By Jon Brodkin SOA - se today. It cations software departm burning Orvice-ori even has across a , often w ents will questionAented architecture - is one of the most talked about and least understood topics in IT its own “Dummies” book. As an approach to building IT systems, SOA connects appli-network via a common communications protocol, allowing organizations to reuse old ith the help of Web services. Saugatuck Technology predicts that up to two-thirds of IT have a limited or full SOA production environment by next year. Here we examine six s IT organizations face when they choose SOA.
Ashok Kumar of Avis Budget Group says he is. Avis began
using SOA about two years ago in portions of the company
to open new channels with travel partners.“They can now
do direct business with us without having to go through
a middleman. So it’s saved them a couple bucks, saved us
a couple of bucks,” says Kumar, who is based in New Jersey and is
director of services architecture information technology.“The cost of
bringing on new partners is down to nothing now because of SOA.”
Avis Budget can now bring on a new partner in a day instead of a month, he says, because with SOA it is just a matter of configuring a service rather than making large application changes.“When we started that the cost of bringing on a new partner was anywhere from $40,000 to $50,000, now it’s down to $3,000 or $4,000,” he says.
Any company will face up-front costs associated with implementing SOA, but many IT experts say it can lower expenses in the long run. You can’t look at SOA in terms of short-term return on investment, says industry analyst Judith Hurwitz, lead author of Service Oriented Architecture for Dummies.
“It’s the type of technology that your real goal is reuse and the ability to loosely couple components together,” Hurwitz says.“You can’t look at this for short-term benefit because in fact the real gain happens when change happens.”
Traditional approaches to building software assume you start from scratch and develop something designed to solve a specific problem, Hurwitz notes. SOA allows businesses to be flexible and seamlessly react to major changes. A business might not see much benefit from SOA for months after deployment, but if it is suddenly involved in an acquisition“there’s a major change in their ability to cope with that change and react and then provide the software,” Hurwitz says.
A related question people ask is how much money do organiza-
tions spend on SOA, says Forrester senior analyst Larry Fulton.
“It’s a very difficult question to answer because, if five years ago I was going to build a new ERP system and today I’m going to build a new ERP system and I’m going to use SOA to do it, and I still spend $5 million on the project in software and what have you, is it really $5 million spent on SOA?” Fulton says.“It’s not. It’s $5 million spent on a business solution.”
There are two kinds of payback with SOA, says Mike West of Saugatuck Technology. The first comes when IT can reduce the amount of money it spends providing services. West believes SOA adoption is still in its early stages, and that perhaps only 10% to 15% of businesses are using SOA and doing it in such a way to save money.
An even smaller percentage of companies are using SOA in such a way that they are improving earnings, he says.
The world is full of projects that can be done quickly and cheaply and offer no long-term benefit, West notes. SOA is a radically different approach to building and managing systems that create a foundation for rapid change, he says.
“The real money gets saved or gets made when you have this flexible business foundation so your business can be more profitable on a top-line basis - not just IT savings being subtracted so the top line is smaller,” West says.
The eBay-owned PayPal might be one of those businesses. Matthew Mengerink, vice president of core technologies, says PayPal uses SOA to provide outside developers the tools they need to link online retailers to PayPal’s system for exchanging money among buyers and sellers. There are about 16 APIs that PayPal provides a community of 240,000 developers.
“We use it to allow others to build on top of PayPal,” he says.“We spend money to provide it but you make a lot. If you’re providing it for nuts and bolts, you have a lot more customers.”
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