is going to be at this vertical edge, where it’s a balance between customized apps that you build from scratch and packaged apps, but finding a middle ground. Jim Kobielus, you also had some takeaways from IBM this week. What did you find?

Kobielus: It’s not just IBM, but pretty much all their competitors at the high level of SOA in terms of the major platform vendors -- Oracle, Microsoft, SAP -- are just differentiating themselves in the SOA space through their abilities to provide industry business models, which, conveniently, "IBM" is the acronym for. They're able to provide deep-domain expertise that is packaged up into industry business models that they then deliver as part of an overall middleware-based solution portfolio. That’s really what applications are coming to.

They’re turning into vertical and horizontal, and in some cases diagonal, business models to address a broad variety of business processes or sector-specific requirements.

I didn't go to Innovate, but I was on the IBM Information-on-Demand Refresher Update call yesterday with the analyst community. SOA permeates the information-on-demand strategy through and through. Master Data Management (MDM) is one of my core areas at Current Analysis. I’ve written half-dozen solution assessments on MDM vendors, including IBM. What I’ve noticed is that the SOA-focused MDM vendors -- IBM, Oracle, SAS, DataFlux, TIBCO, and others -- are differentiating themselves based on the prepackaged domain models that they that they provide with their MDM solutions to target particular niches.

In their slides, IBM had a very good graphic called "MDM solutions." They’ve mapped out horizontally and vertically MDM solutions, vertically for banking, insurance, government, healthcare, etc., and then horizontally for customer care, risk and compliance, etc. Then, they had check marks to indicate their functional coverage of these various domain models.

That ties into the announcements from Innovate, which is that IBM is saying, "Here’s how we’re going to differentiate going forward. How we already differentiate is that we, with our global services, are a huge pool of deep-domain expertise that we are deploying out, providing, delivering to customers through these human beings, these professional services people. But, we are also going to package that expertise into these domain models, accelerators, frameworks, or business content templates that we deliver as part of the packaged solutions.

Oracle’s doing the same thing. A couple of weeks ago, they had a similar announcement about domain models that they’re delivering into various verticals and horizontals. SAP is doing likewise with the xApps and so forth. That’s really what it’s coming down to -- domain models and deep expertise.

Gardner: So, if it has a lot more to do with expertise, with feet on the street, with consultants and consultancies, let’s take a look at the HP announcements.

Tony, you also wanted to give us a little overview there. HP came out and said, "We’re going to be folding in more of the Mercury acquisition, the Systinet acquisition. We’re going to embrace this notion of Business Technology Optimization, BTO, as a go-to-market." They’ve also decided that they’re going to remain neutral. They want to be Switzerland. Of course, many of these vendors profess to be neutral, but I think HP has to be neutral, because it doesn’t have a lot of the SOA pieces. Isn’t that right, Tony?

Baer: Yeah, and if you and I had a penny for every time a vendor called themselves Switzerland, we probably would be too rich to be doing these calls on Friday mornings.

Gardner: We’ll have to have a Swiss bank account.

Baer: That whole neutral stance shows that HP is unique in not trying to verticalize its SOA. The announcement that made an impression on me was the Business Availability Center, which was the old Mercury piece. It will include some functionality from the OpenView side, which has been something most of the vendors in these systems and SOA runtime governance space have had a hard time dealing with up until now.

I wrote about this some time ago. It’s called the "blood-brain barrier." When you’re trying to manage a service level or a governance service level at run-time, part of it deals with what type of service. Are we giving this customer the current version, are we adhering to the policy? A key part of that is how this thing is going to rely on what happens physically in the data center, and these SOA governance pieces just have lacked that.

That was actually one of the things that I’ve been waiting for after HP announced it was acquiring Mercury -- or putting it out of its misery -- whichever way you want to interpret that. I need to drill down on this more and get some details of what exactly the piece was about. I haven’t had a real detailed briefing on it yet, but that was the part that really made an impression on me.

Gardner: HP is basically coming out and saying, "Here’s where we’re strong. We’ve got OpenView. We’ve got governance. We’ve got tools and registry and repository. So, we think that that’s fundamental and important. We’ve also got professional services. Our consulting and integration group, which is global, has vertical expertise, and also works diligently at these major consolidation trends, application modernization, ITO, shared services, and some other major trends and projects that cut total costs and improve agility."

What’s interesting, though, is that we’ve seen a combination of either larger integrated suites that provide the means to achieve SOA or we’ve seen individual parts, best-of-breed approach. We've seen people jumping up and down and saying, "Hey, we can do it better than anybody else, and we’re green fields, so we can move quickly, and we can be pure in terms of a services orientation."

The big question for HP now is, "How are you going to fill the middle? Are you going to be Switzerland, are you going to partner, are you going to acquire?" There's talk about BEA being out there as a possible target for acquisition, and this is at least the fourth year of that we’re in now. Then, there’s also the open-source side. There are a number of projects and providers that could, with HP’s assistance, really make open source and SOA a much more powerful activity.

Before we go further into this analysis, let’s just look over one last announcement this week. Todd Biske, did you just join the call a few minutes ago?

Todd Biske: Yes, I’m on.

Gardner: I would like to introduce Todd Biske. He is an enterprise architect at MomentumSI, an Austin, Texas consultancy. Welcome to the show, Todd.

Biske: Thanks, I apologize for being late.

Gardner: Not a problem, because the timing is perfect. You sent out an email to us this week with some thoughts about the Salesforce.com and SOA activities. Would you tell us a little bit about what Salesforce did, and why you thought it was interesting?

Biske: Salesforce.com announced what looked like a development platform for not just using their Web services, but consuming other Web services. I thought it was particularly interesting, because from an enterprise perspective you think of going to Salesforce.com for more of an outsourcing or software as a service standpoint. I’m a consumer of those applications. To think that they’re now opening themselves up as a development environment for their solution customers, made me raise an eyebrow and say, "Well, wasn’t I trying to get away from doing development by going with this solution?"

So, it had an interesting twist to what kind of a model the enterprise is moving to. Is there still always going to be a need to integrate and build custom solutions around these products, regardless of whether it’s a hosted environment like Salesforce.com or if it’s an off-the-shelf solution and I’m installing inside the firewall? Now, are we going to have to support both internal development environments as well as external development environments in order to get our solutions done?

Gardner: I suppose it’s a slippery slope. Once you become integrated with the internal components, assets, and resources, you’re going to have to get involved with tooling. There’s no way around it.

Linthicum: Absolutely. I was quoted in that release from Salesforce, and the strategy is a bit more sophisticated than that. What they’re trying to do is provide some of the patterns that we typically see in SOAs within the enterprise, which is to create solutions out of their own processes and processes that exist within the enterprise, and also provide a development environment to bind things together.

This is a bit more holistic. They have a virtual operating system out there supporting multi-tenancy. They have a database out there. They have an application design center, a testing center, and language that they’re supporting. They’re trying to provide not only applications, but, as complete as they can, a service-oriented stack on demand. As time goes on, knowing Salesforce, they’re just going to get better at that.

Gardner: So, would you call this "infrastructure as a service?"

Linthicum: It would be a complete platform-as-a-service inclusive of an SOA. In other words, instead of you maintaining hardware and software yourself, having to get servers, application servers, governance systems, and all that stuff, they’re trying to move to where you’re going to get a lot of this stuff through a subscription-based service. This means that a lot of people will have a much more cost-effective mechanism to get into SOA, which is a rich man’s game right now.

Gardner: I suppose this also requires integration of the service. One of the things that I had CEOs chirp on, when I sent out a couple of queries on this, was they'd like the idea of keeping the data themselves, but making CRM and these other business functions commoditized through a service provider. They seem to now sense they could get it both ways.

The reason I also brought up integration-as-a-service is that it sounds like what Grand Central was talking about a few years ago, and you’re familiar with that.

Linthicum: Absolutely, and not only Grand Central, but Bridgeworks and Hubspan and a few other folks. The difference is that you have the services and the processes, which are also bound in the same platform. Another difference is that people in the market are going to be more accepting of this technology right now than they were five years ago.

Gardner: So, I think we have three different announcements here, but there’s a common thread. As Tony mentioned earlier, the common thread is that the definition of a business application is up for grabs. Is it a professional service? Is it a custom development activity? Is it taking packaged applications, exposing them as services, and then compositing them with other, perhaps off-the-wire, services, and/or internal green field services -- or all of the above. Let’s take it to Joe McKendrick. How do you see this notion of a new definition of business application shaking out?

McKendrick: Tony provided an analysis on the OnStrategies site. He made an interesting point there that IBM is still trying to sort out who SOA should be sold to? Who in the organization will be ultimately responsible for SOA? Will it be the traditional IT development folks, architects, or will it be more of a focus on the business side?

Gartner, in one of its future-looking statements, stated that a lot of the traditional IT functions, or IT as we know it, will be moving into the business. Business units will be subsuming or taking on the task traditionally performed by a dedicated IT department, which implies that, as time goes on, you’re going to see IT more tightly integrated with units across the business. Therefore, that raises the question of, who is going to be doing the hard-core development, the heavy lifting, in terms of application development? A lot of the solutions that are coming to the fore are increasingly emphasizing automating the development process.

Gardner: Your point here is well taken, Joe. If you’re going to start changing the definition of a business application, then you also have to start changing the way in which people are involved with creating, modifying, and deploying, those applications and/or services as well.

That was another big theme we saw at the IBM Innovate event, this notion of a "T Person." They have across the top, on a horizontal basis, a strong business and domain expertise, particularly within a vertical industry, if possible. They also have the stem, the vertical part of the T, which is a strong understanding of technology, as a practitioner, a developer, or an architect.

One of the recurring themes was, "Where do you find these people?" If you go out to some of the job-listing sites and search under "SOA Architect" right now, you’ll find begging to be filled dozens, probably hundreds, of jobs that combine a domain and business expertise with a technical background. That's an indicator that something is shifting in the market.

Let’s go back to Jim Kobielus. Do you think that this a transformative and highly disruptive effect, this notion of changing the definition of an application, and having to change the way in which applications are created?

Kobielus: Oh, for sure. In fact, as you were speaking, I was thinking that what these announcements this past week illustrate is the changing definition of what an application is. One way that we might define an application now is an SOA platform plus domain content. So, the differentiators are not only the maturity of your SOA platform -- be it IBM's, Oracle's, or Salesforce.com's -- but also the breadth, depth, and extent of the domain content available to plug in to that platform and address specific business requirements.

Where does the domain expertise come from? Well, it can come from your own -- you the vendor -- your own global business services or professional services team. It can come from your partner ecosystem. You might have hundreds and thousands of partners in various niches.

In the case of Salesforce.com, it can come from your marketplace of thousands upon thousands of companies that are hosting this content in your own environment. It can come from an open-source community for an open-source platform like Red Hat, and so forth.

