By Martin Lamonica
Friday, April 02 2004 09:38 AM
URL: http://www.zdnetasia.com/news/software/0,39044164,39174166,00.htm

Rhonda Hocker started work as chief information officer of billion-dollar software maker BEA Systems three years ago with a rather dim view of high-priced applications packages.

Her former employer, a PC manufacturer, had spent millions of dollars on a set of applications for supply chain management, enterprise resource planning and sales force automation.

"We tried to integrate them," Hocker said, "but at the end of the day I ran my business--which was a multimillion-dollar business--using Excel spreadsheets."

Sadly, Hocker found many colleagues at other companies limped along using the same relatively primitive approach to pulling together data, even though well-integrated and accessible information is vital to understanding a company's health and operations.

Hocker's negative experiences focused her energies at BEA around one thing: making IT more responsive to business needs. She reformed IT processes to centralize purchasing and led an initiative to build a companywide technology infrastructure. She decided that redesigning BEA's systems around what's called a services-oriented architecture was essential to meeting her objectives.

Increasingly, corporations are coming to the same conclusion: A services-oriented architecture, or SOA, offers a promising design approach for making computing systems more flexible and cost-effective. As companies finally begin to spend on IT after three years of slashed budgets, more and more are choosing SOAs as a way to redesign their technology foundation and improve interoperability between disparate systems.

SOA is not a product per se, but rather a framework for constructing and interlinking a company's back-end systems with the goal of lowering cost and adding flexibility--creating a services-oriented architecture in a business similar to city planning. SOAs rely on central IT departments to offer shared infrastructure services, akin to traffic lights, utilities and road repairs in a municipality. SOAs address the workaday chores that corporate systems depend on, such as moving business data. A financial institution could, for example, move transaction information stored in its old mainframe to an Internet-based service that business partners could access.

SOA may sound like one more catch phrase in an industry with too many already, but the concept promises to greatly cut the cost of building and operating IT systems. SOAs are still used primarily by leading-edge customers, relatively sophisticated consumers of technology. However, if implemented successfully, SOAs could break the tradition of costly, underperforming IT projects and give businesses better tools for releasing new applications quickly.

"I can use tools at different levels of my SOA to actually implement technology much faster, meet business requirements more effectively and have a lower maintenance curve," said Michael McCoy, director of enterprise architecture at San Diego mortgage company Accredited Home Lenders. Before, he said, technology professionals at the company were distracted from solving business problems because they needed to worry about technical barriers to information sharing, such as different operating systems and languages.

Accredited Home Lenders uses BEA's WebLogic Platform along with SOA software from start-up Blue Titan to provide companywide services, including transforming data to a common XML format to communicate with business partners over the Internet. The system allows Accredited Home to write applications in either Microsoft's .Net environment or Java and still share information between them. Purchasing the application server and related software from BEA and operational tools from Blue Titan was about 25 percent to 30 percent cheaper than buying separate software for portal, workflow and integration uses, McCoy said.

To people using business applications on a desktop, conversion to an SOA should be completely transparent. But for software programmers, system architects and designers, the move represents a significant reworking of the corporate technology infrastructure, which often is a complex jumble of different systems.

Still, the SOA concept is hardly new. Analysts say it's really the culmination of decades of evolution in existing practices, notably object orientation, component-based software development and integration middleware. Businesses have been creating modular applications based on components for years, which has made developers more productive.

Web services underpinning
Experts say the central technological change giving new life to SOAs is the adoption of Web services, a set of XML protocols that dramatically simplifies the process of exchanging data between disparate systems. Like existing middleware systems, Web services-based server software provides the technical underpinnings, such as security and reliable communications, for corporate systems.

With Web services, applications are designed around sending documents formatted in XML, rather than wrapping information in complex programming code, as traditional middleware does. When business data stored in documents, such as a purchase order, is thus simplified, that allows the discussion to be moved from technical low-level building blocks to business services.

"The middleware stuff was incredible geeky," said Annrai O'Toole, CEO of Cape Clear Software, a Web services start-up. "For the first time, (with Web services) we can talk about business concepts that map to the technology."

Web services applications address an entire business workflow, such as all the steps involved in sending a purchase order to customers. By using XML documents and business processes as the central design elements, rather than arcane technical programming, business people can more easily tell internal developers what they need.

Another critical difference between SOA and existing middleware is the communications methods that Web services enable. Most integration software is designed to hard wire permanent connections between applications. But under SOA and Web services, companies connect applications only when required.

