Transcript of BriefingsDirect podcast on IONA Apache CXF and open-source Web services frameworks.
Listen to the podcast. Sponsor: IONA Technologies
Dana Gardner: Hi, this is Dana Gardner, principal analyst at Interarbor Solutions, and you’re listening to BriefingsDirect.
Today, a sponsored podcast discussion about Apache CXF, an open-source Web services framework that recently emerged from incubation into a full project. We are going to be discussing where CXF is, what are the next steps, how it is being used, what the market is accepting from open-source Web services and service-oriented architecture (SOA) infrastructure, and then, lastly, a road map of where CXF might be headed next.
Joining us to help us understand more about CXF, is Dan Kulp, a principal engineer who has been deeply involved with CXF for a number of years. He works at IONA Technologies. Welcome back to the show, Dan.
Dan Kulp: Thank you, it's good to be here.
Gardner: We are also joined by Raven Zachary, the open-source research director at The 451 Group. Welcome to the show, Raven.
Raven Zachary: Thank you.
Gardner: And we are joined by Benson Margulies, the CTO of Basis Technology. Welcome, Benson.
Benson Margulies: Thank you, good day.
Gardner: Let's start with you, Benson. Tell us a little bit about Basis Technology. I want to hear more about your company, because I understand you are a CXF user.
Margulies: Basis is about a 50-person company in what we call linguistic technologies. We build software components that do things like make high-quality, full-text search possible in languages such as Arabic and Chinese -- or do things like tag names and text, which is part of information retrieval.
We have customers in the commercial and government spaces and we wound up getting interested in CXF for two different reasons. One is that some of our customers have been asking us over time to provide some of our components for integration into a SOA, rather than through a direct application programming interface (API), or some sort of chewing gum and baling wire approach. So, we were looking for a friendly framework for this purpose, and CXF proved to be such.
The other reason is that, for our own internal purposes, we had developed a code generator that could read a Web-service description file WSDL and produce a client for that in JavaScript that could be loaded into a browser and tied back to a Web service. Having built it, we suddenly felt that we would like some help maintaining it. We went looking for an open-source framework to which we could contribute it, and CXF proved to be a friendly place for that too.
Over a period of time, to make a long story short, I wound up as a CXF committer. So, Basis is now both a corporate user of CXF as a delivery vehicle for our product, and also I am a committer focused on this JavaScript stuff.
Gardner: Great. You used the word "friendly" a couple of times. Let's go to Raven Zachary. Raven, why do people who go to open-source code and projects view it as friendly? What's this "friendly" business?
Zachary: Well, there are different motivations for participating in an open-source community. Generally, when you look at why businesses participate, they have a common problem among a peer set. It could be an underlying technology that they don't consider strategic. There are benefits and strength in numbers here, where companies pool together resources to work together on a common problem.
I think that for individual developers, they see it as a chance to do creative problem-solving in off hours, being involved in the team project. Maybe they want to build up their current opportunities of expertise in another area.
In the case of a CXF, it certainly has been driven heavily by IONA and its acquisition of LogicBlaze, but you had other individuals and companies involved -- Red Hat, BEA, folks from Amazon and IBM, and Benson from Basis, who is here talking about his participation. The value of this opportunity for many different commercial entities is coming together to solve a common set of problems.
Gardner: Let's go to Dan Kulp. Dan, tell us a little bit about CXF and its current iteration. You emerged from incubation not that long ago. Why don't you give our listeners, for those who are not familiar with it, a little bit of the lineage, the history of how CXF came together, and a little bit about the current state of affairs in terms of its Apache condition or position?
Kulp: CXF was basically a merger of the Celtix project that we had at ObjectWeb, which was IONA sponsored. We had lot of IONA engineers producing a framework there. There was also the XFire Project that was at Codehaus. Both of these projects were thinking about doing a 2.0 version, and there was a lot of overlap between the two. So, there was a decision between the two communities to pool the resources and produce a better 2.0 version of both XFire and Celtix
As part of that whole process of merging the communities, we decided to take it to Apache and work with the Apache communities as a well-respected open-source community.
So that's the long-term history of CXF. We spent about 20 months in the incubator at Apache. The incubator is where all the new projects come in. There are a couple of main points there, and one is the legal vetting of the code. Apache has very strong requirements about making sure all of the code is properly licensed, but is compatible with the Apache license, that the people that are contributing it to have done all of the legal requirements to make sure that the code meets those things. That's to protect the users of the Apache projects, which, from a company and user standpoint, is very important.
A lot of other projects don't do that type of legal requirement. So, there are always iffy statements around that. That was one important thing. Another very important part of the Apache incubator is building the community. One of the things they like to make sure is that any project that goes out of the incubator is in a very diverse community.
There are people representing a wide range of companies with a wide range of requirements, and the idea is to make sure that that community is long-term stable. If one company should suddenly be acquired by another company, just goes bankrupt and out of business, or whatever, the community is going to still be there in a healthy state. This is so that you can know that that the Apache project is a long-term thing not a short term.
Gardner: Could I pause there, and could you tell us who are the major contributors involved with CXF at this point?
Kulp: IONA is still heavily involved, as is Basis Technology, a couple of IBMers, as was mentioned earlier, and a couple of Red Hat people. There is one person who is now working for eBay who is contributing things, and there are a few people who I don't even know what company they work for. And that's a good thing. I don't really need to know. They have a lot of very good ideas, they are doing a lot of great work, and that's what's important about the community. It's not really that important, as long as the people are there participating.
Gardner: Okay. Things move quickly in this business. I wonder if any of our panelists recognize any shifts in the marketplace that have changed what may have been the optimum requirement set for a fully open-source Web-services framework from, say, two or three years ago, when these projects came together. What has shifted in the market? Does anyone have some thoughts on that?
Margulies: Well, Dan and Glen, who was another one of our contributors, and I, were having a lunch today and we were discussing the shift in the direction from old JAX-RPC framework to JAX-WS/JAXB, the current generation of SOA standards. That has very much become the driving factor behind the kits.
CXF gets a lot of attention, because it is a full open-source framework, which is completely committed to those standards and gives easy-to-use, relatively speaking, support for them and, as in many other areas, focuses on what the people in the outside world seem to want to use the kit for, as opposed to some particular theoretical idea than any of ours about what they ought to want to use it for.
Gardner: Thank you, Benson. Anyone else?
Kulp: Yes, one of the big things that comes to mind when this question comes up is, is the whole "code first" mentality. Several years ago, in order to do Web services, you had to know a lot of stuff about WSDL, extensible markup language (XML) schema. You had to know a lot of XMLisms. When you started talking about interop with other Web Services stacks, it was really a big deal, because these toolkits exposed all of this raw stuff to you.
Apache CXF has is a fairly different approach of making the code-first aspect a primary thing that you can think about. So, a lot of these more junior level developers can pick up and start working with Web services very quickly and very easily, without having to learn a lot of these more technical details.
Gardner: Now, SOA is a concept, a methodology, and an approach to computing, but there are a number of different infrastructure components that come together in various flexible ways, depending on the end user's concepts and direction. Tell us a little bit about how CXF fits into this, Dan, within other SOA infrastructure projects, like ServiceMix, Camel, ActiveMQ. Give us the larger SOA view, the role CXF plays in that. Then, I am going to ask you how that relates to IONA and FUSE?
Kulp: Obviously, nowadays, if you are doing any type of SOA stuff, you really need some sort of Web-service stack. There are applications written for ServiceMix and JBI that don't do any type of SOAP calls or anything like that, but those are becoming fewer and farther between. Part of what our Web services bring is the ability to go outside of your little container and talk to other services that are available, or even within your company or maybe with a business partner or something like that.
A lot of these projects, like Camel and ServiceMix, require some sort of Web-services stack, and they've basically come to CXF as a very easy-to-use and very embeddable service stack that they are using to meet their Web-services needs.
Gardner: Alright, so it fits into other Apache projects and code infrastructure bases, but as you say "plug-in-able," this probably makes it quite relevant and interesting for a lot of other users where Web-services stack is required. Can you name a couple of likely scenarios for that?
Kulp: It's actually kind of fascinating, and one of the neatest things about working in an open-source project is seeing where it pops up. Obviously, with open-source people, anybody can just kind of grab it and start using it without really telling you, "Hey, I'm using this," until suddenly they come to you one day saying, "Hey, isn't this neat?"
One of the examples of that is Groovy Web service. Groovy is another dynamic language built in Java that allows you to do dynamic things. I'm not a big Groovy user, but they actually had some requirements to be able to use Groovy to talk to some Web services, and they immediately started working with CXF.
They liked what they saw, and they hit a few bugs, which was expected, but they contributed back to CXF community. I kept getting bug reports from people, but was wondering what they were doing. It turns out that Groovy's Web-services stack is now based on CXF. That's type of thing is very fascinating from my standpoint, just to see that that type of stuff developed.
Margulies: I should point out that there has been a tendency in some of the older Web-service platforms to make the platform into a rather heavy monolithic item. There's a presumption that what you do for a living with a Web service is stand up a service on the Web in one place. One of CXF's advantages is what you want to do is deliver to some third party a stack that they put up containing your stuff that interacts with all of their existing stuff in a nice light-weight fashion. CXF is un-intrusive in that regard.