These are all hugely disruptive. The thing is, the traditional notion of an application is a very monolithic stack, a platform-plus-content, shrink-wrapped, delivered, and boom, that’s it. It's not really fully extensible with third-party content. Now, the whole notion of third-party content comes to the fore. A platform is only as good as the breadth of the ecosystem, community, or marketplace that can deliver new fresh business content, data definitions, rules, etc.

Gardner: What’s interesting from IBM’s perspective is they have strengths in just about all these areas, and this is really their game to lose. While SOA right now might be a rich person’s game, that suits IBM just fine. They want the big accounts. What we were hearing, Tony and I, in this meeting was that the more instances where IBM can go into a vertical domain-oriented account, the more they learn from that experience that they can push back out as componentized services, which they then take to the next engagement.

What happens is that there's a sort of race now. IBM has basically drawn a line and said, "We’re now in a race. Whoever can get to the combination of infrastructure and customization and professional services with a domain accent first, wins." In a sense, they’re competing against the IT departments, as well, because in these large enterprises, these IT departments take 12 to 16 months to put together a full set of new business processes. IBM can walk in and say, "We can reuse a king pin. We can do it in half the time." What’s the company going to do? The company is going to start favoring the IBM approach over its internal IT approach, which is what Salesforce is offering as well.

Kobielus: The game now is expertise-on-demand. Who could provide that expertise to bear down on a business problem right away? I mean, which vendor.

Gardner: And who can take advantage of past experience, breadth, and the coordination of different projects? That’s what this IBM Jazz thing is about, by the way. This Rational Development Conference announcement that’s coming out in June is a way of coordinating all of these different projects in such a way that reuse becomes possible. I think IBM is doing this largely for its own internal purposes, as well as a community basis. It’s a combination of business expertise, but also the ability to do things fast through reuse, which is what SOA is all about.

Biske: Dana, you were at the conferences. I’d love to get a sense of how many of the customers at the conference were strong IBM customers, Big Blue shops with mainframes, eSeries, iSeries?

Gardner: These were clearly dyed-in-the-blue kinds of folks, but the rate at which they’re moving and their interest in SOA is the issue.

Biske: Also, IBM has a stake in moving these customers forward. It has this installed base, very much a legacy base, and there are some arguments out there about how well services created from legacy applications can be reused. Ronan Bradley, with Lustratus Research, has argued in the past that services generated from Cobol-based applications, zSeries for example, are difficult to put forth in a SOA context for reuse.

Gardner: IBM has done some work along those lines, but they have a wide variety. As they go into these accounts on a professional-services basis, they’re not just looking for IBM applications. They’ll take anything.

Biske: A lot of this is a WebSphere story.

Gardner: Clearly, IBM is putting up the software to accomplish just about anything you want to do in an enterprise, but it’s the way in which they’re taking SOA to market and realizing SOA. Dave Linthicum, what do you think about this notion of a raised SOA, and that the people who can combine domain expertise, professional services and reuse are not only going to try to beat out other players in the field, but also the IT departments themselves?

Linthicum: That’s absolutely the strategy here. What I’ve been listening to is spot on. Everybody is trying to own, not only the domain of the technology, but the domain of the IT infrastructure within these organizations. In fact, I just got a briefing this morning for something that was embargoed for a few weeks. They’re really trying to displace traditional IT. The analogy to Salesforce.com was spot on. In other words, Salesforce.com kind of got in there through the back door, allowing people to buy their infrastructure via credit cards.

I think IBM and some of the other strategic thinkers in the space are trying to run as quickly as they can to grab land right now, because the more land they grab, the more they can hold for a long period of time. Everybody on this call knows, it’s a great business to be in -- the infrastructure game -- because once you’re in these organizations and you’re adding value there and you're core to their business processes, you’re never going to leave.

Gardner: IBM clearly sees that they want to be partners with these companies. They don’t want to displace IT, but they want to get in a way that you can’t, as you say, be removed. Todd Biske is someone who is in the consulting business. You probably want to get into accounts where they can’t get rid of you either. Is this a good business strategy for IBM?

Biske: I think it is a good business strategy for IBM, but one of the comments I was just going to make, and you actually just hit on it, is that I don’t know that IBM can come across with a strategy of replacing IT. I absolutely agree that the business side needs to work with IT as partners. We need to establish this "T," as IBM put it, where we’ve got technical depth, as well as business depth, and a team that really embodies both of them. The only way to do that is going to be through a partnership, rather than having this customer-supplier type of relationship between the business and IT.

I’ve actually blogged on this, even prior to becoming a consultant and talking about what's going to be the role? I saw this convergence of business consulting areas, whether it was Six Sigma-based or some of these other initiatives from years ago that were primarily business focused with the IT consulting services part of it. Just as IT workers in the enterprise need to become business aware, so do the consulting firms. Having a business offering, where you have focus on the domain models that have been discussed, is critical both to the consulting vendors, as well as the actual technology vendors.

So, IBM is in a great position, where they’ve got both. They’ve got the whole technology stack. They’ve got the whole consulting stack on top of that, and the business domain expertise, whether they’re doing the peer technology side of it or the business domain modeling and providing all of the business consulting. If they’re going to get into a situation, though, where IT is outsourced, now they've got this customer-supplier relationship again. To what extent can business really partner with that group, and how comfortable are they going to be putting all their eggs in the basket of an organization that may be trying to do this with too many enterprises and can't create that competitive difference?

Kobielus: What's interesting is that this platform land grab -- I like the phrase you used there, Dana – extends on top of your SOA platform. One of the linchpins of any SOA architecture or application environment is your data warehouse. On top of that you build your business intelligence. On top of that you build your corporate performance management. On top of that you build your governance risk and compliance tools, and so forth. Each of these layers requires additional business content and domain models. Each of these vendors, at least in data management, are continually migrating up the stack by layering ever more finely nuanced business content on top of this underlying SOA platform. Then, using those business content-rich applications as a platform for their professional services, teams, and partners, they go out and market these packaged solutions into ever more finely graded niche markets.

Gardner: Do you think that in five years, if we look at some of these leading-edge, large global enterprises, their IT departments are going to become operational efficiency experts? They’re going to take whatever it is that’s been decided on to keep running. And, they’re going to figure out the best way to virtualize, consolidate, unify, and modernize to keep those things running the best way they can for the least amount of money. That the new role that companies like IBM and these other SOA business services-focused companies will find to add value -- how to innovate, how to create new business processes.

So, it’s almost taking on the role of the SOA architect, recognizing that the companies themselves can’t pull this all together. They’ve got some high-performing custom development capabilities. They’ve got packaged applications. They’ve been fumbling around trying to figure out integration for five or seven years.

And, now IBM and others can walk in and say, “Well, listen, we’re going to rationalize this for you. We’re going to show you how to innovate around compositing. We’re going to reuse what we know and we’re going to be really tight with you in your vertical industry.” So, it seems like a new role, it’s like not outsourcing IT per se, but it’s outsourcing the role of innovation, and architectural innovation.

Kobielus: Exactly. I see the whole area of composite applications built on SOA, in terms of professional services teams, as the primary delivery channel for these solutions. The productization, as it were, of professional services is taking place through the concept of the center of excellence. Every vendor has multiple centers of excellence now, each of them focused on a particular horizontal or vertical space. Over time, then, as we see more of a momentum and more of the premium margins shifting to professional services, the centers of excellence are now the product groups now in an SOA vendor organization. They’re the stewards of the domain content, domain models, and expertise.

Gardner: If there is a more finally grained approach to these verticals, then they can create the ecology where they’ve got individual consultancies that are even more down in the weeds on these vertical business issues, and they just partner with them, while IBM and its ilk just associate those services in with this business compositing capability.

Biske: That may be an appropriate strategy for IBM, It would be somewhat risky for a large enterprise to take the approach of outsourcing innovation. I would think the business is going to want to outsource things that are not going to be competitive differentiators. Innovation clearly can’t be a competitive differentiator, if you’re saying “IBM, just give it to us.” Guess what? All of your competitors are going to be saying the same thing. So, how do you create a difference out there?

Innovation needs to remain inside the enterprise, looking at those vertical areas. It may not be technical innovation any more. It may be a shift back to where the driver is more business-process centric. Technology is just a supporting aspect of that. Then, maybe another 10 years from now, it will shift back with some new technological change. That’s just the way things work, but to outsource innovation would be a very risky approach for a large enterprise, because inherently it’s not a commodity.

Gardner: That’s a point well taken. Perhaps if the enterprises were smart, they would view a company like IBM coming in to teach them how to innovate, or learn how to fish, rather than have someone fish for them, and therefore take the next step, but I think the race is on. IBM is challenging people, “If you let us do this first and best, then we’re going to make the economics such that you can’t resist that.” That’s a challenge to the companies to take your advice and say, “Listen, we can’t lose track of our core competencies around innovation and we need to start thinking about SOA more seriously.”

[[[Speaker:]]] Right, and maybe they’re taking advice from the Tom Watson Playbook from many years ago. IBM, when it started in the computer business back in the 1950s, positioned themselves as a consultant to the business. They did not position themselves as a technical firm, such as Sperry might have done, or DEC in the early days.

Gardner: Well, they certainly took pains at the Innovate event to portray that they are a business-partnership company and the technology is merely a means to achieving that. Let’s take a look now at the field. How many companies can actually come up to the plate with the broad set of services to be a full SOA partner? I would say this is probably the big four. We have Microsoft, IBM, Oracle, SAP. I suppose now there’s a question mark about HP. How is HP going to rise to be the full player, and will they do it through the Switzerland, open-source approach? Will they do it though acquisition?

We also need to look at SAP as to how they are going to do this. We thought they had a strategy around more of a services approach and NetWeaver. Then, Shai Agassi left, and there was an interesting story in the Wall Street Journal where Shai said that the innovation doesn’t seem to be happening at the right pace. Any thoughts there about how we handicap the field, given this move towards the larger definition of SOA under the business services umbrella?

Speaker: [[[Todd Biske]]] You’ve captured it with really the top four, I can’t think of anybody else that comes to mind. In one of the articles talking about the HP release, Anne Thomas Manes pointed out that HP is a management company from the technology side. Unless there is a partnership with someone that can fill that middleware gap and the development environment, they don’t have the full story. It doesn’t necessarily have to be through acquisition, because there is a multitude of open-source products out there, but if you look at the Java side, everybody is pretty much using Eclipse. Who is the biggest backer of Eclipse? Well, it’s IBM. So, in trying to get an advantage there, IBM still really rules the roost and has significant influence in that direction. You nailed it, though, in terms of there really is a small set of players who can bring that much to the table.

The other space to look at would be: Who can come at it purely from the business and technology consulting side of it to build that on? Maybe it’s not strictly a technology player. Maybe it’s someone from the consulting side and someone from the consulting firms.

