OSS Observer: Best Days are Ahead for SOA Market

Commercial success is catching up to the high expectations for the service oriented architecture according to a new report from OSS Observer. Over the next four years, the research firm projects the SOA market to enjoy a compound annual growth rate of 27 percent.

SOA platform providers such as BEA, HP, IBM, Microsoft, Oracle, SAP and Sun Microsystems, and providers of SOA enabling tools, such as AmberPoint, Borland, CA, IONA, Progress Software, Tibco and webMethods, will be looking at a $910 million market by 2012. It stands at just over $280 million today.

Some analysts, such as Dan Baker from Dittberner Associates, say SOA has struggled because of difficulties implementing it and that the market is turning to open source solutions such as JBOSS. Pat Kelly, partner and co-founder of OSS Observer, said SOA–related projects will get more ambitious and take on more of an enterprise-wide strategy.

“Service providers are all at different points along the SOA journey,” Kelly said. “Some are just looking because they still have a lot of manual processes and are fairly inefficient organizations who are not sharing information throughout the organization.”

This is where SOA can make its mark and distinguish itself from earlier forms of middleware and interfaces. SOA helps service providers extend automation and re-use customer data and order data across departments and business units.

SOA is being implemented to target specific business areas, target high-growth services and achieve enterprise-wide transformation. The report form OSS Observer looks at the way Global Crossing, Turkcell (a mobile operator in Turkey) and Oi in Brazil are implementing SOA in these three scenarios respectively.

Kelly said Internet companies such as Google and Skype threaten to marginalize existing services and are driving service providers to change business processes and workflows by adopting an SOA approach, which he describes as more of a design principle than a standard architecture. These are the external, competitive pressures influencing the market, but SOA adoption has internal benefits as well, such as reduced integration costs, risk mitigation and improved operating metrics.

“The fundamental problem they’re still trying to solve is around integration and lowering the cost of supporting the customer base you have,” Kelly said. “It’s about how to get the most out of your business logic and reuse that so instead of having a $10 million project, you can cut it to a $2 million to $3 million project.”