Gardner: And, just as a level-set reality check, over to Raven. Tell me a little bit about how this mix-and-match thing is working among and between the third parties, but also among and between commercial and open source, the infrastructure components.
Zachary: The whole Apache model is mix and match, when you are talking about not only a licensing scheme. The Apache license, is a little easier for commercial vendors to digest, modify, and add in, compared to the GPL, but also I think it's the inherent nature of the underlying infrastructure technologies.
When you deploy an application, especially using open source, it tends to be several dozen distinct components that are being deployed. This is especially true in Java apps, where you have a lot of components or frameworks that are bundled into an application. So, you would certainly see CXF being deployed alongside of other technologies to make that work. Things like ServiceMix or Camel, as you mentioned, ActiveMQ, Tomcat, certainly Apache Web Server, these sorts of technologies, are the instrument to which these services are exposed.
Gardner: Now, let's juxtapose this to the FUSE set. This is a commercially supported, certified, and tested SOA and Web-services component set. The FUSE services framework is derived from CXF. Dan, tell us a little bit about what is going on with FUSE and how has that now benefited from CXF moving from incubation into full Apache?
Kulp: As you mentioned, the FUSE services framework is basically a re-branded version of Apache CXF. If you go into a lot of these big customers, like banks or any of the major type of customers, and they deploy an application, they want to have some level of support agreement with somebody that says if a bug is found or a problem crops up, can they get somebody on the phone and get a bug fixed relatively quickly.
That's what the FUSE product line is basically all about. It's all open-source, and anybody can download and use the stuff, but you may not get the same level of support from the Apache community, as you do with the FUSE product.
The Apache communities are pretty much all volunteer-type people. Pretty much everybody is working on whatever their own agenda is, but they have their own expertise. So, they may not even have time, and they may be out on leave or on vacation or something like that. Getting the commercial-level of support from the Apache community can sometimes be a hard sell for a lot of these corporations, and that's why what FUSE really brings is a support agreement. You know that there is somebody there to call when there is a problem.
It's a two-way relationship. Obviously, if any of those customers come back with bugs and stuff, the IONA people will fix them and get them pushed into both Apache and FUSE. So, the bugs and stuff get fixed, but the other thing that IONA gets from this is that there's a lot of ideas in the Apache communities that we may not have thought of ourselves.
One good example of this is that JavaScript thing that Benson mentioned earlier. That's not something IONA really would have thought of at the beginning, but this is something that we can give back to our customers saying, "Hey, isn't this a neat idea?" So, there are a lot of benefits coming from the other people that aren't IONA in these communities actually providing new features and new ideas for the IONA customers.
Gardner: Okay, you came off incubation in April, is that correct?
Kulp: Yes.
Gardner: Tell us about what's going on now. What's the next step, now that it's out of that. Is this sort of a maintenance period, and when will we start to think about seeing additional requirements and functionality coming in?
Kulp: There are two parts to that question. Raven and I graduated, and we were ready to push out 2.1. Apache CXF 2.1 was released about a week after we graduated, and it brought forth a whole bunch of new functionality. The JavaScript was one of them. A whole new tooling was another thing, also CORBA binding, and there is a whole bunch of new stuff, some REST-based APIs. So, 2.1 was a major step forward, compared to the 2.0 version that was ready last August, I believe.
Right now, there are basically two tracks of stuff going on. There are obviously a lot of bug fixes. One of the things about graduating is that there are a lot of people who don't really understand what the incubator is about, and so they weren't looking in the incubator.
The incubator has nothing to do with the quality of the code. It has more to do with the state of the community, but people see the word "incubator" and just say, "No, I'm not going to touch that." But, now that they we're graduated, there are a lot more people looking at it, which is good. We're getting a lot more input from users. There are a lot of people submitting other ideas. So, there is a certain track of people just trying to get some bug fixes and getting some support in place for those other people.
Gardner: I am impressed that you say "bug fixes" and not "refinement." That's very upfront of you.
Kulp: Well, a lot of it is refinement too, and, to be honest, there is a bit of documentation refinement that is going on as well, because with new people using it, there are new expectations. Their old toolkits may have done things one way, and the documentation may not reflect well enough, "Okay, if you did it this way in the old toolkit, this is how you do the same thing in CXF."
Margulies: If I could pipe up with a sociological issue here with open source which says, it's a lot easier to motivate someone to run in and diagnose a defect or a missing feature in the code and make the fix than to get the additional motivation to go over to the "doc" side and think through, "How the heck are we going to explain this, and who needs to have it explained to them." We're really lucky, in fact. We have at least one person in the community who almost entirely focuses on improving the doc as opposed to the code.
Gardner: Okay. So, we're into this maturity move. We've got a lot more people poking at it and using it. We're going to benefit from that community involvement. We've mentioned a couple of things that struck me a little earlier -- the Groovy experience and JavaScript. I guess there's this perception by many whom I've talked to that Web services is interesting, but there's a certain interest level too in moving into more dynamic languages, the use of RESTful for getting out to clients, and thinking about Web services in a broader context.
So, first let's go to Benson. Tell us why this JavaScript element was important to you and where you think the kind of mindset is in the field around Web services and traditional Web services-star specifications and standards?
Margulies: We went here originally, because while we built these components to go into the middle of things, we have to show them off to people, who just want to see the naked functionality. So, we built a certain amount of demo functionality as Web applications, with things from Web pages. And, the whole staff was saying, "Oh gosh, first we have to write a JSP page, and then we have to write some Beans, and then we have to package it all up, and then we have to deploy it."
It got really tiresome. So we went looking for a much thinner technology for taking our core functionality and making it visible. It dawned on us that perhaps you could just call a Web service from a browser.
Historically, there's been such a mentality in the broad community because you "couldn't possibly do that." "Those Web service, XML messages, they are so complicated." "Oh, we could never do that." And, several of the dynamic languages, SOAP, or Web-service kits that have shown up from time to time in the community were really weak. They barely worked, because they're very old versions of the Web-service universe. As Web-service standards have moved into stronger XML, they got left behind.
So, not knowing any better, we went ahead and built a code generator for JavaScript that could actually talk to a JAX-WS Web service, and I think that's an important direction for things to go. REST is a great thing. It allows very simple clients to get some data in and out of Web services, but, people are building really big complicated applications and dynamic languages these days, things like Ruby. For Web services to succeed in that environment, we need more of what we just did with the JavaScript. We need first class citizenship for dynamic languages as clients and even servers of Web services.
Gardner: Let's take it over to Raven. Tell us, from the analyst perspective, what you see going on mentality wise and mindshare wise with Web-services specs, and do you think that there's a sort of "match made in heaven" here between something like CXF and some of these dynamic languages?
Zachary: Well, looking back on the history of CXF being the merging of two initiatives -- Celtix from IONA and XFire from Codehaus -- and spending last few years in the incubator, and now coming out of the incubator in April, bringing together those two initiatives is very telling in terms of the stronger initiative, based on the basis of two existing open-source initiatives.
I like the fact that in CXF they are looking at a variety of protocols. It's not just one implementation of Web services. There's SOAP, REST, CORBA, other technologies, and then a number of transports, not just HTTP. The fact is that when you talk to enterprises, there's not a one-size-fits-all implementation for Web services. You need to really look at services, exposing them through a variety of technologies.
I like that approach. It really matches the needs of a larger variety of enterprise organizations and just it's a specific technology implementation of Web services. I mean, that's the approach that you're going to see from open-source projects in the space. The ones that provide the greatest diversity of protocols and transports are going to do quite well.
Gardner: Dan, you've probably heard this. Some of the folks who are doing more development with dynamic languages and who are trying to move toward light-weight webby applications have kind of an attitude going on with Web-services specs. Have you noticed that and what do you think is up with that? Has that perhaps prevented some of them from looking at CXF in evaluating it?
Kulp: Yeah, in a way, it has prevented them, but Web Services are pretty much everywhere now. So, even though they may not really agree with some of Web-service ideas, for their own user base to be able to grow, they have to start thinking about how do we solve that problem, because the fact is that they are there.
Now, going forward, REST is obviously a big word. So, whatever toolkit you're looking at you need to be able to talk REST as well, and CXF is doing a little bit there. If you go back, there's CORBA stuff that needs to be talked to. With CXF, you don't just get the SOAP part of SOA, you get some of these additional technologies that can help you solve a wider range of problems. That's very important to certain people, especially if you're trying to grow a user base.
Gardner: Alright, so you've obviously benefited, the community has benefited from Benson and Basis Technology offering in what they did with JavaScript. I assume you'll be interested in committers to further that across more languages and more technologies?
Kulp: Oh, definitely. One of the nicest things about working in Apache projects is that it's an ongoing effort to try to keep the community growing and getting new ideas. As you get more people in, they have different viewpoints, different experiences, and all that can contribute to producing new ideas and new technologies, and making it easier to solve a different set of problems.
