September 28th, 2005
A SOA future can't come soon enough for BEA and HP
If there’s any theme to this week’s BEA World conference in Santa Clara, CA, it has to be "Hurry up to SOA." BEA is once again racing IBM to the next prize in enterprise computing. Think of it as the runtime in the process cloud. SOA is a lot about abstracting computing information assets and resources and reusing existing logic to reconfigure those assets using new logic to accomplish new process efficiencies quickly and flexibly.
The key is the new logic. Who gets to create, define, and manage the new logic on composite applications, automated workflows, ad hoc process innovations, and extended corporate collaboration and communications? Both the IT infrastructure and applications vendors want to assume the position of providing the tools and "runtime" for the new process logic layer. It’s the next big "platform" for IT vendors to offer, and through which further monetize their R&D efforts and installed bases.
That’s well and good, but how fast will enterprises, telecommunications firms, hosting organizations, and business analysts-as-developers move to this vision? This is especially key for BEA because its current revenue machines — transaction processing, application servers, application integration, and portals — are under growing pressure, and will over time not produce the profits BEA needs. So it’s a race against the clock, and the market holds the key to the complex spring that drives the gears of time.
HP is also keenly aware of this SOA timing issue. But for quite different reasons. HP recognizes that the 80-20 rule (whereby 80% of an IT project is an install, and 20% is labor- and skills-intensive customization) shifts in a SOA environment to the 40-60 rule (whereby 40% of an SOA project is an install and 60% is labor- and skills-intensive customization).
This is good if you derive your revenues from professional services. Incidentally, for the buyers, they can accept the 40-60 rule because making the investments allows for higher degrees of automation and reuse, cuts future development time, and offers process agility, so that ultimately the total costs are well justified by the productivity gains. The trend is also good economically if coincident to the SOA shift CIOs can also modernize and rationalize the servers and assets under the SOA cloud, and thereby offer consolidation, virtualization, and utility computing benefits that also ultimately reduce costs while boosting total process efficiencies at the edge.
Indeed, HP was a prominent sponsor and partner at the BEA World conference. On Tuesday, HP’s Russ Daniels, vice president and CTO for software, delivered a presentation that highlighted HP’s "Next 3 Big Things" in computing: 1) Compliance, 2) Utility computing, and 3) SOA. For HP, which has software revenues of $1 billion annually from its OpenView and OpenCall franchises (who knew?), SOA and utility computing spells relief. We just have to get those customer sites to saddle up and ride alongside the SOA bandwagon.
So BEA plus HP equals IBM. You have to wonder when one or the other will propose and make this union a true marriage.
Dana Gardner is principal analyst of Interarbor Solutions. For disclosures on Dana's industry affiliations, click here or to view his full profile click here.
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