This concept of "loose coupling," in which applications automatically link to one another as needed, gives company data centers much more flexibility by allowing them to reuse integration code in different business processes. A developer could write a service to connect a supply chain to a sales application, and reuse that same integration service to feed data from the supply chain system to a Web portal application. With traditional middleware, each new connection would require significantly more coding, analysts said.

The growing interest in the revitalized SOA enabled by Web services has created a rush of interest from technology providers eager to cast themselves as "SOA providers." In reality, the latest products--essentially the latest generation of middleware and development tools--are still relatively immature. But marketing from large vendors is beginning to raise awareness, said Ron Schmelzer, an analyst at research company ZapThink.

"There's still a lot more make-up than substance (from vendors), but that doesn't matter," said Schmelzer, who reported seeing an uptick in interest in SOAs from potential customers. "(Corporate) developers are saying, 'Loosely coupled systems and standards-based computing--I like that idea...So it's got a lot of people thinking about it.'"

Since SOAs are the next generation, vendors with an installed base of middleware and tools are the incumbents in the battle to sell the new infrastructure software, analysts said. These include IBM, Sun Microsystems, Microsoft, BEA and Oracle. Gaining a foothold as a supplier for SOA software and tools is strategic to technology suppliers looking to sell a suite of big-ticket infrastructure software products. In practice, most customers invest either in Java-based tools and server software from companies such as IBM and Sun, or in Microsoft's Visual Studio tools and Windows.

Whoever becomes the preferred provider for SOA infrastructure software "has huge leverage within that customer," said Joanne Correia, an analyst at Gartner.

The next version of Windows, code-named Longhorn, will include connectivity software called Indigo, based entirely on Web services. BEA in May is launching a program called Project Sierra to encourage customers to use its Java tools and server software to build an SOA. IBM, too, has tools and a self-designated "Center of Excellence" dedicated to promoting SOAs and Web services.

But the shift to Web services has also created new opportunities for smaller companies, particularly those that sell integration software that can span multiple programming camps, including mainframes, Java and .Net, said Schmelzer. He cited Sonic Software, Systinet, Fiorano and Iona as relatively small players in SOA infrastructure software and tools. Forrester Research, in a recent report, said there are opportunities for dozens of smaller technology providers of niche products within a services-oriented architecture, spanning everything from XML security to business process management tools.

Gartner projects that the adoption of Web services and SOAs will greatly reduce the cost of releasing and customizing applications. Today, for every US$1 spent on a software license, it costs about US$5 to US$6 to implement the software. By 2008, Gartner says, advances in Web services will lower installation costs of software applications, which will be in the range of US$2 to US$2.50 for every US$1 spent on a license.

Business-to-business uses
Analysts expect Web services and SOA to be used increasingly in business-to-business situations. The modular system design of SOA and common communication standards will make sharing data across organizational lines and even outsourcing business processes easier.

Take business-to-business trading network E2Open, which has built its entire network on Web services and SOA. The company offers several business services, such as procurement and inventory forecasting, to its customers in the electronics manufacturing industry. Using Web services lets customers combine its business services in different ways to meet their needs, said Lorenzo Martinelli, executive vice president of E2Open.

"With a Web services-based platform, customers can mix and match capabilities from our network," said Martinelli. The company is in the process of integrating workflow automation tools, based on the Business Process Execution Language ( BPEL) specification, into its software infrastructure to allow companies to automate multistep business workflows, rather than simply exchange XML-formatted data, he said.

Businesses can already create Web services that can be reused by many other applications, such as a service to authenticate a person's identity while logging onto several systems. But some experts argue that to get the most out of Web services and SOAs, companies should thoroughly re-examine their business processes and look for the efficiencies a revamped infrastructure can bring.

"Within all the plethora of IT assets, there is a collection of business services. If you could truly identity them and represent them in a services-oriented architecture, then the effectiveness of the IT increases dramatically," said Kerrie Holly, an IBM engineer and chief technology officer of the company's Web services and SOA centers of excellence.

For all the promise, though, creating shared software services in a company is a significant shift. To promote reusable services across a business, companies need to shed the ingrained notion that one person or department "owns" a specific application or data source, cautioned Jason Bloomberg, an analyst at ZapThink. On top of cultural changes, technical architects and designers need to carefully consider how to structure their business as a set of discrete services, experts said.

"Usually the first SOA project brings a reasonable improvement in integration, but subsequent projects will realize a better return on investment as companies reuse services," Schmelzer said.

To jaded technology users, SOAs may seem like slapping a fresh label on existing products. But as more and more corporations launch services-oriented architectures, this latest incarnation of middleware, combined with smart design, may end up being more than simply old wine in a new bottle.