Should small and mid-sized businesses (SMBs) be looking at service oriented architecture (SOA)? IBM certainly thinks so.
| ||express delivery|
| print comment|
|If SOA can bridge the gap between business need and technology intent, then SMBs might just be interested: |
- SMBs look for proven solutions to business problems
- They want technology to deliver practical benefits
- Reusability of existing investments is critical
- SMB adoption of web services and SOA is very low
- Vendors must work with partners to offer appropriate solutions
Glossary terms: SOA, business process, integration, web services, portal, lookup tool
The vendor has recently started ramping up its efforts to reach this huge pool of potential clients with SOA offerings. But it will have to convince a skeptical audience that it can bridge the gap between users' business needs and the technical solutions that may aid them.
While awareness of SOA may be low to non-existent among the majority of small businesses, the business outcomes particularly those resulting from rapid integration and reusability are as critical to this sector as any other. As a result, while users may not be asking for SOAs by name, many may welcome SOA-based solutions if they deliver the right kinds of benefits.
But IT per se is rarely top of the strategic agenda in these kinds of businesses. They typically focus first and foremost on cashflow, sales pipelines and similar factors that can make the difference between success and bankruptcy. The last thing they need is to put themselves at the leading edge of technology adoption. Kevin Hooper, director of worldwide sales and business development for IBM Software Group, says that when SMB prospects approach IBM for a customer reference, they tend to be less interested in learning about IBM's top ten most advanced sites they're interested in the mainstream if more prosaic issues that the rest of the IBM reference base is addressing.
Organizations of this size are not looking for technology to deliver competitive edge so much as to solve a particular business problem and enable different ways of executing. In short, SMBs' main area of focus is their business pain point, while SOA is a deep-level technical architecture issue. So how can businesses be confident that the latter will really tackle the former?
The answer comes in part from ensuring that initial technology discussions are focused at a business process level, while the conversation about underlying architecture comes much further down the line. "Mostly folk are looking for a specific solution to a specific problem," says Jim Deters, managing partner at IBM systems integrator Ascendant Technology.
While the vast majority of Ascendant's business today is in portals at both large and smaller companies, Deters believes customers will be investing more in business integration and back-end integration going forward. He adds that reusability is critical to SMB customers that need to integrate their systems and make the most out of the IT investments they've already made. As a result, the company is building up its own internal SOA practice in anticipation of a significant uplift in customers looking for SOA-based consulting by the end of the year.
IBM's Hooper told Loosely Coupled that the main focus for IBM's SMB initiative is organizations with approximately 100 to 1000 employees. In principle at least, the market is certainly out there. Although there were some 5 million businesses employing less than 20 people in the US in 2002, according to US Census Bureau Statistics, there were a further 82,000 firms with 100-500 people on their payroll, and 16,845 more with over 500 employees. Similarly, according to the Department of Trade and Industry in the UK, there were 26,000 'medium-sized' companies at the start of 2003 employing 50 to 249 people.
But just how ready this market is to take advantage of web services and SOA remains to be seen, since the evidence so far is underwhelming. Last month, WebServices.Org completed a survey of 1000 organizations, showing that over a quarter of large companies with more than 10,000 employees had developed at least 20 web services but only four per cent of small companies could say the same. In absolute terms that's a surprisingly large figure for the low end of the market: from a market share perspective it indicates low take-up today, but huge scope for adoption in the future.
It's up to vendors, then, to show SMBs that their SOA offerings can bridge the gap between business need and IT infrastructure. To begin with, they must recognize that the SMB 'market' is really a highly-fragmented group of self-contained sectors, loosely categorized by subsets of vertical markets and geography. While each company expects to be treated as a unique entity with unique needs, in practical terms vendors need to pool expertise around common industry processes and characteristics if they're to enjoy economies of scale.
Building an ecosystem
No vendor can hope to cover that kind of base on their own and as a result, the larger software developers' success will depend in part on how quickly they can ramp up an effective third-party development and distribution community. IBM is trying to build an ecosystem of partners to help drive its SOA push, working with independent software vendors (ISVs) that use IBM technology as the platform for their specialist applications. Its efforts include initiatives around Solution Builder Express, an enablement tool that provides development starting points to help partners build applications in specific verticals such as banking and retail.
Late last month it also unveiled a new initiative through its PartnerWorld Industry Networks, providing free SOA marketing and technical resources aimed at partners, software vendors and systems integrators. Partners in the program include SOA specialists such as Amberpoint, Actional, Blue Titan, Infravio, SOA Software and Systinet, along with a broad range of application software vendors including Siebel and Lawson. Other partners include services firm Capgemini and network equipment vendor Cisco, which unveiled its Application Oriented Networking initiative in June.
A second challenge for vendors is that most businesses do not identify themselves as an 'SMB'. "Almost nobody in the world wants to be identified as small," says Hooper. "Within a local market or industry, some customers we work with have a huge presence in the area where they do business, so they have to be treated with respect." That may explain why IBM offers its complete range to SMBs, including its WebSphere integration technologies; Tivoli systems management platform; its information management products; the Rational software development suite and Lotus collaboration and workplace tools. That may seem like overkill but it does at least put the choice in the hands of the customer rather than the supplier.
More on this topic
Even in the traditionally conservative midmarket tier of business software ...
IBM overview of its SOA offerings.
Press release issued June 28th.