I always encourage people that, if they're looking in the CXF code, and they hit a bug, it's great if we see them submit a patch for that, because that shows that they're actually digging in there. Eventually, they may say, "Okay, I kind of like how you did that, but wouldn't it be neat if you could just do this?" And then maybe they submit some ideas around that and become a committer. It's always a great thing to see that go forward.
Gardner: Let's go around the table one last time and try to predict the future when it comes to open-source Apache projects, this webby application environment, and the larger undertaking of SOA. Dan, any prophecies about what we might expect in the CXF community over, say, the next 12 months?
Kulp: Obviously, there's going to be this ongoing track of refinements and fixes. One of nice things of the CXF community is that we're very committed to supporting our existing users and making sure that any bug fixes or bugs that they encounter get fixed in a relatively timely manner. CFX has a very good history of doing very frequent patch releases to get fixes out there. So, that's an ongoing thing that should remain in place and it's a benefit to the communities and to the users.
Beyond that, there's a whole bunch of other ideas that we're working on and fleshing out. The code first stuff that I mentioned earlier, we have a bunch of other ideas about how to make code-first even better.
There are certain tool kits that you kind of have to delve down into either configuration or WSDL documents to accomplish what you want. It would be nice if you could just embed some annotations on your code, or something like that, to accomplish some of that stuff. We're going to be moving some of those ideas forward.
There's also a whole bunch of Web-services standards such as WS-I and WS-SecureConversation that we don't support today, but we are going to be working on to make sure that they are supported. As customers or users start demanding other WS technologies, we'll start considering them, as well. Obviously, if new people come along, they'll have other great ideas, and we would welcome those as well.
Gardner: Alright. Raven Zachary, what do you see as some of the trends that we should expect in Open Source infrastructure particularly around SOA and Web services interoperability over, say, the next 12 months?
Zachary: We've had for the last decade or so a number of very successful open-source infrastructure initiatives. Certainly, Apache Web Server Linux as an operating system and the application middleware stack -- Tomcat, Geronimo, JBoss -- have done very well. Open source has been a great opportunity for these technologies to advance, and we're still going to see commercial innovation in the space. But, I think the majority of the software infrastructure will be based on open standards and open source over time and then you'll see commercialization occur around the services side for that.
We're just starting to see the emergence of open-source Web services to a large extent and I think you're going to see projects coming out of the Apache Software Foundation leading that charge as other areas of the software infrastructure have been filled out.
When you look at growth opportunities, back in 2001, JBoss app server was a single-digit market share, compared to the leading technologies at the time, WebSphere from IBM and WebLogic from BEA. In the course of four years, that technology went from single-digit market share to actually being the number one deployed Java app server in the market. I think it doesn't take much time for a technology like CXF to capture the market opportunity.
So, watch this space. I think this technology and other technologies like it, have a very bright future.
Gardner: I was impressed and I wrote a blog recently about this emerging from incubation. I got some really high numbers, which indicated some significant interest.
Last, I am going to Benson at Basis Technology as a user and a committer. How do you expect that you'll be using something like CXF in your implementations over the next 12 months?
Margulies: Well, we're looking at a particular problem, which is coming up with a high-performance Web-service interface to some of our functions, where you put a document and you get some results out. That's quite challenging, because documents are sort of heavyweight, large objects, and the toolkits have not been wildly helpful on this.
So, I've scratched some of the necessary services on CXF and I expect to be digging deeper. The other thing I put in as a comment as a committer is that one of the most important things we're going to see is a user support community.
Long before you get to the point where someone is a possible committer on the program, there is the fact that the users help each other in using the product and using the package, and that's a critical success factor. That community of people who read the mailing list just pitch in and help those newbies find their way from one end to the other.
Gardner: Well, great. Thank you so much. I think we've caught up with CXF, and have quite a bit to look forward to over the coming quarters and months. I want to thank our panel. We've been joined by Dan Kulp, principal engineer at IONA Technologies; Raven Zachary, open source research director for The 451 Group; and Benson Margulies, the CTO at Basis Technology. Thank, everyone.
Kulp: You're very welcome.
Zachary: Thank you.
Margulies: Thank you.
Gardner: This is Dana Gardner, principal analyst at Interarbor Solutions. You have been listening to a sponsored BriefingsDirect Podcast on Apache CXF. Thanks and come back next time.
Listen to the podcast. Sponsor: IONA Technologies.
Transcript of BriefingsDirect podcast on IONA Apache CXF and open-source frameworks. Copyright Interarbor Solutions, LLC, 2005-2008. All rights reserved.
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Edited transcript of periodic BriefingsDirect Analyst Insights Edition podcast, recorded May 9, 2008.
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Dana Gardner: Hello, and welcome to the latest BriefingsDirect Analyst Insights Edition, Volume 29, a periodic discussion and dissection of software, services, cloud computing, and 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 distinguished panel this week, and this is the week of
Joe McKendrick: Thanks, Dana, good to be here.
Tony Baer: Hey, Dana, top of the morning.
Gardner: And, last on our panel this week, Phil Wainewright, an independent analyst, director of Procullux Ventures, and also a prolific software-as-a-service (SaaS) blogger. Welcome back, Phil. [Update: See Phil's blog on this topic.]
Phil Wainewright: Great to be back, Dana.
But, before we get into a discussion on cloud computing's economic future, let's go around the table. I was at JavaOne in San Fransisco this week, and I understand that, Phil, you were attending a Salesforce.com event in
Wainewright: Yes, indeed, their first full Dreamforce event in
Wainewright: It was a great to actually have the Salesforce crew in my own timezone, so that I could take all of that on board. We had the usual two-and-a-half-hour Marc Benioff Dreamforce keynotes, and he was the one that got ragged this time, instead of me, so that was nice.
Wainewright: Well, that's right, although to be honest, it was my first Dreamforce, because I had never made it to San Fransisco for the Dreamforce events in the fall, and that's something that Marc has often complained to me about. So, it was good of him to bring the show over to me. I appreciate that, Marc, thanks.
Wainewright: Oh, yes, it is. There were 2,500 people there. So, it was a big show. Some of the independent software vendors (ISVs) who have been putting software on the force.com platform are actually from
Unit 4 Agresso recently bought CODA, which was an independent company listed on the
Wainewright: Well, I think it's an incoming tide. Whether it's got the speed and force of a tidal wave is another matter.
McKendrick: Can't you call it one of the "Four Horsemen of the SaaS Apocalypse" or something like that?
Wainewright: People started talking to me earlier this week about these four vendors, all listed vendors on the stock market, that have got a certain size. Taleo just did an acquisition this week that brings them out to the 200 million-a-year run rate, close to the run rate that Concur has. Taleo is talent management, and Concur is travel and expense management. Then, you have Omniture, which is Web analytics. They expect to do around about 300 million this year. Then, the big Daddy of them all, force.com, is looking to do $1 billion this year.
You are starting to see the leaders emerge now. Thank goodness it's not just Salesforce, but kind of gang of four, to use another foursome analogy, and they are riding the wave. I'm not quite sure what apocalypse it is yet. We might argue that it's an apocalypse for the conventional software vendors. Certainly,
Gardner: And, this event came right on the heels of the news last weekend that Microsoft, at least for the time being, is walking away from its bid for Yahoo! And, from comments from Bill Gates and others, it seems that Microsoft might be fully done with that merger or proposition. Was there any talk of that or did any Benioff mention it?
Wainewright: No, he was strangely silent, actually. The president of Google EMEA, was one of the people who came on stage during the Benioff keynotes. So, there was a talk about Salesforce and Google teaming up and working together, but very little about Microsoft.
The thing that interested me about Benioff's presentation, and this is something that I blogged about, was that he is really positioning force.com not as the platform of the future, but as one of the platforms of the Web, and the one that he believes will be the leading platform for enterprise applications. But, he is now starting to talk about a whole forest of different platform-as-a-service (PaaS) vendors and acknowledging other platforms -- like Google App Engine, Amazon Web Services, and even Facebook -- as platforms people use to build functionality in the sky.
That's an interesting change of emphasis. In the past, it was always about. "Salesforce is a platform of the future. Microsoft Windows is the platform of the past. And, we are going to replace Microsoft as everyone's favorite platform."
It's good that he's now talking about the context of the Web being everyone's favorite platform and Salesforce's force.com being just one of the platforms that you can choose to put functionality on the Web.
Wainewright: That's right, and perhaps that change of emphasis is something that Microsoft has not quite taken on board yet, and that's one of the reasons they thought buying Yahoo might be the way to go. Perhaps that's a topic we will get into later in the podcast.
Gardner: Okay. Let's go over to Tony in
Baer: I have been observing from afar. I have been remote, as they say, but have been devoting most of my attention to JavaOne. I do want to add a thought there about Microsoft or Microhoo and also about Marc Benioff's thoughts on an emerging SaaS ecosystem.
One thing I want to make clear is that when you just have one company in the market, essentially it's one-trick pony. When you have competitors, that validates the market. What Benioff was indirectly saying there is that if SaaS is no longer synonymous with Salesforce, that now validates the SaaS platform. It vindicates his contention that SaaS is a platform, and that the future is "no software."
