Midmarket CIOs Becoming Sold on Service-Oriented Architecture

SOA promises companies the ability to square business needs with internal information systems. And midmarket companies are incrementally buying into its benefits.

Stop us if you've heard this one: A new technology is revolutionizing the way midmarket companies connect, customize and update crucial business systems. It's dramatically lowering development and deployment costs and delivering new business functionality with impressive speed.

Better still, it's allowing IT organizations to spend their time solving business problems instead of struggling with implementation. And that helps resource-starved CIOs, their C-level counterparts and front-line managers work together to align IT with business processes.

Sounds like the same old song that vendors have been singing for 20 years, doesn't it? But this time, they actually might be in tune with reality. The technology in question is XML Web services, the building blocks of a service-oriented architecture (SOA). CIOs at leading midmarket companies say that SOA is succeeding where past approaches failed.

Big on promise and hot with hype, earlier integration approaches using JavaBeans, CORBA, COM and countless other technologies looked great on paper. But they proved too complex and costly in practice. In addition to a steep learning curve, adopters found they needed large programming teams, gobs of time and substantial technology investments just to deliver basic integration or new business services.

In contrast, CIOs are using SOA to rapidly cobble together systems or whip up new business functionality without the pain or expense of previous approaches.

"We're beginning to see brave midmarket CIOs going into the corner office and asking for serious money to build out the SOA they've planned," says Peter Kastner, vice president and IT research director at Aberdeen Group in Boston. "SOA is revolutionary to the extent that, with simple technology like Web services, organizations find they can glue together composites quickly and effectively, get them out to the line of business, and maintain them more easily. That's not business as usual."

Indeed, a recent Aberdeen study finds the overall adoption rate of SOA is robust, with 90% of survey respondents saying that by the end of 2006 they will have acquired some experience in SOA planning, design or programming.

Company size, however, often determines the degree of a company's experience with SOAs. While some 20% of enterprise organizations have more than a year's experience building SOA, only about 6% of midmarket companies do. That said, Aberdeen predicts that midmarket adoption rates will surge, with a quarter of midsized companies expected to start SOA planning this year.

And globally, investment in SOA is expected to ignite across all business sectors, with the worldwide market for SOA software and services pegged to hit $143 billion by 2008, according to a Gartner Inc. estimate. "Now is the time to keep a close watch on the early adopters, who in some cases have done it soup to nuts and can now say, 'This is what we learned' and start to transfer that knowledge to the rest of the industry," Kastner says.

One early adopter is Ken Harris, CIO and senior VP of Shaklee Corp., a $500-million, privately held marketer of health products in Pleasanton, Calif. "The aha moment for me was that the rubber actually met the road," Harris says. "I've been watching the industry promise these types of benefits for 25 years. With Web services and SOA, I finally got to see it work."

This was first published in January 2007

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