Gardner: There’s the rub. What will these SIs do? What about Accenture, EDS, CapGemini, and BearingPoint, and the Indian companies like Tata and Infosys -- or even another higher level consultancy like a McKinsey? Who are they going to partner with. They don’t want to lose this ability. Folks are working with how to organize the management, the actual conduct of how a company operates -- which we could probably put under governance generally. How does that relate to technology? So, the other shoe to fall here is, as these companies that are outside the pure technology space look at the technology companies moving in towards the business services space, how will that shake out? Dave Linthicum, any thoughts on that?

Linthicum: Basically, the large players are going to have to have an impact in terms of the technology sector. The service stuff is going to augment the technology, and they’re going to drive in this area. The larger consulting organizations are behind right now in how they’re defining and deploying SOAs. I’m always taken aback, as I walk around my clientele and review some of the proposals from these larger guys, by how much is missing from their strategy and the lack of understanding of how this stuff is going forward.

What may happen is that some of these large-stack players -- IBM is definitely included in that -- are going to come behind and eat their lunch. Some of the smaller consulting organizations are also going to do the same thing. They may protect themselves through acquisition and within these organizations, so they can control a lot of the political infrastructure, who makes decisions, and how you buy services from these folks.

At the end of the day, enterprises are about results. If their competitors are able to jump by leaps and bounds, using somebody’s technology or somebody’s approach, they’re going to go with that technology and approach. The big consulting organizations have a long way to go in really understanding the value, processes, and methodologies, and how you define those things within those organizations.

Gardner: Because of these three announcements, because of the influence that IBM has across the industry and across the globe, we have a little seismic shift here this week in raising the stakes to the business services level, and perhaps highlighting some of the new competitive relationships among and between these companies.

As the vendors themselves face new types of competition, enterprises also have to consider whether it makes sense to try to save a few dollars and push SOA initiatives off into the future, or that their ability to do SOA sooner than later might put them in an advantageous position, or, as someone said earlier, not to lose their ability to innovate.

So, let’s go around the panel one last time. Do we see a seismic shift, and do you really think the landscape has changed? Let’s start with Joe McKendrick.

McKendrick: I just want to add one more vendor. You mentioned the big four, but BEA Systems should also be one of the bigger SOA movers and shakers. They offer a wide range of products including the development side and the deployment side.

Gardner: Of course, they’ve also mentioned this neutrality and Switzerland approach, where they would be a preferred partner to the Accentures and the other large system integrators because there is not this "co-opetition" affair.

McKendrick: One thing I’ve seen in Microsoft statements in the past, is that they take a contrary position to what the other large infrastructure vendors say about SOA. Microsoft says SOA should not be about big science. It should not be big SOA, huge multi-million dollar deployments, affecting organizations, but rather more of organic or gradual incremental approach on a case-by-case basis.

Gardner: Their application strategy sort of follows along those lines.

McKendrick: Exactly. In fact, their history follows along those lines. They’ve always kind of seeped in at the grassroots level within organizations, and moved up the chain that way. I see them doing that with SOA as well.

Gardner: Okay, Jim Kobielus, do you sense a seismic shift here. Has the game changed in anyway for you?

Kobielus: It has, and I sort of laid out how it has changed. Deep-domain expertise is being incorporated into a new type of packaged application that to some degree competes with or complements traditional line of business applications, corporate performance management (CPM) applications. Over the last month, there has been a rash of industry announcements, acquisitions, and so forth related to CPM -- SAP acquiring OutlookSoft, Oracle with Hyperion, Business Objects, -- and Microsoft of course. I want to get back to Microsoft. They are very much a major SOA player.

What Joe just said was instructive about Microsoft. They are always ingratiating themselves. They’re always weaving their way into an organization from the ground-up, and they’re doing the same thing with CPM, with Office Performance Point Server, which is coming out in a few months.

When I was at their business intelligence (BI) conference, I spoke to Alex Payne who heads up the BI unit and I asked him point blank, “Does Microsoft, plan to develop verticalized CPM applications to run on Performance Point?” He said, “Well, we want those applications to be built and we’re gong to rely on our channel partners, on the ISVs and so forth, who have that expertise.”

So, getting back to your original point, yes, the move toward domain models and so forth, as a way of differentiating solutions, is disruptive in the sense that the traditional application is dissolving and being replaced by composite services. But, it’s not really changing the vendors themselves in the sense that each vendor has their own history, their own character that’s coming to the fore. In this case, Microsoft’s character is to be a provider of ubiquitous infrastructure at the desktop. They are not a professional services firm, and I don’t get the sense that they’re going to get beat in global services. They’re going to rely on the third parties, the Accentures of the world, for that.

Gardner: Interestingly, at the keynote event, Steve Mills, the software general manager and vice president at IBM, referenced some research. I’m not sure whether IBM sponsored the research or not, but it defined SOA-related revenues. Number two, after IBM, was Microsoft, albeit a fourth of the total number of dollars that IBM cites, but clearly Microsoft is big in this game.

Now, to you, Dave Linthicum, game changing week, how do you see this impact?

Linthicum: I don’t see this as a seismic shift. I see it as an evolution in thinking and the way people are positioning the market. The hype out there is so loud that people are just trying to figure out how to out-innovate each other in how they message to the marketplace -- this is an instance of that – and in the products and services they’re going to bring to market, and how they’re going to dominate those. It’s the point that was made earlier; it’s a land grab.

Going forward, one of the key things to remember is that we’re evolving an enterprise application to service-based distributed systems, where you can actually use composite applications to meet many of your business process needs. That’s only going to continue, especially as people outsource business processes to folks like Salesforce, who are moving from monolithic enterprises-on-demand to granular services they’re going to sell very much like Amazon is selling services today, and making a lot of money in making that happen. That’s going to be a key thing.

We always return to the domain verticalization stuff within any technology push. Remember when the integration was the hot issue back in 1998, 1999? When I wrote the AI part, everybody was almost saturated with technology in terms of hype. Everybody started moving in the vertical spaces, and verticalized integration was all the key. We’re seeing a similar pattern here. Probably we’re spending more money, and the hype is noisier than it was back then, but it’s the same thing. I think it’s a good thing, because you can meet the needs of a particular problem domain, if you verticalize and you have specialized processes and services to drive that. But, it’s nothing new. I don’t think it’s hugely disruptive -- just the evolution that I expected.

Gardner: Tony Baer, do you see this as IBM defining the world as best suits IBM or more of a larger shift in the market?

Baer: I’m going to be a classic straddler here -- it’s really both. IBM is obviously playing up to its strength, which is that it’s the glue that puts pieces together.

It’s very much a challenge to what was the established order for about the last 15 years of the primacy of the monolithic apps vendors. There are a couple of things I was just jotting down during the discussion. If SOA and composite apps are to succeed, they’re not going to succeed by being consultant ware, the type of stuff that can only be put together on a custom piece basis. The whole idea behind SOA is this is stuff that you can put together very rapidly.

So, obviously, there will be a role for professional services here, but they need to be enablers so that my team internally -- whether they be business architect or whichever role that evolves -- can readily combine and configure different composite services to deal with a particular challenge or as I introduce a new product. I’m talking about a product in the classic, manufacturing sense. I’m not talking about an IT product. So, the fact is, if SOA is to succeed, it will not succeed as being consultant ware.

Gardner: I agree with that. What we might need to see in order to hedge or balance the power of the consultancies is the equivalent of open-source composited services. One of the things I asked IBM, after the discussion about business services was, “What do you guys do about IP, Intellectual Property?” They said, “Oh, that’s one of the first things we talk about, and we bring lawyers in every time we’re getting engaged with a client. We have to decide if they want the IP, and, if so, there is a certain cost associated with that. If we get to keep the IP, that is, we can create services that will be then reused elsewhere, then the cost comes down.”

So, what might need to happen is a third way, where when people get engaged with companies like IBM, and they’re going to do compositing of business services. Perhaps they say, “We want to put this intellectual property under an open-source license, and we’re going to use it in a commoditized sense. Then, we’re going to highly customize and we’re going to take that and make it our own intellectual property.”

Perhaps the way to make this whole SOA business-services thing work is licensing around those composite services, so that it’s not just a competitive hedge or some sort of a balancing act. I’m just blue skying at this point, but it seems like a licensing of the property around these services is going to become important.

Let’s go to Todd Biske for the last word, seismic shift or just more IBM market positioning?

Biske: I tend to agree with Dave on this one. This is just an evolutionary approach, and IBM’s marketing is making some significant rumblings that are making people more aware of what’s going on. I’ve been thinking about this at least for the last couple of years. I’m seeing it coming, and no, I’m not the only one who is thinking along these lines. This is just part of a natural progression that we’ll see with this. Whenever any of those big four or big five vendors have a major sales or user conference, we’re going to see announcements like this as they try to position themselves better in the marketplace.

So, I do think that it’s evolutionary. I think it’s good and it’s the direction that things need to go in, but the hype will die down after a little while, and most people will still keep trudging along. I would still like to see more case studies out there, showing concrete success, where the adoption of SOA has really created a true change in the organization. A lot of the case studies we see today come from companies that were already well positioned to be successful, and they have just extended their model in an evolutionary manner.

Gardner: Obviously, we’re still very early on. Maybe we went from the first inning to the second inning in this, so a minor transition. But, I think the takeaway is that IBM has made some moves that then force people to think a little bit different, which, of course, gets us a little closer to making some of this happen in the enterprise. I want to thank our panel for joining us. We’ve had Joe McKendrick, thanks Joe.

McKendrick: Thank you Dana.

Gardner: Jim Kobielus, thanks for joining.

Kobielus: Thank you, it was a pleasure like always.

Gardner: Dave Linthicum, thank you for coming.

Linthicum: Thank you, you guys, have a great three day weekend.

Gardner: Tony Baer, thanks for your input.

Baer: Well, thanks again Dana.

Gardner: Also, Todd Biske, thank you.

Biske: Thank you.

Gardner: This is Dana Gardner, principal analyst at InterArbor Solutions. You’ve been listening to BriefingsDirect SOA Insights Edition, Volume 19. Come back next week. Thanks, everyone.

Listen to the podcast here.

Produced as a courtesy of Interarbor Solutions: analysis, consulting and rich new-media content production. If any of our listeners are interested in learning more about BriefingsDirect B2B informational podcasts or to become a sponsor of this or other B2B podcasts, please fill free to contact Interarbor Solutions at 603-528-2435.

Transcript of Dana Gardner’s BriefingsDirect SOA Insights Edition, Vol. 19. Copyright Interarbor Solutions, LLC, 2005-2007. All rights reserved.

Tuesday, July 17, 2007

BriefingsDirect SOA Insights Analysts on the Semantic Web, Abode and Open Source Flex, and the Future of UDDI

Edited transcript of weekly BriefingsDirect[TM] SOA Insights Edition podcast, recorded April 27, 2007.

