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Analyst Corner

November 2007 Analyst’s Corner:
"SOA and SaaS"

by Julie Craig, Senior Analyst, EMA

What a difference a year makes. Last year at this time, Service Oriented Architecture (SOA) was still early state. A scant twelve months later, SOA has entered the mainstream and the question of SOA’s viability has largely been resolved. Certainly we still see articles in the trade press that “expose“ failed SOA projects, but the fact is, software projects of all sorts are risky and failure prone. Some estimates put the failure rate for in-house hosted enterprise software at over 50% of attempted deployments. SOA certainly doesn’t have an edge over on-premise Customer Relationship Management (CRM) and Enterprise Resource Planning (ERP) deployments in terms of project failures.

Software as a Service (SaaS) has come a long way in the past year as well. In November of 2006, SaaS was barely on the radar for most analysts. During 2007, SaaS has become a significant force in the marketplace, and EMA Advisory Notes have discussed the reasons why in some detail. These reasons include multi-tenancy, Open Source, and single-version products, but an additional differentiator not often discussed is that many, if not most, SaaS platforms are built using SOA services.

Looking for an SOA success story? You only have to look as far Concur, Salesforce.com, Workday, and RightNow. SaaS companies like these are among the best advertisements for SOA. They are poster children for IT organizations that are mature, share a vision, and have deep technical expertise. Not surprisingly, these are the same traits that separate the “haves“ from the “have-nots“ in terms of organizations able to actually deliver on SOA’s promise.

SaaS vendors are also leading-edge in terms of the ways they are leveraging their SOA assets to open up their platforms to customers and partners. They are positioning beyond simply delivering an industry-specific application, such as the CRM functionality provided by Salesforce.com. They are also making the components of their applications available to the marketplace for use as elements in other applications.

EMA described SOA “services in the cloud“ a year ago, but expected they would take several years to materialize. However, multiple SaaS vendors are already opening up their platforms for integration into products developed by the marketplace at large.

Salesforce.com recently introduced force.com, a platform for “customizing and integrating CRM“ and for deploying new applications. Force.com is starting to look very much like “services in the cloud,“ where Salesforce.com’s components are available for integration into a host of other applications. The vendor’s AppExchange already hosts over 700 applications developed primarily by partners leveraging Salesforce.com’s tools and components to host and market innovative products.

OpSource has gone a different route, providing full-blown business applications that are integrated through the OpSource Services Bus. OpSource customers can leverage these applications in their own businesses, and offerings include analytics, billing, customer onboarding, credit card charging, and pricing.

SaaS and SOA are turning out to be very compatible partners. Separately, each can deliver significant customer value. Combined, however, they are opening up a wide range of possibilities for developing and delivering software assets. SaaS software is already tested and production-ready, and SaaS providers take care of hosting and administration. Such services can mitigate the effort and risks associated with enterprise software projects, and it is likely that this happy marriage will continue to strengthen throughout 2008.




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