April 28, 2006
SOA Good For SMBs
Competitive pressures and business requirements have manufacturers rethinking IT architectures toward—and in some cases, making long overdue investments in business requirements, a research firm said Friday.
Service oriented architecture (SOA) creates the ability for small-and-midsize businesses (SMBs) that generate annual revenue of less than $1 billion to see higher returns on software investments by making it quicker and cheaper to deploy IT systems, according to AMR Research Inc.
SOA mean easy integration with existing products, external platforms and add-on functions. But for mid-market companies, where IT investments expect to last between 10 and 15 years, SOA lacks widespread adoption. Buyers aren't demanding software makers SAP AG and Oracle Corp. build SOA products, though many have begun plans to capture mid-market revenues with this strategy.
AMR Research suggests that SMBs look at SOA strategies. As these companies continue to consolidate, standardizing businesses on SOA will ease integration of two platforms and potentially lessening the disruptive costs of modifying or even replacing an existing architecture, the research firm said.
But many SMBs aren't convinced. "Companies going into SOA are trying to look beyond the hype in the marketplace, questioning the promises and value," said Chris Lynch, vice president of engineering at eProject Inc. "There is value to the mid market, which, for one, is lowing the cost of application integration through standards."
SMBs face the same manufacturing challenges as Fortune 1000 companies. AMR Research said these are complex manufacturing and supply chain compliance, proliferation of product variants, shorter lead times, increasing demand challenges, demand signals from multiple sources, and managing service-level agreements.
The benefits provide easy integration through standards, so the financial application can easily transmit information to the project management system, for example. The integration moves away from custom coding or proprietary APIs and toward modules or composite applications that hold business processes in blocks of code that are re-useable and moveable throughout the architecture.
Lynch estimates SMBs can cut deployment for one year IT projects in half, because SOA standards allow easy integrate with any language or platform. "No matter what happens in the messages being delivered from one SOA-based application to another, the standards support the ability to discover the changes and maintain support for less cost," he said. "The three big things companies want to accomplish with SOA are reusability, standards based and loose coupling of systems."
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