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

Dana Gardner: Hello, and welcome to the latest BriefingsDirect, SOA Insights Edition, Vol. 17, a weekly discussion and dissection of Services Oriented Architecture (SOA) related news and events with a panel of industry analysts and guests.

I'm your host and moderator, Dana Gardner, principal analyst at Interarbor Solutions, ZDNet blogger and Redmond Developer News Magazine columnist. Our panel this week, and this is the week of April 23rd, 2007, consists of Joe McKendrick.

Joe McKendrick: Pleasure to be here, Dana.

Gardner: Thank you for joining us, Joe. Joe is a research consultant, a columnist at Database Trends and a blogger at ZDNet and ebizQ.

Also joining us today is Jim Kobielus. He is a principal analyst at Current Analysis. Welcome back Jim.

Jim Kobielus: Thanks a lot Dana. Hi everybody.

Gardner: We are also joined this week by Dave Linthicum. He is the CEO of Linthicum Group. Welcome back, Dave.

Dave Linthicum: Thank you very much, Dana.

Gardner: And last, but not least today, Todd Biske. He is an enterprise architect with MomentumSI, an Austin, Texas consultancy. Thanks for joining us Todd.

Todd Biske: Thanks for having me again, Dana.

Gardner: We’re going to be digging into a few topics today. The first, the Semantic Web. We’ve heard quite a bit about Web 2.0+, perhaps even Web 3.0, the whole notion of a more intelligent web, something that provides things in an automated fashion with some intelligence. Of course, there is going to be more than one definition of Semantic Web, and we are going to dig into that too.

Second, and in a possibly related area, we’re going to discuss Red Hat's acquisition of MetaMatrix. There’s also some other news by Red Hat this week about some bundling and a concentration on SOA and it’s values.

Last, or perhaps third, I saw an interesting post by Joe McKendrick this week, something around IBM dissing UDDI and calling for new standards. We’re going to ask him about that. And also, Dave Linthicum had some posts this week in his blog about a Gartner study and the good news and bad news about SOA. We’re going to ask him to fill out that topic a little bit.

But, let’s dig into the first issue of the day. This was brought up by Jim Kobielus, the whole notion of Semantic Web. It’s been perking up on the radar and showing up in a lot of different places. We wanted to see if there’s anything new going on and if there’s any convergence with what we refer to as Web 2.0 and even Enterprise 2.0. So, let me first go to Jim Kobielus. Jim, why are you interested in the Semantic Web and how would you define it?

Kobielus: Well, Dana, I'm like everybody else on this call. I've got a very reptilian, scaly, analyst skin, and so I'm a bit cynical about the notion of a Semantic Web, as many are, but nonetheless, the topic keeps coming back to the surface. I saw a couple of articles in the past two weeks, in which the topic of the Semantic Web got trucked out again. This time, I saw one article where it was called Web 3.0, and I thought, “Oh, my Lord, we haven’t even decided that we are all in agreement on the notion of Web 2.0.”

So Semantic Web, as a concept, is still in play, and as you are probably all aware, the term was essentially coined or popularized by Sir Tim Berners-Lee, the inventor of the World Wide Web. There is an activity at the World Wide Web Consortium that’s been going on for a few years now to define various underlying standards and specifications, things like OWL and Sparql and the whole RDF and Ontologies, and so forth.

Gardner: On the standards list is also the IP, the Internet Protocol Version 6.0. That’s in that mix as well.

Kobielus: Right. It’s still in play as a concept, and people are still energized to invest it with meaning and substance. So, what is the Semantic Web? Well, to a great degree, it refers to some super-magical metadata description and policy layer that can somehow enable universal interoperability on a machine-to-machine basis, etc. It more or less makes the meanings manifest throughout the Web through some self-description capability.

It’s a "boil the ocean" type of initiative, and it’s been going on for a few years. Of course, when you boil the ocean, you generally get a lot of plankton. So, is there anything useful in this plankton that’s been boiled out of the ocean of Semantic Web? I think there is something, and I am not going to bring in the whole notion of Web 3.0. It’s a distraction, unless you’re going to tie it right back to this week’s news.

As you mentioned, one thing that happened this week was that Red Hat, the open-source company, announced its intention to acquire a company called MetaMatrix. MetaMatrix is in a niche of the data management arena that’s often called either EII (enterprise information integration) or data federation. They're not the only player in this space. There are many others, IBM, Business Objects, Ipedo, Sybase, Composite Software. Many of these have EII products and what they all do is provide a semantic layer that essentially virtualizes and abstracts heterogeneous data resources, mediates data dynamically on the fly, and presents that data in a unified data model or structure to end users.

Gardner: Jim, this is stuff that's being done inside the firewall and primarily on premises and within enterprises, right?

Kobielus: Yeah, primarily it’s being done within enterprises, but to varying degrees it’s being done across B2B environments as well, where you have diverse data on your ERP system. You have your line-of-business apps, transactional databases, web sources, and so on, and you’re not consolidating that data into a data warehouse. Rather, you're leaving all that data in the source repositories and dynamically mapping it to composite, unified views. What I am getting at is that there are a lot of vendors of these EII products that provide a semantic layer. Probably, the most widely used is Business Objects. They call it "Universe" capability. So, to some degree, this sounds like the Semantic Web.

Gardner: Now, hold on. Shouldn’t we again go to that point? Shouldn’t we call it the Semantic Intranet? It’s not really Web. It’s not standard. It’s not taking information off the Web. This is usually data and information that’s within the confines and control of the organization.

Kobielus: The World Wide Web, as a phenomenon, really took off when it was adopted inside companies in their intranets. So, the whole notion of a "semantic Web," to the extent that we can all agree on a definition, won’t really come to the fore, until there is substantial deployment inside of enterprises. I agree with you there.

Conceivably, these EII vendors are providing a core piece of infrastructure that could be used to realize this notion of a Semantic Web, a way of harmonizing and providing a logical unified view of heterogeneous data sources. Red Hat, one of the leading open source players, is very geared to SOA and building an SOA suite. Now, they are acquiring an EII vendor, which itself is very SOA focused. So, you’ve got SOA; you’ve got open source; you’ve got this notion of a semantic layer, and so forth. To me, it’s like, you’ve stirred it all together in the broth here.

That sounds like the beginnings of a Semantic Web that conceivably could be universal or “unversalizable,” because as I said, it’s open source first and foremost. The super-distribution model of open source, a la Red Hat, will conceivably propel some sort of Semantic Web into universality. I think this is an important event. Anyway, I want to hear what everybody else on the panel thinks about this notion.

Gardner: Now, hold on for a second here. You are the pessimist on this topic. So, I can hardly wait to hear the optimists. Furthermore, I just want to remind our readers that in the past on this show we've discussed the importance of a data-services layer. We should perhaps make that a priority even over other SOA activities or oriented activities, so that you can access data regardless of its origins and across different services and business process activities. So, we've been on top of this notion of metadata and a data-services layer as an important element moving towards SOA activities. Now, let’s throw it out to the group. Is anybody else a pessimist on this topic of the Semantic Web and whether that would evolve from SOA and internal enterprise activities, and then percolate beyond?

Linthicum: I'm a little confused about why it has taken us so long to realize this, because it’s been around for such a long time. I was just doing some Web searches, and I wrote some pieces three or four years ago around the Semantic Web and it’s use and play in both integration and SOA. I was kind of taken aback at the time that no one really cared, because I thought it was a very valuable notion. If we build on this, it does solve a lot of key problems. You end up dealing with universal semantics, how that relates to B2B domains, and how that relates to the enterprise domains.

As I'm deploying and building SOAs out there in my client base, semantic mediation ultimately is a key problem we’re looking to solve. This is the point you just made Dana. We have to have a better grasp on the data, how to extract that data into data services, and then apply those data services into our SOAs.

Gardner: Do you think that there is an opportunity for a standardized approach that would, in fact, encompass the World Wide Web, rather than this being done piecemeal, company by company?

Linthicum: I think so, and I think there are a couple of opportunities here. We like to test things out on the Web and then drive it into the enterprise. There are a number of instances of that. Even the AJAX deployments I see today are more enterprise based than Internet delivered based, and the same thing will happen with the Semantic Web. It’s a key, universal standard that lots of people are accepting. People are going to vote through the usage of it, ultimately figure out if it's going to have value on the Web as an inter-company thing or Internet universe thing, and then drive that into the private SOAs that people are building.

Gardner: How about you Todd Biske? You seem to come down on the side that practicality is paramount, and that the people don’t use it, regardless of how elegant and visionary it might be, if it's for naught. Do you have, a particular position on the pessimism meter on this?

Biske: I’m going to take my usual, pragmatic approach with this. First off, I agree with Dave that semantics is a really a critical piece in being successful with SOA. And I challenge the notion that you’re going to run into it whenever you’ve got these data-integration scenarios, whether it’s B2B or completely internal to the company. The issue that we run into is that it's still a very specialized discipline. There are a number of people, and I am not one of them, who really understand the technologies behind it deeply, and are continuing to push forward, but they haven’t yet found a way to really have it make sense to the average developer.

The average developer is still focused on the functionality of the business solution that they're providing. They know that they may have data in two different formats and they view it in a point-to-point fashion. They do what they have to do to make it work, and then go back to focusing on the functionality, not really seeing the broader semantic issues that come up when you take that approach.

It’s no different than just building out an SOA. People are still thinking in terms of their silos, and not thinking outside of the box and how it’s going to impact things in a long-term fashion. So, until we are able to have this hit home to the developer community, and really have them understand how they can take semantics, they can take that metadata, incorporate it into their development processes. It’s still going to be a very slow go.

Gardner: Well, that relates to another recurring theme here on BriefingsDirect SOA Insights Edition, and that is, “Should developers who are in the weeds be the drivers on this, or is this an architectural, strategic-level activity? And, who is in the position of driving that?” What do you think, Joe McKendrick? Should developers be concerned with this in terms of jumpstarting it, or does this have to happen at a higher level, perhaps across industries? Vertical industries of course have a great deal to gain by this if they can create semantics around their particular business issues, and then make more services and resources in automation available to the developers.

McKendrick: It’s going to come from both directions -- from the top of the organization and from the developers within organizations. How’s that for a definitive answer? On the part of corporations, there is always resistance to exposing too much data and exposing too many of their applications to the outside. A little bit of this has been melting away, as we’re seeing the rise of software as a service, and from surveys and anecdotal data.

Information I’ve seen in recent months indicates that there is lot of interest in the whole software-as-a-service model. A colleague of ours over at ZDNet, Dion Hinchcliffe, encapsulated the view of Web 2.0. He calls the Web 2.0 "The Global SOA," meaning that a lot of the standards and services that you see in an SOA behind the firewall these days will be available in a global sense from the Semantic Web or from the Internet at large. And a lot of the services, standards, etc. that we will adopt and see in companies will gradually, more and more come in from the outside -- from the Global SOA, if you want to call it that.