That's one thought. The other thought, before going on JavaOne, regards Microsoft walking away from Yahoo. My sense is that Yahoo is not going to get any better price for their shares than what Microsoft was going to offer. But, I think it is a blessing in disguise, at least for Microsoft, if not for Yahoo shareholders.
This would have been a horrendous deal for Microsoft. This is not the type of deal that they do best. They do very well in making small, very strategic technology acquisitions. What's gotten lost in the noise here is that Microsoft does have this stake in Facebook, which only happens to be "The most Popular," software development platform in the social computing space.
And, I've got to believe that maybe they are facing a war in ads, but why not work around this, instead of co-opting this, to become or federate with the social application development platform of choice.
Gardner: I think that there are some indications that the bloom is off the rose of social networking, both as a significant revenue generator, as well as an application development platform, at least for one of the social networks to become a development platform. That's from some recent revenue indicators from Google that its relationship with MySpace has not proven to be as monitizable as they expected.
Also, some recent statistic show that the types of applications that have been generated on Facebook are very tenuous, very one-off or fun things that would appeal to teenagers, but not with any significant depth or business value. The amount of activity from developers on Facebook has been slacking off, or at least plateauing, which is not a good indicator.
So I take your point that Microsoft is in the game of social networking, but I am not sure if that's enough to do much for them in terms of overall online activity.
Baer: I'll put this way. For social networks, we are getting into kind of a Gartner-style "trough of disillusionment" there. But, I see this thing fitting more into the mold of the strategic technology buys or technology acquisitions that Microsoft does, because, if you think about it, this has not been tapped.
I totally agree with you. I'm very turned off by the types of applications and sort of frat-partying environment that you have on Facebook. But, I think there's a lot of untapped potential in terms of turning some of these techniques and using them to extend enterprise applications, whether they be on premises, in the cloud, or what have you. So, I could see this as being potentially an extension of the Visual Studio Platform in the .
Wainewright: I'm just thinking about advertising and Facebook. People are surprised that for these social networking sites the ads don't work. I remember back in the Web 1.0 boom and the dot-com boom, one of the things that was interesting was the discussion sites were very bad at generating ad revenue, because people didn't click on the ads.
The cost per thousand (CPM) for discussion sites, or for the discussion area of a site, was always a lot lower than other types of sites that were more information heavy. So it's old news about kind of sites where people follow what other people are saying. It's a bad site for advertising, because you are interested in the conversation. You don't go there to click away on something else.
Baer: That's right, and it's not necessarily the metadata of the discussion content that creates some affinity-based relationship between buyer and seller as a result, and, therefore, you get a higher value CPM advertising revenue benefit. It does seem to push it down to a lower common denominator of just page views for the sake of page views.
Wainewright: Yeah, that's right. People start chasing page views without remembering the reason that they are chasing is to generate value for advertises. They think, "We've got lots of page views," but they don't think back to whether those page views are going to deliver value.
Our topic is what are going to be the revenue models now that we have a fairly good expectations of SaaS, Web services, publicly available APIs, mashups, and increasingly robust cloud community of not only host and providers and infrastructure providers, but ecologies.
I emphasize the plural of development activities that create business value in some form over the wire. This is all well and good for the end user, but in order to support such an ecology, there needs to be revenue commensurate with the cost, perhaps even leaving some margin on the table.
Let's go to you, Joe McKendrick. You've been studying SOA for some time. You've been familiar with data for some time, technologically and functionally, but let's look at the economics of this as we move more toward an online world. Microsoft has indicated this through its Yahoo purchase attempt, desperate as it may have been and now perhaps squashed as it may be.
If you see the future as an online world, do you have any sense of how the money is going to be made, now that we are segueing into this new era?
McKendrick: Good question, Dana. And, in fact, Microsoft has given us another clue. Another memo from Ray Ozzie surfaced a couple of weeks back. You may recall the memo back in 2005, the famous "turn the world upside down" memo that talked about the advertising support of the online model for software. He kind of reinforced that with his latest memo.
It wasn't saying, "We must offer software advertising to support software," but it was more of a discussion about the social mesh, the community, the social networking, a paradigm that's emerging. It's way too early in the game, but I think it's inevitable. We are really seeing it on the consumer side. It's going to be interesting, but I think it's going to leach into the enterprise over the next couple of decades as well. I'm talking years from now, but it's definitely a model that will be sustaining consumer computing. We are seeing that emerging on the social computing side.
Look at what Google has done with just a small slice of the advertising market -- text ads associated with search and search criteria that they are going to start automating through a similar auction bid process, advertising that goes on banners ads across the Web, beyond just the text ads.
Then, they've got their designs on radio, magazine, and newspaper advertisements, particularity done at the local level. They've got designs on television advertising across both cable and broadcast, but certainly with the television that goes out over the Web. So, Google is looking at a potential of hundreds of billions of dollars of market, where Microsoft's annual revenues are what -- between $40 and $50 billion I believe? We're talking about several significant multiples of potential revenue here when advertising is factored as a full business.
So, just using as the factoid, Phil Wainewright, what do you think about the opportunity for software companies to take more and more of this advertising pie?
Wainewright: Well, we touched on this in our discussion last week, and I really think people have got this completely the wrong way around. To focus on advertising is just so "0.0," to coin a phrase. Advertising exists only because we don't have the Web. Advertising is something the B2B market has to use through magazines, TV shows, or whatever, because they couldn't reach the consumer directly.
Now, the Web enables people to reach potential consumers and business prospects directly, rather than having to go through this advertising. So, the idea that the software industry is going to get funded by advertising has got it completely the wrong way around. Actually, what is going to happen is that business is increasingly going to use software in order to get closer to its consumers and its prospects. It can actually skip having to spend the money on advertising in order to make that connection.
Let me explain how that might work, instead of running adverts on sites that host discussions about bookkeeping services for small companies, for example, or instead of paying for search ads that pop up when people are searching on the Internet for bookkeeping services for small companies. As a small company, if you are using a financial application to run your company and you want some bookkeeping services, a bookkeeping service might pop up as a menu option in the software. You can sign up for and use an outsourced service over the Internet.
Instead of the bookkeeping service actually having to advertise on the search engines, in the publications, the discussion forums, and the social networking sites, they just pay to have their service made available within a software package that relates directly to the service that they are offering.
Therefore, it's not really advertising any more. It's just product placement at a point where the consumer or the business, in this case, actually needs that service.
McKendrick: Phil's got it exactly right. Another good example is mortgage calculator, something that popped up about 10 years ago on the Web. Mortgage calculator is software, and probably before 1998, if you wanted such software you had to go out and buy a package at Staples or Office Depot. Now, you can go to a mortgage company site, for those who are still looking for mortgages, and check out a calculator on site. The software is made available as a value-add. Phil has got it right in terms of their reverse. We have to look at this in a reverse sense.
Baer Joe you are so 2006, I have to say.
So we are moving from an advertising to a placement or even visibility value, and it becomes rent to those who can draw the people in. Does that sound reasonable?
Baer: I'd say so. Look at the Amazon model which isn't necessarily overt advertising, but its affinity. You just bought a book, say, on accounting and they'll say, "By the way, based on your pattern of orders, would you also like to get a book about taxes or something like that?" So, it's basically keeping it in context.
Just a couple of days ago I was reading an interview in one of the business journals with someone who was critiquing TV ads and saying, "You know something? These are so obsolete. I really hate watching this because, basically, when you're watching a program, statistically very small minority of the audience is interested in that particular product at that particular time."
You start looking at migration to digital broadcasting. At some point -- I don't know the exact technology mix involved -- combining that with the Internet, there will be some way of micro casting. There may be a large population segment watching a specific program, but you maybe identified in terms of which demographic you specifically are. It's almost sounding 1984-ish.
McKendrick: Tony, you are so 1984.
Wainewright: Tony, that's right. I think Google actually realizes that and understands that. Therefore what they are aiming to do is get into TV advertising and all these other sectors. These are vendors that enable this kind of personalization of the message, being a conduit between the prospects and the business that's trying to sell to that prospect, and using software automation to enable that.
They are thinking beyond the old model of advertising, and I think that's Microsoft's problem. Microsoft hasn't really understood this, is still thinking about online advertising as a segment, and is not looking beyond the wider opportunity to use the automation on the Web as a way of just bringing buyers and sellers close together.
This requires a tremendous amount of cloud compute, to the same levels we have seen in matching search criteria to results and then matching that to advertising. That advertising is then bought through an auction-bid process among those seeking the highest placement.
So if we take that same model and apply it to all sorts of different needs and wants of business, personal, entertainment, and luxury across the board, what do we call it? It's not really advertising.
Here is our chance at the BriefingsDirect Analyst Insights podcast to come up with a name for this thing. Any takers?
Wainewright: I've struggled with it actually, Dana. I have been planning a blogpost about this for probably a year. I saw someone really calling it "featuretisment," which I am not advocating, but it's a possibility. Maybe it's "online merchandising," maybe it is "placement," maybe it is just "promotion," rather than advertising. But, I think we do need a different word, because, if we use the word "advertising," we approach it too much from the old mindsets.
