SOA spending soars but benefits remain unclear

The number of companies investing in service-oriented architecture (SOA) has doubled over the past year in every part of the world.


The number of companies investing in service-oriented architecture (SOA) has doubled over the past year in every part of the world.

Typical annual spend has reached nearly £700,000, according to a new report from the analyst firm AMR Research that surveyed 405 companies in the US, Germany and China.

And SOA is used in a variety of industries 59% of retailers have actually used SOA in at least one project, as have 58% of distributors, 54% of telecoms, and 42% of financial services firms. Financial services spend the most on SOA; 63% spend more than $1 million, followed by retail with 30% spending at least $1 million.

However, AMR has found that many organisations do not have a clear idea of why they are investing in SOA and, as a result, potential benefits may be lost.

"Hundreds of millions of dollars will be invested pursuing these markets in 2008, much of it wasted," according to AMR analyst Ian Findley.

The AMR survey found, there are multiple reasons cited for deploying SOA within any organisation, which allows SOA to appear as a buzzword justification for unrelated individual priorities. "People more easily rally around a thing rather than five things," Findley said. That lack of a rallying purpose for SOA calls its momentum into question, he added.

AMR's survey shows the diversity of drivers for SOA investments. Some 16% do so to build IT skills in an important new technology area, 18% because they believe SOA is the best technology to meet requirements of an individual project, 17% do so to reduce IT costs through reuse, 22% use SOA to change systems faster, more cheaply, and with less risk, and 14% use SOA to modernise their system architecture.

But Findley is concerned that SOA may not get picked up much beyond the early adopters - mainly financial services, telecommunications, and government organisations.

These types of organisation are often put a premium on the value of architecture and thus more willing to pursue SOA for less-quantifiable benefits -- unless a coherent set of benefits is made clear. Retailers are also early adopters, though mainly as an integration mechanism, not as much for new initiatives, he noted.

"If we can crystallise the key benefits, other people may follow on," he said. Because SOA affects multiple parts of an organisation, Findley said that the specific benefits will be different for the CFO, CIO, software developer, and business unit managers. "There doesn't need to be one common benefit, but these individual benefits should be interlinked," he recommended.

Another danger seen from the SOA survey is that the main benefit that the vendors sell around SOA - code reuse - is not the real benefit that early SOA adopters have achieved.

For early adopters the most practical benefit has been increased agility, Findley said. "Agility" in this context means being able to deploy new projects faster based on having adopted SOA as the fundamental approach to IT, in turn letting the business reap benefits from its IT initiatives faster.

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