Gardner: That helps us conceptually, if we think of SOA in terms of the reuse, mixing and matching, aggregating, and compositing the free access to services. If we apply that to the larger Web, then think of software as a service and the APIs that are increasingly available from the likes of Google, Salesforce.com, Amazon, eBay, and Microsoft, then we can see SOA principles inside the organization and then Web 2.0 principles outside. But technically, isn’t there still a huge disconnect between what is referred to as EII and master data management (MDM) and what others are referring to as the Semantic Web? Isn’t this really still orthogonally an entirely different kind of technical approach, Jim Kobielus?

Kobielus: Are you asking whether EII and MDM are different approaches? Can you clarify?

Gardner: I'm trying to get at the point that conceptually we have a common thinking and methodology around SOA internally, and then Web 2.0 externally, in terms of mashups and services that are available. But on the data aspect, I still think that there is a pretty large disconnect to try to make these two areas conceptually fit on the technical level in regards to EII and master data management activities internally, across B2B ecologies, or vertical industry ecologies. It’s still very distinct from what we’re talking about on the larger World Wide Web, the things that Tim Berners-Lee and others are getting close to in terms of Semantic Web and Web 3.0.

Kobielus: That’s quite right. Basically, you can look at semantic interoperability as being the global oceanic concern. Wouldn’t be great if every single application, data base, or file that was ever posted by anybody anywhere on the Internet somehow, magically is able to declare its full structure, behavior, and expectations?

That’s the "boil the ocean" aspect of it that everybody keeps focusing on, but then you can look at semantic interoperability in a well-contained way as being specific to a particular application environment within an intranet or within a B2B environment. Many vendors in the master data management or EII space are approaching it from that direction. In other words, they are providing pre-built domain models with standard data definitions, metadata, ETL rules, governance workflow rules, etc., as a standard component of their applications.

These are applications running out like an MDM or an EII substrate that they will sell in to particular niches or segments, such as enabling customer data integration within an organization or enabling a supply chain optimization on a B2B basis, where there is essentially this shrink-wrapped semantic model that’s provided as part of the overall application. That is semantic interoperability, because what’s happening then is that the vendor, and/or its ISV partners, and/or the customers are taking the semantic domain model and modifying it to their particular requirements.

So, that is very much, in a sense, the Semantic Web. It’s semantic interoperability out of the box that doesn’t rely necessarily, or very much, on things like RDF and all of these other specifications that are sitting on the sideline and are represented in today’s EII market.

Gardner: So, to Todd’s point, it’s still point-to-point, and we're not doing this on any automated or holistic basis, but, gee, wouldn’t it be great if we could? Let’s take a look, though, at Google and its effect in the market. While there isn’t a true Semantic Web, there is some added functionality that Google and other large search engines bring to the table by organizing and creating metadata and indexing within their environments. They make it freely available, with the quid-pro-quo, of course, they can create a huge fast-growing contextual advertising business around that. But, are Google and others of its ilk in a position of creating a de-facto Semantic Web? What’s the relationship of that to companies who might start indexing and creating metadata search-type activities within their SOA or services-data-level activities?

Biske: It’s interesting that you bring that up, because last week David Margulius published on InfoWorld an article titled “Corporate librarian replaced by Web app.” He wound up having a link to one Clay Shirky article that talked about removing the shelves. He was comparing it to a library and the whole Dewey Decimal System and saying that what Google did was to pull all the shelves out. That is to say that there is no one way of organizing it, and it's really focused on the relationships. So, even there, I don’t know that Google’s necessarily created a Semantic Web. They have created a relationship index.

Gardner: An index, yes.

Biske: So, you’re still not going to get that semantic information out of it, but it's probably a far more appropriate way of getting at the information, because, as we know, there are so many different ways of slicing and dicing that it’s a challenge. It comes back to why some of the semantic technologies haven't made advances. The challenge within data federation is that we keep trying to find one universal model, when there isn’t one.

Gardner: Right, but perhaps indexes that have something in common by being equally searchable can create a stepping stone, or a good-enough-as-good-enough approach, to some of these requests and demands.

Biske: Where a Google approach can help, and where Semantic Web comes into play is when we know there's a relationship between these two documents, two things are accessible via URI. We need a standard way of getting metadata about that, beyond just the tags, because we found that while the tagging is a step better, you still have a semantic issue with the tags themselves.

Now, if we add in the metadata that provides additional context about the relationship, what is that going to enable? Now we can start to really make semantic connections between these things and start to leverage that metadata in an automated fashion.

Gardner: What do you think Dave? We're seeing a lot more Google appliances percolating up inside organizations, where they're using essentially the same approaches to organize data inside the Firewall as Google uses across the global Web, and across many other types of content. Is there something here in terms of using these indices to get to the semantic level of benefits?

Linthicum: I think so. I’m just going to add what Todd said. One thing that’s going to happen with the influence of something like Google, which is having a ton of a push in the business right now, is that ultimately these guys are exposing API’s services. They just came out with a streaming API last week, and its actually pretty good. But, at the end of the day, it’s a service that you invoke to get a stream out of it. They're coming to the realization that the developers that leverage these APIs need to have a shared semantic understanding out on the Web. Once that starts to emerge, you're going to see a push down on the enterprise, if that becomes the de-facto standard that Google is driving.

In fact, they may be in a unique position to create the first semantic clearing house for all these APIs and applications that are out there, and they are certainly willing to participate in that, as long as they can get the hits, and, therefore, get the advertising revenue that’s driving the model. But, I think the indices and the ability to catalogue not only content, but services and then information around services -- and not only services, but data and information around data, metadata -- is really the next logical step in that area. There is going to be a big push there in the next few years. I don’t necessarily see it as the 2007 opportunity, but it’s clearly a 2008 opportunity.

Gardner: That’s very interesting, and I don’t think I've seen this declared elsewhere -- Google, being in this unique position, perhaps more than the W3C or Oasis or some of these other organizations, could create some sort of an approach for de-facto industry standardization around indices and then, ultimately, Semantic Web types of activities.

Linthicum: If you think about it, Dana, Google right now is probably the number one provider of services out on the Internet, providing the Google maps, API’s and everything else that’s out there today, and they see this as a strategic direction where they can grow. So, they are in the API business and they are in the services business. When you're in for a penny, you're in for a pound, and you get into that world. So, you start providing access to services, and rudimentary on-demand governance systems to account for the services and test for rogue services, and all those sorts of things. Then you ultimately get into semantics, security, and lots of other different areas they probably didn’t anticipate that they'd get into, but will be pushed into, based on the model they are moving into.

Gardner: I didn’t expect to get into quite this discussion today, but at the Web 2.0 Expo I attended last week in San Francisco, one of the underlying discussions that were seemingly going on everywhere was Google. "They are so big. Are they good; are they bad? What should we make of them?" It was this is sort of an ongoing gnashing of teeth and navel-gazing across many of these communities. In one of my conversations, I said that just because they are big and powerful doesn’t mean that they are bad. Why not give them the benefit of the doubt? Without going too far into the "Google good-Google bad" business, given their very powerful and perhaps auspicious position, how do you guys come down on Google as an SOA enabler?

Kobielus: I agree with Dave. Google potentially plays a very important role in catalyzing the spread of something like a Semantic Web, simply because they are the master indexers of the universe. When you look at the EII products and the vendors that are out there, every single one of their semantic layers, at its very core, has an index. It’s a registry of the data and the metadata that exists out in whatever universe or other environment that that particular vendor’s product is managing.

So, to the extent that Google is the default index that everybody goes to first and foremost, and Google crawls and has indexed and documented every visible piece of content in the universe, I think they sit right dead-center of the heart of the Semantic Web, or will, or somebody like them, somebody who plays that role.

Gardner: So, maybe we should add the new tag line to Google: SOA enabler.

Biske: I agree with those comments as well. If we take this inside the enterprise, and the enterprises deploy the Google appliance, they can go and crawl all of those sources of metadata. The enterprise is trying to take on some form of data governance and come up with their canonical models, and they need to take a bottom-up approach to all of the databases that they have got. Why not throw your Google appliance at it and then start throwing in the keywords that the data-governance committee is actually debating on how to describe the data? You’ll instantly have all the relationships between not just what's in your relational databases, but your unstructured content as well.

They really do play a key role, even indirectly, in the SOA space. One of the recommendations I always make to the companies that I’ve worked with, if they are looking at register repository, is to ask the vendors whether their repository can be indexed by a Google appliance. Ultimately, that’s going be how the developers are going to find the services, and they want to use Google to find it.

Kobielus: Here is the thing. For this grand notion of a Semantic Web to be truly universal, all the many indexes and search engines that are out there need to be federated. Semantic interoperability is a huge problem that I can scarcely put my head around. How is that going to happen?

If you think about it, the analogy is a whole federated identity world that’s been percolating since the start of this decade. You have concepts or standards like SAML, the Liberty Alliance Standards like IDFF, and now SAML 2.0, WS Federation, etc. Those guys have not converged on a common, universal federation environment, in which everybody participates. And, that's just in identity management. Think about federating metadata repositories across the known universe. That should be a tough nut.

Gardner: That’s right, if we take the same approach to data and apply it to ID management. Then, we're talking about the single sign-on and the cloud benefit that many people have been asking for. But, that might be a little of a tangent. Let's try to stick to data. One of the things that occurred to me, when we were describing the virtues of a Google search appliance and Web-based indexing is perhaps Google or others need to come into the market with a gateway appliance that would allow for policy, privilege, and governance. This would allow certain information from inside the organization that has been indexed in an appliance, say from Google, to then be accessed outside. Who is going to be in the best position to manage that gateway of content on a finely-grained basis? Google. So, perhaps Google moves again into the gateway appliance business. Any thoughts?

Linthicum: I don’t think that they have gone that far-far down the road.

Gardner: We should charge them for this. Don’t you think?

Linthicum: I think we are giving free strategies to a multi-billion-dollar organization. I don't know if you saw the release this week from salesforce.com. They are in the platform business, so they deliver semantic mediation, app development and integration, and even aspects of SOA on demand now. So, that’s another player in this game, as well, and a much more sophisticated player, when you consider that they give you the coding tools, design tools, the database, and the platform in a virtual operating system. There's going to be a lot of people moving at that platform, and they're building SOAs on that platform and extending them in their enterprise. They could become the platform for semantic mediation as well. That’s their opportunity right now.

Gardner: Not to bash Redmond, but perhaps Microsoft isn’t in a position to move into this federated global approach, and may have missed the boat on this as well. Any thoughts there? No comment? Okay. Never underestimate Microsoft.