Baer: Here is one that I hopefully don't use, which is "lifestyle enhancement" or "lifestyle augmentation." I hope we don't use that.
Baer: I want to just shoot that one down immediately.
McKendrick: I want to throw another note in here. When we talk about social computing, the whole Web 2.0 paradigm world, we are talking about the incoming generation. You have the 20-something is coming in, and even younger than that.
These folks are well accustomed to SaaS, online/on-demand software and are accustomed to seeing advertising online. I have a nine year old daughter and her favorite sites are Webkinz in which you buy stuffed animal, get a special password code log in and you can virtually manage your Webkinz online. She loves that and --.
McKendrick: Yeah, Club Penguin is another one, Disney took that.
McKendrick: What's interesting is, 10 years ago, our kids would have had to go out and buy a CD and install a CD locally in the computer. These things are all delivered online to kids. Kids don't want this. My nine-year-old probably doesn't know how to install something from a CD.
McKendrick: Exactly. Everything is through the browser now. That's what they are expecting. That's what expected now. College students as well.
This statement came out loud and clear. Sam Palmisano says he is never going to put advertisements in anything
They need to consider some of these other more interesting business models, particularly in the context of business. We're not talking about a $15 music download or an $8 movie download. We're talking about anywhere from $50,000 to hundreds of thousands of dollars of purchasing that happens very rapidly across the entire B2B economy.
Any thoughts about how
Baer: Actually, take a look at the emerging model for downloading films or TV shows, that's probably is a better example. For a certain price you can get it without ads. For free, you get it with ads. I don't know if that directly applies, there maybe some sort of variation of that, which can keep Sam Palmisano's feeling that he can go to sleep at night.
Wainewright: I think they do. The subscription model does take, but I think you will still have indirectly funded applications, particularly for volume markets like the business markets, the small business market, and obviously the consumer market, which is indirectly funded.
The consumer doesn't pay, but it is supported by some kind of either advertising, commissions on product placement, or just the expectation that a certain percentage of free users will upgrade to a paid version, and, therefore, the free-user population is a marketing expense.
We see all of those models already in the SaaS segment. The thing that is going to make this a slow transition is having a set of subscription services, where there are lots of different providers being aggregated, and they're getting some cut off the subscription. These are big billing and settlement challenges.
Actually, the software, the infrastructure software, that can support doing all of that measurement and doing it accurately and dealing with all of the questions: "I want my money back -- how do I get my money back?" These are questions that come up when money changes hands. This is something that still hasn't been worked out properly.
I was interested to see that Salesforce is still at the first stages of working at providing billing and settlement for force.com. In a sense, they are probably behind other players in that space, in terms of having an infrastructure for doing that. I think that could be a brake on this kind of thing taking hold very quickly, simply because the technology doesn't exist yet.
Baer: Just to underscore your point, it's not only that they perfected it for their core business, they now are handling increasing portions. A lot of their business is business process outsourcing. So, they're saying, "We don't only deliver the product to your customer, but we will take on large chunks of the fulfillment process or the warranties service repair process." And, they've have got the billing mechanisms down for that.
Gardner: So, the intellectual value of understanding how to manage that process is what ultimately buoys them and makes them now part of a potentially larger virtual ecology, rather than physical.
Wainewright: Hold on! They are doing that as a single company, they are not doing it with all kinds of tiers and partners, who are all contributing their own services and wanting to bill and charge back for those services. So, it's an order of magnitude larger.
Gardner: Perhaps the message to them is that they should be thinking along these lines, taking what assets they have, and extending them into partnerships, APIs, and Web services that can be plugged in through a SOA, and perhaps they get some transactional revenues as a result.
McKendrick: Which should make force.com and
Those vendors who want to be positioned well in front of an activity, the fulfillment of the actual transaction financially, would be in extremely advantageous position. Even if they take a fraction of a percent per transaction, ultimately we are talking about a massive business, one that everyone essentially would have to do some level of business with.
Any thoughts about the transactional hub, and the cloud compute power that would be required to do that?
Baer: StrikeIron kind of hits upon that model. They offer a marketplace of Web services, and part of what they do with that paradigm is that for the software developers -- someone who creates a service and offers it through the StrikeIron service -- they handle the transactions, the micro transactions. You may get a few pennies each time some uses your service. I think their model is going to take off. I think there is lot of potential for the model. We are going to see a lot of micro transactions taking place across the Web in the entire network.
Any other thought about the role of Google and what other organizations might be able to step up to the plate in this regard?
Speaker: Amazon Web Services.
Wainewright: I was just going to say that Rearden Commerce is perhaps an example of a vendor that's getting into that opportunity. Rearden this week announced a funding, a $100 million in venture funding, which mainly came from American Express and Chase.
So we see travel booking and the credit card company are teaming up with the transaction providers or the transaction handlers and getting at this nexus of bringing buyers and sellers together in the travel and employee services space. The amount of money that's being invested in Rearden says that people feel that there is quite a lot of potential in that particular vision.
Wainewright: Rearden Commerce provides software that allows you, as a business, to have your employees book their flights, their dining, and their corporate expense activity in a controlled, managed, and largely automated way. At the moment, most of their customers are relatively large customers or are customers of AMEX's travel management services. They charge a license fee at the moment, but I think in their road map, they see a potential to make money just by taking a cut out of the value of the transaction, rather than sending a traditional subscription license.
Baer: Just to go full circle here, I remember just talking to an enterprise vendor back in the 1990s. They were trying to export different mechanisms for pricing, and were talking about what they called at the time "risk sharing." Instead of charging the traditional license fee upfront, they were getting some sort of share of the benefits. Obviously, that never panned out, but today through SaaS, through micro-pricing and transactional pricing, and the acceptance of subscriptions and variable pricing, the time may have come for merging of some variance of that.
We have the "son of software" in services, also a place where Google is well-positioned. We also have the "son of financial services." That is the next era that will require the compute ability to manage on a real-time, micro level across multiple variations of transactions and very complex process and event landscapes.
And, once again, Google could rise up and be prominent in that place as well. It seems that the algorithm is what rules the future, and he with the best algorithm that can execute on that algorithm and draw in the most partners is the winner. Any thoughts?
Wainewright: And, therefore, Microsoft, as long as it talks about software, rather than focusing properly on services, is always going to be the loser.
Gardner: You need to focus on being able to develop, control and adjust the algorithms and then execute on all the variables within those algorithms at massive scale, and that becomes ultimately who's got the best compute cloud infrastructure. I'm not sure it's going to be built on Windows.
Baer: The interesting thing about Microsoft is their whole scale has been more penetration, it's never been scale in terms of that we can now conduct scalable processing.
McKendrick: It's getting to the point where the operating system is something that gets in the way. I think people will be happy with just some kind of device, such as a mobile device with a very thin layer and browser accessing everything out on the network.
Baer: And, from that standpoint, the one interesting thing that I saw from JavaOne this week, is the battle over where that rich Internet layer is going to be. Should it be within the Java virtual? Should it be in the flash runtime? You are talking about a couple battles of runtimes. You are not talking about battles of operating systems.
Wainewright: Dana, I would disagree with you about runtime on the client. I think it's going to be important, but I think it's the topic over another podcast.
Baer: Phil mentioned Rearden Commerce, and I want to add that all it's components are built on SOA-enabled services. So, there is a good lesson there. If you want to get out in the cloud, SOA paves the path.
Baer: It's the only way to go, Dana.
McKendrick: Thanks, Dana. It's great to be here.
Baer: Hey, good talking again.
Wainewright: Good to be here, Dana.
Transcript of BriefingsDirect podcast on the future of advertsing. Copyright Interarbor Solutions, LLC, 2005-2008. All rights reserved.
Saturday, May 03, 2008
BriefingsDirect Analyst Insights Podcast Examines WOA to SOA Continuum With Keen Eye on Cloud Computing
Edited transcript of periodic BriefingsDirect Analyst Insights Edition podcast, recorded April 24, 2008.
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 Analyst Insights Edition, Volume 28, a periodic discussion and dissection of software, services, cloud computing and 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 distinguished panel this week -- and this is the week of April 21, 2008 -- consists of Joe McKendrick, an independent analyst and prolific blogger. Welcome back, Joe.
Joe McKendrick: Thanks, Dana, happy to be here.
Gardner: We’re also joined by Jim Kobielus, senior analyst at Forrester Research. How do you do, Jim?
Jim Kobielus: Hi, Dana. Hi, everybody. Glad to be back in the saddle.
Gardner: Also joining us this week, Tony Baer, principal at onStrategies and also a prolific blogger. Welcome, Tony.
Tony Baer: Hey, Dana, good to hear you again.
Gardner: Also joining us is Brad Shimmin, principal analyst at Current Analysis. Hello, Brad.
Brad Shimmin: Hey there, Dana. Thanks for having us. Good to be back on the air with you as well.
Gardner: And making his debut on this particular podcast, Phil Wainewright. He is an independent analyst, the director of Procullux Ventures and a ZDNet blogger. Welcome to the show, Phil.
Phil Wainewright: Glad to be here, Dana.