Linthicum: I think we are all waiting for checks from Microsoft and they haven’t come yet.

Kobielus: I was thinking that the real platform for semantic mediation are these industry groups that define common data models for those industries. They can form those data models that then are the platforms for semantic interoperability within those environments and within those industries. So, that’s also important. Doesn't OMG under Richard Soley develop, to some degree, those data definitions on a industry-by-industry bases or catalyze their development?

Gardner: I believe they do. They've been aggressive in going into verticals and providing a common consortium-level organizational framework for them to come together and agree on taxonomy, scheme, and terminology.

Kobielus: Because it’s all about taxonomy governance, and governance quite often is industry specific.

Biske: I actually do have a Microsoft comment. The one thing that I will give Microsoft credit for is that of any of the players, they are probably one of the ones most likely to bring metadata into the developer’s world. One of the WS-Star specs that I like a lot, but that you don’t hear too much about, is the WS-Metadata Exchange. Microsoft’s got an implementation of it, and they are strongly trying to leverage that in the advancements they are doing to .NET and Windows Communication Foundation. Because of how developer focused they are, if they continue to push that, they can start to bring some of the Semantic metadata into the developers' context and show them how we can leverage not just in design time but in run time. So, we’ll just have to wait and see what they come up with

Gardner: Could this be yet one other area in which Google and Microsoft will perhaps bump into each other?

Biske: I don’t know that we’ll necessarily see that, because Microsoft's strength is in development tools, whereas Google is more in providing their widgets that can be combined on the Web pages and the whole AJAX feel to these things, as well as the underlying search engine. So, they are little bit orthogonal in their approaches.

Gardner: What about the federated indices based on some sort of a Google indexing standardization that would allow for developers to access metadata vis-à-vis these indices, rather than through other means?

Biske: That will be the challenge, if Google actually tries to come up with a standard for accessing them, and Microsoft wants to push one of their own. But I haven’t heard too much on either side about doing that.

Gardner: Now, we are getting in the real crystal-ball action here -- like 3 to 5 years out. Based on some of the discussion around UDDI and registries, maybe these need to be made accessible to crawler activities and appliances for indexing. Joe, you had a blog about IBM dissing UDDI. Can you explain where that came from and what’s going on there?

McKendrick: Sure. Actually, IBM released its Websphere repository and registry product's latest release the other week.

Gardner: About couple of months ago, wasn’t it, and the analysis now has just come out?

McKendrick: Exactly, and Burton Group's Anne Thomas Manes released a report in which she pointed out that there really isn't strong support for UDDI. The product supports UDDI implementations outside of their own registry, but its more of a proprietary solution, kind of a step backwards. IBM was one of the co-creators of UDDI in the first place 8 to 10 years ago, along with Microsoft and Ariba.

It was originally created as kind of an e-commerce yellow pages. There would be this place where you could go to find out about services, and it would link the services across the Web or Internet. Of course, it didn’t really happen. In fact, these companies maintained public UDDI registries, and they shut them down because it just wasn’t getting them traffic and they couldn’t keep them updated. But UDDI found a new life as the internal registries for SOA governance.

In an accompanying article that responded to Anne Thomas Manes' observations, IBM came out and said "Yes. We are not exactly robustly supporting UDDI any longer. We feel that UDDI does not support the vision of SOA as it exists these days." It supported Web services, the interchange idea of Web services, at an earlier era, but SOA is an internal building block function, and UDDI is not robust enough.

Gardner: What do you think IBM is doing here with this, as you call it, step backward? Perhaps they would view it otherwise? What do you think they are trying to do, add more functionality conceptually into what a registry and repository should do and that UDDI just isn’t designed to handle that?

McKendrick: They say that in its current state, the UDDI standard doesn't support the lifecycle aspect of service development. Again, it’s a more than an exchange and communication vehicle, but it does not have that from design-time-to-run-time support that registries should have.

Gardner: I just did some research with IBM, looking into what they are calling their Jazz Framework. Not all of this has been made available, so I have to be a little bit careful. But, this might be that missing link, if you will, between the design time and the run time, where they are creating an Eclipse-like framework that their products, Rational, Tivoli, and WebSphere will plug into very nicely. But, they are also making it open, so that others can do plug-ins and modules and also have some community-based approach to it.

They're trying to do just that, create a lifecycle approach to services, so that developers who collaborate with one another, perhaps across global distances and multiple organizations, can be in a common mentality around the governance and the use of these services. They can relate to operational governance issues fairly early in development. Has anyone else been made aware of Jazz or looked into that at all?

Speakers: No.

Gardner: Okay, we’ll expect that it is going to be announced at the Rational Developers Conference in Orlando in June. There's already some stuff out on the Web that’s trickled out. So, if you do an "IBM Jazz" search, you will find some of this. Stay tuned on that one. It’s an interesting angle that promotes the notion of SOA lifecycle development, services life cycle, and a community and framework approach.

McKendrick: Well, IBM said that the vendors should go ahead and start working on a new replacement or a new generation of registry, and maybe this is what they are talking about.

Biske: It's unfortunate that the IBM article really was very lacking in specifics. They said UDDI didn’t cut it, but they didn’t give any details on where it didn’t cut it or what advanced features their customers were asking for and needed. It doesn’t surprise me that there are some ramblings around this. One of the things that I have called out a couple of times my blog is whether we're willing to see convergence around all these metadata repository spaces.

I usually point to configuration management databases versus the UDDI and registry repository space. Clearly, it's not a great leap to get into the policy management space, which now hits the heart of governance and the topics around SOA registry repositories. So, there are some clear ties there. If each one of these systems has its own unique way of representing the metadata, as well as accessing the metadata, then perhaps IBM is right that we do need more work on the standardization front to figure out what is the best way for just accessing this universe of metadata, whether its policies for the run-time infrastructure, additional semantic information for design time, or both.

Gardner: Let’s move on to one other subject that just occurred to me, even though I didn’t put it in our lineup early in the show. We had the announcement that Adobe is going to open-source Flex Rich Internet Application (RIA) approach. Any thoughts about that in terms of "Does Adobe have a chance of establishing more of a de-facto industry standard for RIAs as a result of Flex being open source?"

Linthicum: I think that’s a response from Laszlo and a bunch of other folks in the AJAX world who are just counting their toolsets, and they're big enough to buy their way into the market. That's exactly what they're doing.

Gardner: When you say "buy their way into the market," by having an established product and making it open source. Is that what you mean?

Linthicum: Yeah, open source, discounted, and therefore making it much more attractive. They add some value, but in many instances, it's just becoming a gimmick to sell software, and this may be an instance of that.

Gardner: But, even as a gimmick, given their presence and the pretty powerful capabilities of Flex this could give them a big advantage in the market.

Linthicum: Absolutely. I have a lot of experience with Flex, as I built Bridgeworks, a company I was CEO of a year ago, around Flex, and it’s a very good tool, and it does a very good job. I think that they are trying to get it out into the development community to get away from the whole Flash Internet content, Internet sex appeal delivery industry they’re in right now and move into the app development industry. That’s a great way to do it, because people say, "Open source? Okay. I'm going to give it a shot."

Gardner: I had a little fun in my blog with this announcement, saying, "Well, why don’t they do it with Flash as well, if they think so highly of open source?" But, I haven’t heard a response. What do you think? Is that something that makes sense to you -- to have Flash on the entertainment side of this become, at least potentially, some kind of de-facto standard? Could open source help them achieve that, particularly in light of what Microsoft announced with it’s Silverlight capability?

Linthicum: That’s a tough leap for them, because ultimately that’s their bread and butter. They own a lot of that market, and they do so with a very well-thought-of product. They are probably not looking to do anything different, because that’s going so well. The Flex market is completely different. You've got a lot of these folks entering that market with some very nice technology, and I think Adobe is just responding to that competitiveness, versus owning the market. They have to compete in the market, and that’s the way they are going to sell their product. I think it’s a smart move for them.

Gardner: I've heard, and I don’t know if this is substantiated, that there were fewer than 10,000 active Flex developers. So, that must have been a concern to Adobe, but they might be able to create a catalyst to adoption now.

Kobielus: I'm sure that’s their hope, that Flex can catch fire with the development community by being freely available everywhere. That’s the same gamble that Red Hat took with MetaMatrix, when they open sourced that, but it doesn’t mean that they are going to succeed. There are lots of alternatives to MetaMatrix in the EII space, and I am sure that there will more of that coming along. So, it’s definitely a gamble for Adobe to give it away.

Gardner: One more comment from me on the Red Hat thing is that I think this forces IBM's hand a little bit on the EII stuff. Open source can be very powerful in that regard. There are so many instances where modules, connectors, community involvement, and then sharing of those connectors and modules could be very advantageous, especially where you are trying to bring as much data and content into a common view as possible. So, Red Hat is perhaps thumbing its nose at IBM, saying, "Well, now what’s your response?"

Kobielus: That’s right. They're also thumbing their nose at BEA, which has had an EII capability with the AquaLogic platform for a while now and hasn’t really got much traction with it.

Gardner: Last subject, and we've only got a few minutes Dave Linthicum, you quoted a Gartner study in one of your recent blogs. There was a Gartner symposium just this last week in San Francisco -- good news, bad news, and SOA. Can you just tell us quickly what was the take away on that?

Linthicum: The take away on that are things I've been seeing for quite some time. People are actually getting into the project-level of SOA now. I am seeing that happen a lot. I am sure MomentumSI and other folks in the service-delivery area doing that, and they're finding out that it’s hard. It’s tough to do, and it’s a systemic change in the way they think about architecture. There’s a bit of a hangover from the hype that occurred in the last few years. So, people are having a bit of a negative take-back on that. I feel like I'm the designated buzz-kill running around the country, working with my clients, introducing them to the fact this is not something that can be taken lightly. You can’t bolt it on. SOA is something you do, not something you buy.

So that’s the bad news. The good news that Gartner found out is that the concepts are working. People are successful with the technology, and I'm seeing that in my practice as well. It’s a valuable thing, and they can make a lot of money in terms of expense savings and the strategic advantage of agility that goes right to the bottom line.

So it’s a good concept. Conceptually it’s working, people are proving it out in the market. It’s just a bit different from the way in which the vendor hype has been describing it over the last couple of years. It’s more of an evolution of hard things that need to be done. You can’t buy stuff out there. You can't buy SOA.

Gardner: I should also point out that Dave is not just the CEO of the Linthicum Group but he also writes the Real World SOA blog for InfoWorld. He is the host of the SOA Report podcast, and is also a long term SAS blogger for Intelligent Enterprise. So, thank you also. Jim Kobielus, you are a blogger too, what’s your blog address? How do people find your blog?

Kobielus: jkobielus.blogspot.com

Gardner: Can you come up with a brand for that it’s a bit long isn’t it? How about “Jim Says” just "Jim Says?" And, Todd Biske you’re a blogger, tell us about your blog, where is it located?

Biske: I actually started my blog before I joined Momentum so it’s under my personal domain. It’s www.biske.com/blog

Gardner: Well, thank you. This has been an interesting discussion. I appreciate all of your thoughts and inputs.

This is Dana Gardner, principal analyst at Interarbor Solutions. I want to thank Joe McKendrick, Jim Kobielus, Dave Linthicum and Todd Biske for joining in yet another BriefingsDirect SOA Insights edition podcast. Thanks all for listening.

Listen to the podcast here. Produced as a courtesy of Interarbor Solutions: analysis, consulting and rich new-media content production. If any of our listeners are interested in learning more about BriefingsDirect B2B informational podcasts or to become a sponsor of this or other B2B podcasts, please fill free to contact Interarbor Solutions at 603-528-2435.

Transcript of Dana Gardner’s BriefingsDirect SOA Insights Edition, Vol. 17. Copyright Interarbor Solutions, LLC, 2005-2007. All rights reserved.

Tuesday, July 10, 2007

Content Becomes King Once More – This Time of Search Marketing

Edited transcript of BriefingsDirect[TM] podcast with Media Survey's Sam Whitmore, recorded April 24, 2007.

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


Dana Gardner: Hi. This is Dana Gardner, principal analyst at Interarbor Solutions, and you're listening to BriefingsDirect. Today, a podcast discussion about the future of marketing -- maybe we can call it Marketing 2.0?

We're going to talk about content creation as a strategic activity, and we're going to talk about what the PR and marketing folks in the field, in the enterprises, in businesses, are making of all of this.

Joining us to sift through it all, we have Sam Whitmore, founder and editor of Sam Whitmore’s Media Survey. Welcome to the show again, Sam.

Sam Whitmore: It’s great to be back, Dana.

Gardner: It’s been two years since we started these conversations. I came to you as a professional providing tools for the media pros, asking, were they making blogs, were they making podcasts, what about RSS? And you weren’t sure. But do we have a new state of the art? Are people into this now? Is it a fad or are we really into something substantial?

Whitmore: It’s as close to substantial as it’s ever been. There are many segments, and we should be careful about generalizing, but in our world are the people that are likely to listen to this podcast. People understand about RSS feeds now. Microsoft Vista, entering the market with Web feeds, moved the marble a little bit -- and it's a very exciting time.

Gardner: I just got back, Sam, from the Web 2.0 Expo in San Francisco and was very impressed with the use of RSS, particularly as a machine-to-machine capability. Folks that are creating content, and then creating distribution networks using these within the mashup interface, the rich-Internet application interfaces. RSS is really a very popular tool for developers, and that’s going to hasten its appreciation for those a little higher up the food chain who are thinking about strategies, marketing, outreach, community development and so forth.

Whitmore: We're now getting people to understand the concept of "You don’t have to browse anymore." They still search, of course, probably more than ever before. But think about the two ways that people get their information now. It's either through RSS syndication, or through search. And it’s almost quaint to think back about, "Yeah, I think I am going to go through my bookmarks and see what I haven’t visited in a while." I don’t know anybody who does that anymore.

Gardner: The thing that’s interesting to me, and what’s changed in my business in the last year or so is this emphasis on search. Search, from what some people tell me, is the "new media." When you want something, you know enough about it to start a search. If you're a little bit diligent, you can find just about anything you want. That includes B2B content that describes products, values, and services that companies want you to know about.

What’s been interesting for me is that as I have created content -- some of it of by my own creation and, and other content that is sponsored -- people want help in creating content. As an analyst, I can moderate a panel or discuss something with users, and then make that available to many people. But that content has now become a very powerful force in search, and I did not intend it that way.

I intended this content to be something that had more of an RSS play value. But what’s happened is that the content is a search-ranking benefit for the topics we cover. I will blog about this content on three blogs, and I share it with distribution partners who are often IT media companies like TechTarget and E-Commerce Times. I also share it with direct subscription-based content deliverers to IT decision buyers, including Books24by7, AnalystPerspectives, Gerson Lehrman Group's News, and Insight24.

There are a number of channels that this audio and text content then finds its way into -- where it's tagged, has a different URL, and is associated with a different Web domain. The search engine crawlers and the algorithms that rank content take a look at this content and say, “Wow, it's going across multiple domains, it's been tagged a lot, it’s been put into bookmarks, and linked to -- so it must be highly relevant." And this content tends to move up swiftly in the search ranks.

So, my question to you, Sam, is: Are you seeing search marketing as I am seeing search marketing -- that it is becoming as important as advertising?

Whitmore: In a word, yes. I'll know a lot more in a couple of weeks, because at the end of the month, out in San Francisco, I will be going to ad:tech and hanging around with that crowd. But, it's been building for a while. The investment in search-engine optimization (SEO) and some of the acquisitions that we have seen, such as big, multi-national marketing companies now snapping up the iProspects, and iCrossings, are doing a great job. So, it’s definitely being built into the mix. That’s what Content 2.0 is. And you’ve really staked a high ground in that, haven’t you?

Gardner: I am trying.

Whitmore: So, you tell me. How are you doing with that? Is it driving your business?

Gardner: It is. About 90 percent of my business is now supported through custom podcast content creation. And I even hesitate to use the word podcast anymore, because for me, podcasting is really a means to creating content -- and not an ends. Just as you and I are having a discussion now on the phone, and I can create a transcript from this in about two or three days, that means this content can be widely distributed through multiple modes or modalities across different distribution networks and partnerships. We can even license it to people to use and create more content.

That’s sort of led me to another concept, which I call the "content pyramid." Interestingly enough, I’ve stumbled onto this in the same fashion that I stumbled onto search as an important element. Because I look at software development and deployment strategies as my main domain area for coverage -- and then I am more of a practitioner of Web 2.0 in terms of how I deliver content -- I’ve noticed over the past five years or so, a more strategic approach to software development.

That is to say, there's a new way, instead of small groups off doing their own thing, creating their applications that run autonomously on a monolithic stack of some kind, that have no real relationship to one another, and that at some point I might have to integrate and/or assimilate the data that they contain and create. The idea is to take a strategic overview and to think about applications from an architectural perspective.

The idea is to think of applications from their lifecycle, not just how we create them -- but how we might want to use them in the future, or even sunset them. Then think what we’re going to do with this pile of data that, in many cases, is about the same customer or the same product, but in a different format in a different application? This one-off approach is just not productive, and it’s expensive.

Companies are spending 70 to 80 percent of their IT dollars just on maintenance of these existing applications, and are not doing innovative new things. There has been a whole host of things that have happened around, "Hey, let’s create components, let’s use standards, and let’s develop around a common framework such as Eclipse." So, there’s more of a strategic approach to software.

Ultimately, the goal is a Service Oriented Architecture (SOA) where you have lots of different business services that you can then package, mash up, and aggregate to create different processes. Then, you can tear them apart and build them up again. It’s more of a use-reuse, common-repository mentality, and not just one-off production.

Whitmore: All right, so let’s see how you pull this off with content.

Gardner: The idea is to start thinking strategically about your content, instead of having thousands of people around your company, each creating their own content without much interaction, without much coordination, but perhaps a lot of overlap and a lack of reuse, adding to redundancy. That goes for everything from mimeographs to RSS feeds, and all in between.

But when you think about content more strategically, and can plan for and create core content that can be reused and extended across different uses -- like marketing literature, the documentation you provide for your services and products, your advertising, as well as your communications with your investors, with analysts, with the press -- you create more of a coordinated core set of messages and documents and content. We'll be seeing more audio and video increasingly in this mix.

If a company can create this content core and allow people to use it and make it accessible -- in the same way as with the development of software tools and components -- you can better control your costs. You can better control your message, because more of your messaging will be in sync, because it's all coming off of the same core. You can create a lot of this core without having to go through a sixth-month review process, and without taking up your experts’ and your company’s time by forcing them to write 80-page papers.

Maybe this whole notion of the conversation that is prominent in social networking and in Web 2.0 -- of having a series of conversations, capturing it as audio, turning it into text, reusing it across different aspects of your communications, and increasingly, capturing it as video as well -- will allow for a much easier way of gathering knowledge from your experts and users, keeping it on message, and then making that available as a set of core content.

Now, it’s a vision. There is always going to be a lot of need for exceptions, but conceptually starting to think about content strategically to me makes a lot of sense now.

Whitmore: Well, I know that Netflix has somebody in the CCO position, Chief Content Officer, and that they have looked into that as a fundamental principle of communicating to their constituencies, their prospects, their customers, their investors, and people like that. So, it is a good idea.

Gardner: It’s really all about content discussion and community. As more companies outsource and offshore elements of their production and distribution, and as more business services become available off the wire, what is it that’s going to define the business of the future? It’s going to be their relationships, and the way that they foster those relationships is through ongoing content-based discussion.

We now have the ability to distribute content far more widely, but, at the same time, in a more granular sense -- that long-tail concept -- more widely, yet more targeted, and more cheaply than ever. So, you can create a 30-minute movie, put it on YouTube, and almost anyone on the planet has access to it. Anyone, by the way, who does a search on the key issues about your value, your products, or your company gets to the content.

More companies will be making some pretty high-quality, interesting, 30-minute, maybe 15-minute movies. We are already seeing this. There was a great one on SOA that IBM did not too long ago. Are you, as a marketer, going to want to have someone else define your messaging for you? Or are you going to start thinking about doing this yourselves?

Again, IBM is a bellwether in this, at least in the IT space. They’re just creating scads of content. And when you go to Google, if you type in "SOA" or "Services Oriented Architecture," which is an important direction and business opportunity for IBM, the left hand side of the search page, that free-content stuff, is littered with IBM content. Discussions with developers, whitepapers, mentions in press – these are the things that get vetted by the search engine algorithms as being relevant.

Any company that has a strategic direction in which they are taking their business should say, “What are the keywords that relate to our future? What is the content we can create that will drive recognition from those keywords of our value, specifically as an individual company? And how can we create an ongoing process by which we’re feeding that algorithm machine over and over again to retain that high ranking?"

That to me is Marketing 2.0.

Whitmore: That model works hand-in-glove in uber-search environments like a Yahoo!, YouTube, or Google. But in the world that I follow, you've got the IT and tech media really trying to drive their brand, because they don’t want you to go to Google and type in “SOA.” That would be a terrible defeat for them.

Gardner: But, you don’t want to limit yourself to one media company’s input. What these media companies should be doing is the same thing their customers are doing. That is to create the very best possible content on the key subjects of interest of the day, and have them appear high up in the general search ranking. So, when I do a Google search on “SOA,” I’d just as well see an article up there by InfoWorld as one that is from IBM. But either way, if it's good and valuable information, that’s what I’m going to look at.