Gardner: Our discussion this week will focus on several recent news events. We've seen the Live Mesh announcement from Microsoft -- and that came on the heels of the Application Engine from Google.
So, we're going to look at those. We're also going to put this discussion in the context of some recent back-and-forth blogging and some discussion about leadership around the intersection relationship between Web-oriented architecture (WOA) or "webby applications" and their environment and support technologies, as well as traditional services-oriented architecture (SOA).
I'm going to start with you, Tony. You just came out in the last day or two with a blog that referred to WOA as a "lowest common denominator." I wonder if you could help us understand what you mean by that.
Baer: My sense of it is that it’s technologies that are basically extremely accessible and relatively simple, and you don’t have a very complicated stack to wade through. They're technologies that have been around with Web developers for five to ten years, and, in that sense, it’s very much like Ajax, in that these are technologies that are there are and, guess what, we’ve found new ways to repurpose them.
We're using HTTP, plain old XML, and a RESTful style of service requests to essentially make the Web more dynamic, almost an application-centric environment. What it lacks is the perceived complexity or what would be considered as a capital "S" SOA, which should be the Web services stack. I've lost count of the number of standards or proposed standards. I know on the Wikipedia page, they list about 80. I think Linthicum has quoted numbers close to a couple of hundred.
Again, it’s part of a back-to-basics backlash against complexity, whether you’re perceived correctly or not. Like Ajax, it’s just have a loosey-goosey collection of things that were already out there.
Gardner: So, from your reference point, "lowest common denominator" isn't necessarily derogatory or a bad thing, but is inclusive and perhaps a positive.
Baer: If it gets you the information you need, who cares about how ugly it is?
Gardner: Okay, let’s take this to Brad Shimmin next. Brad, we have seen some opportunity now, public APIs, Web Services, even platform-as-a-service (PaaS) offerings. We all have seen Live Mesh from Microsoft, which I guess you can call a direct re-interoperability as a service function. What is relationship between WOA and SOA? Are they exclusive or are they separate? Can they overlap? How do you view that?
Shimmin: I just see the two as different sides of the same Rubik’s Cube that you can mix up and make into a complete absolute mess if you want to. Or, you can see them as highly simplified, depending on your viewpoint. If you are a developer, building an app that’s just going to run on the Web and you want to avail yourself of the benefits of SOA, you are probably going to want to use REST, because of its simplicity and applicability to services that are running on the wire or on the Web.
I see it as a continuum, the Rubik’s Cube continuum, if you will. But, now things are coming out of Google and Microsoft and I don’t see those two as being competitive with one another or similar, but as a representation of a very fast moving, huge wave.
We're being inundated right now from a number of vendors who are really pushing hard to make use of the Web as not just a form of connectivity, but as an actual platform for the services and software that we consume -- whether you are a consumer using Live Mesh to synchronize your computers or you’re an IT department looking to extend your B2B network without having to go to a VAN provider.
Gardner: Now, Phil Wainewright, you cover software as a service (SaaS) diligently. I'm not wedded to the term WOA. I'm happy with "webby applications" or 'web-facing technologies." Do you think that with these announcements from the cloud providers, you’re better off availing yourself of them as an enterprise or a service provider organization? Is there a benefit from a WOA perspective for absorbing and using these Web-based or cloud-based services, or are good old SOA technology and approaches just as good.
Wainewright: We really shouldn’t try and separate these two phenomena, because they are two sides of the same coin or two facets of the same Rubik’s Cube. To deliver something using WOA, any kind of serious provider is going to need to instantiate that within a SOA. So, there’s going to be SOA underneath a WOA provider.
We're going to look a little bit stupid if we start to debate the difference between one artificial term that we have created and another artificial term we have created. Really, it is just about services that you use within a certain set of protocols, which are really based on the Web anyway.
We are realizing that what was taught or asked as SOA within the enterprise is actually something that we can do in the WOA Web. If we do it an environment where there are lots of different participants who all play very different rules, then you do need a lowest common denominator approach to put everything together.
That’s why the emphasis now is on doing things using REST rather than SOA, trying to keep it as simple as possible and as standards-based as possible, and exposing things in a simple way, rather than making it really complex.
Gardner: Now, Jim Kobielus, you’ve been known as a wordsmith. If we're using artificial designations with WOA and SOA, but we still want to recognize this lowest common denominator benefit to tie some of these up together, what typically we should call this lowest common denominator approach?
Kobielus: Before I answer that, let me just peel the onion. I agree with what Phil Wainewright just said, which is that we’ll see SOA underneath a WOA provider. That is crystal clear to me. It’s already happening in my core area, which is data warehousing. The delivery layer or the front-end presentation layer of most business intelligence (BI) or data warehousing environments is going to go WOA or REST or Web 2.0, however you look at it.
So the middle persistence layer, the primary interface there, is not so much SOA or WOA, but SQL for querying data in databases and in OLAP cubes, etc. Then, what I call the "ingest layer" that extracts data from the sources and brings them into the data warehouses has a bit of SOA, bit of ESB, bit of EAI, and EPL.
So, looking at the big picture here, the whole notion of this is simply that cloud services is a convergence term, or should be, because the cloud that all of these paradigms inhabit is a multi paradigm cloud and they are co-existing in various ways. It’s a semi-permeable membrane between these organisms that live in the same soup or the same cloud.
Gardner: Maybe a common factor here is that we are extending and deepening the value we extract from widely embraced standards.
We wouldn’t be able to extend the lowest common denominator, the cloud, or improved SOA conceptually across more assets, resources, and infrastructure in middleware, if we didn’t have some either de-facto or established standards.
Let’s go to you Joe McKendrick. How do you see this? Are we really talking about the result of a lot of standards work in the acceptance and need for standards over the past 20 years?
McKendrick: Exactly, Dana. There are a lot of complaints about what's happening with standards these days. As Tony pointed out, there are anywhere between 80 to 200 standards that are evolving, particularly in the SOA-Web services space, as we know it. But, looking back over a 20-year horizon, we see that things have come a long way. We have HTTP, for example, and the rise of the Web.
I'm going to borrow a bit from Dion Hinchcliffe. He calls the whole Web 2.0 cloud phenomenon "The Global SOA." We have the standards and services that could be built using these standards out in the cloud. That essentially will function as one humongous universal SOA. Bringing that down to WOA, you could look at SOA, as it’s enacted within organizations, as a WOA island, or an internal cloud.
I have heard the phrase "my cloud" applied to an internal instantiation. SOA essentially acts as internal cloud within organizations. I think that’s a good way to sell SOA. I know there has been a lot of difficulty selling the concept to the business, and you can explain to the business that SOA is actually cloud computing, a SaaS enacted within the organization. Your business units no longer have to worry about building their own services or their own interfaces. You have this secure cloud service that exists within the boundaries of your enterprise.
Gardner: Okay, so we have standards and, of course, the funny thing about standards is that some are more standard than others or more accepted than others. What I think I hear you saying is that there is this private cloud or SOA activity in an enterprise, and the standards by which that functions can be the choice of that organization or perhaps what they have been left with as a result of their legacy and on-going IT adoption over the years.
Then, there is this public cloud, WOA, or extended global SOA, which is based on those standards that are accepted by a larger group, perhaps from a social networking perspective, the anointed standards from the social technical graph. What do you think, Phil Wainewright, are we talking about sort of tiers of standards here?
Wainewright: Well, I was listening to what Joe said and it kind of crystallized in my mind. WOA is actually SOA that works, because, as you said, you can build a SOA in your own organization with your internally defined standards. I am thinking back to the fact that the SOA required standards so that two SOA implementations can work with each other.
These internal SOAs are actually nonsense, because they are totally internalized and they can't interact with the outside world. If you want to actually take advantage of all the resources that have been on the Web, if you want to interact with people in other organizations or with computer systems or database resources that other organizations are making available, you have to go to WOA.
That's the SOA that works. The reason it works is because it’s been implemented using standards that everyone actually understands and haven’t got the latitude to define for themselves.
Perhaps this is the moment when all those kind of people who have been building all these wonderful SOA infrastructures within their organizations -- for whatever it was they thought people were going to do at the end of the day -- are really going to meet their nemesis.
Gardner: Okay, so we have a set of SOA principles and standards that have a certain internal maybe even extranet type of a flavor, but in order for those islands to work well across other islands or to avail themselves of highly cost-efficient cloud service that are made available by such notables as Amazon, Google, Microsoft, IBM, eBay, EMC and Apple, you need to go to this higher common denominator, accepted level of standards.
Tony Baer, do you think we’re getting close to what’s the proper understanding of WOA/SOA and what should come next?
Baer: The way Phil was characterizing WOA as "SOA that works" and the way Joe characterized SOA as basically the internal cloud, kind of the rang bells rang here. It was like, "Aha! Yeah, that’s really what it’s about." It seems like what we are sailing into is these tiers of granularity.
If you are going out to the wider world, you go out to the wider world of the standards that have already been there for years, where we don’t need a learning curve. And, it makes sense, because the more sources you deal with, the lower your common denominator has to be. You need to basically widen the gate there. The way Joe and Phil put it really sums up how these are settling out. So, that makes a lot of sense.
Gardner: Alright, so perhaps from the user-centric, developer-centric, and even the disrupter-centric viewpoint, that being the cloud, the new cloud providers are happy to embrace these more open or common-denominator standards. On the other hand, there are vendors who are established that have incumbency and perhaps have business models to protect.
So, there could be some tension here between the SOA as an internal cloud and the WOA as the more external, more highly interoperable cloud. What do you make of that, Brad Shimmin? Are we are going to have some tension here between the incumbents and the user/developers/disrupters?
Shimmin: If IBM is any indicator of things to come, I would say no. It’s simply going to be the established firms taking advantage of the situation and partnering with or building up their own infrastructures for delivering RESTful-based Web-Service applications
Gardner: It doesn’t seem like they have too much of a choice, right?
Shimmin: Absolutely not, and if you look at companies like BEA -- Cape Clear was one of the first actually -- they’re in the application for SOA structure’s base. They are climbing over themselves to REST enable all of their APIs, strangely enough, starting with their governance tools and then moving to their more messaging-oriented software.
So they are REST enabling all the software, actively partnering with service providers to help them, and enabling ISVs to build apps that use their technologies. BEA and Progress Software have well-established ISV programs for customers to build out these SaaS apps.
Gardner: Alright, I think we're looking at a period of some disruption, particularly on the business-model side. So, if there is this great sucking sound that the Web as a platform is defining what is productive, what can be done cost effectively?
You can produce and put apps up on Amazon or Google or other alternatives. That’s kind of an offer you can’t refuse, if you are a startup or if you are an internal development organization within an enterprise and you have limited funds, but you want to accomplish something. These are very enticing opportunities to take the logic to the cloud, perhaps even do the tooling and development in the cloud, produce something, and then pay for that as it produces revenue or is in demand.
So, given the disruption on the business model side – again, good news for developers and users and disrupters -- isn’t there a risk if this happens too quickly for folks like IBM, TIBCO, and perhaps SAP? What do you think about that Phil?
Wainewright: One of the things it’s going to expose is that the WOA world is still in some early days and that there are quite a lot that the providers have got to get it right in terms of a service level commitments and in terms of what they are billing for their services, how they are establishing the robustness or reliability of a data feed, and of course, the security stuff.
Before these providers become highly competitive for the established enterprise vendors, there is some work that has to be done. But having said that, if you look at the more established players like Intuit, QuickBase, and salesforce.com and as well as the attractions for doing stuff on Amazon EC2, a fair bit of enterprise use is already being made of these capabilities.
Gardner: So perhaps the period of some mutual harmony with the older providers continuing to provide services value, perhaps maintenance and ongoing technical support for the SOA cloud as Joe referred to it, but also a new opportunity and competition in the higher level cloud. Let’s go back to Tony Baer, what are we missing in all this? Is there something that needs to happen in order for harmony between the WOA providers and the SOA providers?
Baer: I think Phil was hinting at that. I was just thinking about which part of what was supposed to be the appeal. Part of the problem of the Web services stack is that it tries to be very ambitious in terms of what it has tried to accomplish within that technology stack. Not only did it provide a service request to providers, or conversation infrastructure, but also tried to internalize all the types of security, reliability, transactionality, that traditionally were internal to application or database silos.
The need for those services and those guarantees of robustness doesn't go away, but the question is, where do you implement them? It’s one thing to request a transaction that's not humongously mission critical. But, at some point, you're going to need to ensure that the requester is authenticated and is authorized. If you were going to make this a business, you have to ensure that you maintain service levels. This is very data- transaction focused. You need those transaction guarantees, guarantees of roll back, etc.
I still haven’t figured out the answers to this yet, but my sense is that, if we are going to try and do this and do this on top of a lowest common denominator stack, you can't expect to internalize that within that lowest common denominator stack. You have to apply this externally.
A harbinger of that kind of approach is in some of these new enterprise mashup sandboxes that folks like IBM and Serena and a whole bunch of others are now trying to set up. We recognize that within the sandbox we will make it easy for you to do what you want to do, but we will put external controls to make it safe for enterprise consumption.
I don't have the answers to how this is going to happen, but controls over service levels, security and all that sort of thing will have to be externalized to the WOA stack, if you want to call it a stack.
Gardner: So, clearly there's a set of issues that needs to be thought through and those are thorny around transactional activities or mission criticality, absolute delivery, and guaranteed delivery. Performance levels need to be maintained and there will be compliance and regulatory impacts in that space as well. So let’s talk about data.
Let’s go back to Jim Kobielus. On the issue of data, when it comes to the lowest common denominator or cloud based, isn't there an opportunity for data to become a little bit more inclusive of WOA. Can we exploit the benefits of the cloud, either services or the repository in the cloud and virtualized data repositories, before we have to deal with the thorny transactional set.
Kobielus: Right. In the discussion that we had on SOA versus WOA, I've seen everybody tune into the issue. Offering transactional applications is the primary focus of much of what's going on. In terms of analytical applications, on the analytical data sets and where they are hosted and so forth in the cloud, that’s a big virgin territory that’s beginning to be opened up by, among others, Microsoft.
I was just on the phone with Microsoft yesterday about their SQL server data services, basically database in the cloud offering, which is in limited beta. They plan to go production in 2009. They were keying into an issue that I heard Tony talk about a moment ago that, as you externalize more of these sources into the cloud in an SaaS environment, the controls, whether internal to the cloud or external, are critically important.
Right now, SQL server data service is just a subset of the premises-based SQL server 2005 functionality. Microsoft recognizes that, as they bring it along to more production, they are going to need to build in the 24/7 service level guarantees and all of the security and other mission critical features that customers have come to demand and the premises based version of that particular database.
So, as you go out into the cloud then, that’s a huge open issue. First and foremost is what I call DW2.0, light-weight data warehousing. Microsoft is not the only one in the space. There is Zoho and a few others. It's very light weight, not really mission- or enterprise-grade data warehousing capability, hosting structured data sets in the cloud and then making them available for analytics such as reporting and dashboard. You can wait for this to play out, before these cloud-based data warehouses achieve some degree of functional parity and robustness, comparable to the premises-based offerings that enterprises everywhere have already implemented.
Gardner: Right, but part of the rationale for embracing the Web-tier, cloud-tier of interoperability is, because you can play across ecologies, be inclusive of more partners, allow for SOAs and applications sets within organizations to be more interruptible, then it’s not just going to be analytics. Why not put data in the cloud, because you want to share certain data on a privileged basis with other people and create layers of metadata that can then make for highly productive business processes.
Kobielus: Exactly. Microsoft is positioning SQL Server Data Services (SSDS) supposedly for B2B integration scenarios and also for the mid-market, but is very much focused primarily right now on transactional applications, database applications and so forth.
Microsoft has very much bought into the whole data services vision. They have a very strong one going forward. With WOA, they're at the front and center of it. When I say "front and center," it's in that delivery, access, presentation, sharing, and synchronization layer, leveraging things like Live Mesh and so forth, going forward in their road map.
So, WOA is very big on the front end. On the back end of SSDS, they are very keen and hot on SOA, and everything SOA implies. But, they're not really keen on exposing all of that SOA natively to their target customer, which is a mid-market or a small company that doesn’t have the technical resources or the skills to do programming in a real fixed SOA stack. They prefer to virtualizes all of that stuff and have WOA be that simple front end.
Gardner: Now, when you’re talk about standards in Microsoft, we have to look also at tradition, with Microsoft wanting to establish its own standards, ones that continue its strength and extend its strength into other areas. I think we've seen another example of that most recently with Live Mesh, in that it’s got interoperability across devices, two way communication using RSS and Atom, and other technologies that we would consider WOA technologies. But again, to a subset of the overall device environment or the software and standards environment.
So, let’s go to Joe McKendrick. Do you think that, as Microsoft moves into the cloud, it’s going to fully embrace the lowest common denominator, or perhaps attempt to take its platform approach and extend it into the Web?
McKendrick: Well, you can definitely see Microsoft moving in that direction. Jim made some excellent observations about what's going on in the SQL server space. Microsoft is in a difficult position here, because most of its revenues come off of the traditional, onsite, resident software stack, Windows, the Window server and Window’s client, the Office Suite, the SQL server onsite. If you look at its revenue pictures, billions and billions come out of that stack.
So Microsoft has to be out there, talking about changing the paradigm of computing, which runs against its revenue stream.
Gardner: Alright, I agree with you 100 percent. Let’s put that in the context of its pursuit of Yahoo. Microsoft is seeking to buy Yahoo for approximately $40 billion and Yahoo doesn’t want them to.
Brad Shimmin, if you recall when this was announced on February 1, people were scratching their head and saying, "What, is Microsoft crazy? What are they doing?" I think that over the last couple of months, it started to make more sense. Do you think that the Yahoo component can help Microsoft bridge this crosscurrent, as Joe described it?
Shimmin: I do, and it’s interesting, isn't it. When that was first announced, I think most people thought this was an advertising play and a play for eyeballs, but it seems after looking at releases like Live Mesh that it’s really more about the connectivity services that already exist within Yahoo. They have a broad audience that Microsoft would like to capitalize on, because, when you look at the numbers between MSN and Yahoo, it’s a staggering difference, both in terms of the people who use those services and the number of services available.