Whitmore: But as you get closer to, “I've got to make a decision on a reseller or a solution provider or vendor," then I think that I am not going to trust IBM. They are not going to be my goal because they are going to be omitting the stuff about BEA and its competitors.

Gardner: Well, we hope that BEA and its competitors are creating content about their value and that it’s also available. Obviously, buyers will be moving from research, into creating a shortlist, into an RFP process, getting into weighty, detailed discussions, and then ultimately buying negotiations. This Marketing 2.0 approach is completely complementary to a traditional sales, research, and then execution process.

Whitmore: It absolutely is. They can work in parallel, and these IT trade titles and these people that are being rapidly disintermediated need to figure out how to get some of their content to rank well in generic search environments. That brings us back to SEO and the fact that you can subscribe to RSS search results. These people really are getting hammered.

Gardner: We're now leveling the playing field. The best content that is vetted through the algorithmic search process is what’s going to be most prominent. We know that when people do searches, they don’t go more than one or two pages in. Therefore, the IT media, those companies covering IT, need to come up with great content, great columnists, podcasts, RSS, video, whatever it might be, that would show what is voted on as best and vetted.

Whitmore: I have an editorial bias, when I hear the word "content." I think about generic, by-the-pound content. Whitepapers have their place, and product documentation too, but as the 20-somethings and 30-somethings take over the world – and that’s happening – they are not going to accept the same blandness and pseudo-authority that a lot of content has for us.

Gardner: I agree. People need to loosen up, and I've written a number of whitepapers. The way you go about a whitepaper is you do research, you get information, and you do interviews – primary research. And what is an interview? It’s a discussion. Why not just create a great discussion with the experts and put that up, instead of putting it into some sort of a turgid-prose, 80-page tome of which people only read the executive summary?

Why not give the long tail its due, put up a series of five key discussions with the experts you would have interviewed anyway for the whitepaper, let people either read the transcript or glance at the executive summary of each individual interview or discussion, and then pick and choose? To me, that’s just a better way to learn. And it's also a lot easier for the experts as well as the authors. So, it really is a discussion.

There are more young people thinking about community and social networking, and so why not combine all of this into a happy discussion that is also substantive and educates at the same time?

Whitmore: It reflects real people with real attitudes, and not created by the lawyers and the PR people and the conservative forces within companies because that’s simply not going to work. One of my last points questions is, when are we going to see an example of a company relying on "content pyramid" philosophy, and could we prove that they were successful doing so? When are we going to see that?

Gardner: We're seeing dribs and drabs of it. The idea is to look at what’s effective in terms of engagement with your communities. If you can engage your community with a whitepaper from the people doing lead generation, and they get 300 or 400 leads, it’s a success. But when you put something up on YouTube, you get 30,000 to perhaps hundreds of thousands of potential downloads and click-throughs and looks.

The scale is much greater and the cost can be comparable or even lower. You are going to start to see what works in the field. When people recognize that if they are number one or assumed to be in the top several media outlets, they are going to have to be there. Vendors will cultivate the search option too through PR and AR and Investor relations and operate among different channels or distributions of content to reach their end-users and communities.

I can see "search relations (SR)" as another possible definition of people’s approach to this.

Whitmore: That’s a very interesting concept, but from a VP of sales perspective, Dana, I don’t want 30,000 leads. I want the 25 that are in an advanced state of consideration for the product that I sell.

Gardner: Then, you just vet them. You take that 30,000 potential community and bring them down into another level of content that will slough off those who are not interested very much. That’s to say, if they’ll click through and look at a five-minute video, that means there’s mild interest. If they click further down and read a transcript of hear a podcast on a similar topic, but more refined, that shows even more self-selecting and interest.

Then, if they listen to the podcast, you get down to the where it’s a lead generation benefit. That’s where you separate the wheat from the chaff and you get real leads. It's also where the content pyramid works. You need the content to walk them down that path of self-selection.

But, I would rather start with a large universe and work it down, creating brand affinity and relationships with those people, and then find the content and the mechanisms that then bring them to the point where they are ready to sign up for the product or service.

The pyramid is, in that case, inverse – you start wide and you go narrow. But the content creation process should start specific and narrow and then go wide. It has to be two-way discussion. Once you engage the people on a discussion, that’s where you have a myriad of opportunities for bringing them into your business.

Whitmore: Are there examples of people that are prospering with this philosophy?

Gardner: The notion of getting people to a sales-and-marketing activity requires community, affinity, and interest, and you have to lure them in there and then get them to click – whether the click is a download or it’s a lead generation form.

I’d look at some companies that are good at that. I'd again bring up IBM, but I have also noticed that BMC has a very good page, where you can go for information. And this page has got a listing of all sorts of content that has to do with specific values about what they bring their customers.

And they're saying, "Here’s the content that we have created. Here’s content that we found out there that others have created. Here are links to blogs and podcasts that we think are relevant to this. Here’s a download of whitepapers in the traditional marketing literature." It's really just a site or a destination around a topic that’s a subset of their business that people can go to, and then they could get an RSS feed from.

In a sense, BMC is doing their community a service through a knowledge triage around a specific topic that then hopefully will engage the community. So, BMC is a good example. They still have to populate this. People who come back, people who have a subscription to RSS, are going to need something new and fresh coming down their pipe every week or two.

But, they're creating this funnel, qualifying people, and then hopefully getting them into an engagement. It therefore requires these companies to become publishers themselves.

Whitmore: But, most companies don’t have the headcount for that.

Gardner: Why not?

Whitmore: Because usually the executives are going to say, “If I had any spare headcount, I'm going to put it in sales and field marketing and they're not going to get into the publishing business.” They might subcontract it out, but I don’t think they're going to bring it in-house. I’d be very surprised.

Gardner: I was thinking the same thing when I started my business, Sam. I thought that I would be one of those subcontractors – and I am. I basically help people figure out how to make content distributed and keep it credible and valuable. But, I'm seeing more and more companies are actually saying, “We're going to create a studio – a video studio -- inside of our company.”

Whitmore: What kinds of companies?

Gardner: Well, Red Hat, for example, recently had a job posting that they are looking for someone who has experience as a video producer. And they are going to start doing this in house, I suspect. I expect to see the same thing from other companies.

Whitmore: That’s interesting, because they live in a viral world. And Apple’s the same way.

Gardner: Their goal is to get people to download the code that then leads to support and maintenance. That interests business.

It will be a mixture. Some companies aren't going to be interested in being in the content business. They’ll outsource the whole thing. Other companies will say, “Listen, it just makes more sense for us to make this a core competency. We'll still use traditional media, but we're going to create our own media too.”

Let’s think about the numbers here. Let’s say you're a $5 billion-a-year company, revenue-wise, in the IT space. You and I have worked for large IT publications. What was the total editorial budget?

Whitmore: Back in my day? It was at least $1 million.

Gardner: Let’s say you could create an entire weekly news publication that’s the best in its field for a couple of million a year, and you're a $5 billion company. Wouldn’t you throw $750,000 or $1 million at a core competency of content creation, and perhaps soon dominate your space for content, and dominate all of the keyword searches because you're putting up the best, most interesting content?

Whitmore: If I had strong enough leadership, I would.

Gardner: If I were spending five times that much on just advertising -- and half of that advertising was wasted, but I didn’t know which half it was -- wouldn’t I take some of that money and devote it to my own content creation competencies? This is no-brainer. Any company, after a certain critical mass of size and revenue, should look at -- among their marketing spend and advertising spend -- their content creation spend.

Whitmore: Being a student of media, I have observed a collective lack of will across most segments most of the time. When you see the exceptions to this, that’s when you see a feature story. That’s when you see a Q&A. The journalists are out there beating the bushes to find people with spines who do something other than what's expected of them.

Gardner: You know as a former journalist -- and I should say you're still a journalist in what you're doing -- when you beat the bushes, there are always stories out there. There is another thing that's interesting, there's something called News@Cisco, and Cisco Systems created it like a newsroom.

Whitmore: I love that site. That is the absolute archetype for vendor publishing, as far as I'm concerned.

Gardner: There it is. You can go in and say, “We want to talk to you. We're just fine in the field -- whether it’s a sales person, an engineer, another blogger, an evangelist -- what's news and interesting and happening in the communities that affect Cisco? Let’s talk about it. Let’s publish it.” There's plenty of great stuff in there.

Whitmore: Well, that’s a good place to send people. It’s newsroom.cisco.com I believe or is it news.cisco.com?

Gardner: Or you could just go to Google and type News at Cisco, right? I mean, why even think about the site? You go to the search engine. It’s the same way that your clients and prospects are going to find your stuff.

Whitmore: Well, I guess I’m old school and I never realized it. I tried to think of the destination but you're right, I don’t need to, and that sort of makes your point.

Gardner: You can call it lazy but, darn it, it works, it’s productive. If you use search, not just for search, but for navigation, that’s just another reason to look at that as a place you have to be.

Well, we've been having an interesting discussion. I want to thank you Sam, but we're out of time. We have covered some Marketing 2.0, maybe even some press release 2.0. I've been tracking what folks like Shift and Edelman and some of these other firms are doing, where they create a whole slew of rich content that becomes available when a press release or a news event happens, I think it’s very similar thinking to what we've been describing.

Whitmore: That’s right, a content stack. We probably don’t have the time to get into that, but here are the two things, the two litmus tests, that I would point to regarding this social media press-release thing. Number one, who are the vendors using this approach and do they continue to use it once they have started? Do they stick with it?

The other thing is, are journalists publicly saying, "This helps me do my job better and I'm inclined to write longer or richer pieces when I'm communicated to in this new way?" When I start to see critical mass in both of those areas, then we’ll know that the trend is taking hold. Until we see that, I'm still skeptical

Gardner: Well, I would offer one more opportunity for how it could be gauged as a return on investment, and that would be when you do a search on a company. If any of those pieces of press release 2.0 content actually start rising up, then it’s served its purpose too.

Whitmore: You've done it to me again. I didn’t think of "search" first.

Gardner: "Search" -- it’s the new media.

Whitmore: Even though I started with it in this podcast interestingly enough.

Gardner: Search and RSS, yeah.

Whitmore: That’s right. Well, Dana, I enjoyed it as always. It’s great to talk with you.

Gardner: Right, we've been talking here today with Sam Whitmore. He is the founder and editor of Sam Whitmore’s Media Survey at mediasurvey.com. or, heck, just go to Google and type in "Media Survey" or "Sam Whitmore," and you’ll get there.

This is Dana Gardner, principal analyst at Interarbor Solutions, and you have been listening to BriefingsDirect. Thanks.

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Transcript of Dana Gardner’s Podcast on Marketing 2.0 with Sam Whitmore. Copyright Interarbor Solutions, LLC, 2005-2007. All rights reserved.