For example, the Yahoo mashup server or mashup tool they have is one of those things that Microsoft could easily pull into Live Mesh and make a part of that. Live Mesh, in a way, is a response to some of that. Steve Ballmer, a week or so ago, said something like, "The desktop doesn't matter anymore. It’s the network that matters." This harkens back to something Sun Microsystems said some 20-odd years ago.
Gardner: And, what about Ken Olsen, he said that the PC was a toy, and he had been ridiculed for it, but we are beginning to come back to that, aren’t we?
Shimmin: Exactly. It has come a full circle. Microsoft is running here and running back to the past, if you will, but, as we were just talking about, they have a significant investment that they need to protect. When I look at Live Mesh, I see that as a protection of that system of the desktop and the applications themselves. It is really what Apple has been doing for the last three or four years with OS X, with their Sync Technology, just expanding it a little bit, and dropping some Atom and RSS on top of it.
Gardner: Kind of Hailstorm, Chapter Two?
Shimmin: Right. When you look at what they have been doing with their Office applications, in terms of enabling those to utilize the web, they have been extremely slow in doing so, and are just now sort of picking up where the companies like Zoho have gone light years beyond.
Gardner: You hit upon an interesting issue, Brad, discussing the fact that the cloud compute value isn't just in low-cost per compute tick or for storage per hour, but that there is also this notion of an audience, and the metadata associated with that audience. All those end-users can be provisioned, perhaps quite powerfully and at massive scale, both scaling up and down in terms of the massive size of the possible audience, but the granularity of the service provision to them is another value that Microsoft perhaps sees in Yahoo.
Let’s go to Phil Wainewright with this. Are we talking about cloud computing, not so much functionally, but as a way of bringing together applications, companies, services and the end-users?
Wainewright: I think there is a social dimension to cloud computing, because there is a social dimension to the Web. Looking at if from a WOA perspective -- I do hate these acronyms, especially when we start to turn them into words, but anyway, let’s go with that.
We looked at if from a WOA perspective and what you are actually doing is looking at it also from a social and a user perspective. SOA always tended to be about linking our systems together, and once we’ve done that, it was then what do users actually want, and the business case was often quite a long way in the thinking.
So, cloud computing is good because you have to put the service out there. You have to think about where the people are going to use it. The problem I have with a lot of the kind of Web 2.0 space is that getting eyeballs is the name of the game, and people aren’t really thinking about what the commercial proposition is and in what way are you actually delivering value and making revenue.
That’s why I'm a little skeptical about how much value there is for Microsoft in the Yahoo acquisition, because I hear Steve Ballmer and other Microsoft leaders talking about advertising as a major fund revenue stream.
The amount of money that is available in advertising is virtually nothing compared to the amount of money that is available in transactions as a whole, if you are providing value to businesses. I think there is a great more revenue potential there than simply enabling businesses to get close to the consumers.
Gardner: Okay. You put your finger on something here. It's not just the advertising revenue, but the potential transactional revenue by linking up these constituencies, providing the scale up and down, and giving the developers the opportunity to originally create applications to feed this kind of cycle. If somebody has taken a big portion of the transaction across these activities, that’s a much more sizable market, than the advertising market.
Gardner: Anybody want to react to that?
Baer: I definitely agree that transactions are where the money is, but I think that we need to be careful not to fall into the trap of these B2B exchanges of about nine or ten years ago, when we thought that that was going to be the future of commerce. Instead, it was basically trying to institute a practice that was going against 20 years of supply-chain management and partner management trends. I think we need to watch out there to avoid getting ahead of ourselves with the hype.
Gardner: You've also put your finger on something. What will be the future of commerce in the WOA-SOA linked world, where internal business networks and resources and assets can, at a highly automated level, with full scaling, security and reliability, start interacting with the cloud and therefore, with the end-users. It's really an automation of commerce. What's going to come next? Any idea?
Kobielus: I agree with everybody that Microsoft needs to pursue Yahoo just to keep on building up that audience, because obviously it's an eyeball decision in the whole Web 2.0, eCommerce arena.
Gardner: And that’s because they missed the boat on search, right?
Kobielus: Right. If you look at it, and I agree with what everybody said, transactions are the money to be made from connecting those eyeballs/wallets to transactions. It's where the Web 2.0 money will primarily be made.
In a sense, tracking eyeballs is instrumental to both connecting those wallets to transaction, but also connecting those eyeballs and the brains behind them to the intelligence and the analytics that are out there, selling that service as well. Microsoft is providing not only business intelligence, but market intelligence, consumer intelligence and so forth into the cloud.
McKendrick: Let me add to that. It's going to be changing the nature of organizations internally as well, not only on a B2B basis. The dot-coms that you saw arise in the 1990s all had to buy their infrastructure. They needed to buy Sun servers and everything else to support their operations. Now startups especially can just tap into the infrastructure and services that are available across the cloud and offer up these services to their consumers.
I’ll leave with an example. If you look at the Amazon Web services site, look at some of their case studies. There is a company -- a podcast service company, as a matter of fact -- Online Podcast Service, that was able to start up with a full-fledged infrastructure that cost a total of $82 for the first two months for storage, processing, messaging, everything they needed.
Gardner: I agree. There is the whole middle layer of the applications and services right before an explosion -- sort of what we are seeing on our trees and in our lawns these days in April -- that can create a very fertile environment. But, that environment exists within the confines of someone’s cloud. That cloud can interoperate significantly, but the metadata that ties the constituencies together can be manifested across these relationships at a price.
McKendrick: Dana, you just sent a shiver up my backbone here, because what I see in my lawn are tons of mushrooms. So, when I put mushrooms in clouds in the same sentence, I have a shiver running down my spine.
Gardner: Maybe the English language isn’t sufficient to keep up with the technology concept?
Shimmin: I am disposed to use WOA as a word, I guess. I've seen two examples in the last couples of days that speak to what seems to be a growing future for this sort of commerce that you are talking about. I don’t know if you got to see this, but Sun’s Solaris On Demand program that they launched a couple days ago, is really about enabling ISVs to make their applications and to host them on either Sun’s network or on Sun’s partner’s networks. In either case, Sun takes a cut from both the partner and the ISV for being the middleman -- the provider of some technology and some supported services for those other datacenters.
Gardner: We're going to have to wrap this up pretty quickly now, but we haven’t discussed the whole mobile tier, and the fact that many more consumers entering their metadata continuously about what their wants, needs, desires and what they are willing to pay money for, will come through a mobile device, not necessarily a PC or even a browser. This offers yet a much larger global audience potential for what these clouds can pull off. Anybody wanted to discuss very quickly, the mobile edge impact on this before we close up for the day?
Wainewright: I’ve made a couple of observations,. The mobile Web is not going to exist as a separate thing. It’s just going to be the Web as we experience it on PCs.
Gardner: Right.
Wainewright: So, that's was interesting for two reasons. Yes, the way it is going to be available on mobile devices. We are going hook into a mobile, but it’s going to look much more like the Web that we are already used to rather than some kind of completely separate thing.
Gardner: Excellent.
Kobielus: A lot like a Live Mesh.
Wainewright: Indeed, and I think that the genius of Live Mesh is that Microsoft has really created in Live Mesh a bridge that enables it to take the cloud rather than being something that’s up there on the Web, but to bring it down and envelop the desktop as well, which then gives it a transition bridge to bring it’s own products into the cloud.
Gardner: But in doing so with a certain risk by not being inclusive of all the different permutations of how that could be done.
Wainewright: I think it's going to do more permutations. It’s has come right with the Microsoft-only implementation, because this is the first release. We will see how much effort it puts into making Mesh available on other platforms; that’s going to be a big test of how successful it will be in the long term.
Gardner: Well, thanks. We're going to have to close it out here. Tony Baer and I had a quick discussion at IBM Impact a couple of weeks ago about how the thought process is so much richer when you’ve got a group of bright and educated people like you all.
So I appreciate the group thing. I think we have been able to solidify and even move the needle a little bit on some of these concepts. I hope the readers and listeners appreciate that. So, I want to thank our panel. Once again we have had Joe McKendrick. Thanks, Joe.
McKendrick: Thanks, Dana. Glad to be here.
Gardner: Jim Kobielus. Thanks, Jim.
Kobielus: Oh, it’s been a pleasure once again.
Gardner: Tony Baer, I appreciate your input.
Baer: Nice to be back.
Gardner: Great to have you here, Brad Shimmin.
Shimmin: Thank you, Dana.
Gardner: Well, once again, welcome to Phil Wainewright, and we certainly hope you come back again.
Wainewright: Thanks very much, Dana. It’s been a pleasure being here.
Gardner: This is Dana Gardner, principal analyst at Interarbor Solutions. You have been listening to the latest BriefingsDirect Analyst Insights edition, Volume 28. Please come back and listen next time.
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Edited transcript of software services, cloud computing and related trends and analysis discussion. Copyright Interarbor Solutions, LLC, 2005-2008. All rights reserved.
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