BriefingsDirect SOA Insights Analysts on IBM’s Telelogic Deal and Open Source ESBs

Edited transcript of weekly BriefingsDirect[TM] SOA Insights Edition podcast, recorded June 15, 2007.

Listen to the podcast here. If you'd like to learn more about BriefingsDirect B2B informational podcasts, or to become a sponsor of this or other B2B podcasts, contact Interarbor Solutions at 603-528-2435.

Dana Gardner: Hello, and welcome to the latest BriefingsDirect SOA Insights Edition, Vol. 20, a weekly discussion and dissection of Services Oriented Architecture (SOA) related news and events with a panel of industry analysts and guests. I’m your host and moderator, Dana Gardner, principal analyst at Interarbor Solutions.

Our panel this week consists of Jim Kobielus, principal analyst at Current Analysis. Welcome back, Jim.

Jim Kobielus: Thanks, Dana. Hi, everybody.

Gardner: We’re also joined by Todd Biske, he’s an enterprise architect with MomentumSI, an Austin, Texas consultancy. Thanks for joining, Todd.

Todd Biske: Thanks Dana.

Gardner: Joining our show for the first time is Brad Shimmin. Brad is also a principal analyst at Current Analysis. Welcome, Brad. Tell us a little bit about your area of coverage.

Brad Shimmin: Thanks for having me, Dana. I focus on application infrastructure and spend most of my time thinking about middleware and SOA.

Gardner: Terrific. That’s the right mix for our discussion. We’re here to discuss some news and events for the week of June 11^th, 2007. I attended the Rational Developer Conference in Orlando, Florida this week. It was a little bit warm down there, but a busy time nonetheless. There was lots going on within the Rational Brand Division, within the software group, and within IBM. I came away with some observations I'd like to share. Have we been joined by another guest?

Dave Linthicum: It’s Dave Linthicum.

Gardner: Thanks. Also joining us today, Dave Linthicum. He's the CEO of Linthicum Group. Good to have you, Dave.

As I was saying, we’re just getting into our topics, and we’re going to look at some of the IBM news this week that came out of the Rational Division. There was the intent to buy Telelogic, a Swedish firm that’s got a lot of product across requirements, tests, QA, architecture and modeling, as well as embedded and system development. So, we’ll talk a little bit about that.

We’ll look at some of the announcements out of the Rational Developer Conference, including the Jazz Community, an innovative commercial/open-source community approach to development. Also, one of the more interesting product announcements was Rational Asset Manager, essentially a design-time metadata repository that can be used in conjunction with an operational or run-time registry and repository for a lifecycle approach to services.

What’s more, we’ll go around the table and look at what research folks have been conducting this week. That might include a look at WS02, the IONA Artix announcement, and some announcements also from BEA.

So, let’s start with the Telelogic acquisition. Telelogic is a publicly held company in Sweden, and IBM had to jump through hoops in order to acquire this company. They also announced it at their developer conference, which to me was an indication that this timing was not entirely their choosing.

Why don’t we start with Jim Kobielus? IBM and embedded -- we haven't seen anything along those lines for a while. They jettisoned the Rational embedded drive before IBM had acquired Rational, but now they seem to have a new-found interest in embedded. That's increasingly focused on end-to-end development, recognizing that the entertainment and media sectors are going to be creating devices different from a personal computer. IBM doesn’t want to miss out on the opportunity to leverage its back-end systems vis-à-vis these new types of devices. Any thoughts, Jim?

Kobielus: Clearly, IBM over the last few years has made stronger moves into the appliance space and really helped to define it. Obviously, with the DataPower acquisition a few years ago and increasingly taking their data warehousing appliances -- I think they’ve already revamped that entire product family -- they can scale from very small, or relatively small, data warehouses to very large ones.

IBM is trying to fuse their chief software products and technologies with their hardware engineering expertise to develop products for various markets. Embedded operating systems, embedded application components, and so forth, are key to all that.

So, when I saw that they were acquiring Telelogic, it made perfect sense. IBM is very much bringing together the hardware and software worlds into appliances, both for the business and potentially for the consumer market.

Gardner: They mentioned synergies several times. Synergies would include the silicon. You know IBM is big with Power PC. They also have this new Cell family of customizable, modularized silicon designs. So, there’s an opportunity for them to go to the embedded market with an optimized silicon and platform approach. Of course, Rational is in the business of helping developers be productive across lifecycle and to manage development, not so much in the tools category itself.

I think they see a wide-open opportunity in embedded that is still a fairly wide-open, roll-your-own test, roll-your-own tools, even roll-your-own IDE or real-time operating system. So, I wonder if anyone else has some thoughts on the embedded angle on this?

Shimmin: Well, Dana, not so much about the embedded angle, sorry to say, but perhaps something that might transition us into talking about Rational. When I look at what IBM is doing here -- and this is pursuant to what Jim was just saying about their synergies between hardware and software -- I see IBM doing two things.

One is renewing the focus on software development on the design time and development time side of things. Then, I see them taking their expertise in hardware and putting the two together to build what a lot of the software companies or platform companies really wish they had in the space, and that is the ability to do two things: create well-performing software and actually have software that performs well in the production environment. They’re going to be pretty well positioned to take advantage of those two things.

Gardner: That’s interesting because that fires high-level observation I made between the Rational Conference and the Impact Conference around SOA innovation just several weeks earlier. That was that IBM is anticipating the change in the definition of applications and systems. It is really focused on trying to get very vertical in terms of expertise about businesses in verticals, align that with their systems, and then allow for some level of consulting that joins these, whether it’s their consulting or someone else’s.

They seem to be involved now more and more with getting very close to the application, almost to the point of being in a position to be dominant in terms of custom application development. Do you have any sense from your perspective, Brad, about the whole notion of the shift in the definition of applications and how to create them?

Shimmin: Absolutely, Dana. It’s funny. Both IBM and Oracle are the two companies leading the chart with what you just said there. They’re taking tentative baby steps, because this is a pretty daunting task they’ve undertaken. That is, as you said, dive deep into a given vertical and a given set of business processes within that vertical to provide literally out-of-the-box functionality. You’ve got your data models. You’ve got your actual BPEL processes. You’ve got everything that surrounds whatever it is you need to actually get some sort of process up and running within their environments.

Maybe five years ago or so, platform vendors really focused on the foundation infrastructure of what these applications run on. They’ve realized in maybe the last six months that the success that they’re going to enjoy is going to come from their ability to save their customers money from the exorbitant consulting and professional engagement fees that usually come hand-in-hand with rolling out software like this.

So, what they're doing is pretty cool, and I applaud them for it. As I was saying a second ago it’s a pretty long row to hoe and it’s going to take a lot of energy on Oracle’s and IBM’s part to actually fulfill this and to say, “Okay, we’re going to give you a set of business processes with all the data you need to set them up and get them running for your vertical.”

Gardner: I think they’ll try to come downstream to a certain level and then hope that there’s an ecology of other providers that are even more in the weeds of vertical by vertical that they can help support and become friendly with. Right?

Shimmin: I think IBM is actually leaning that way and they have a very strong ecosystem already in place.

Gardner: Hey, Todd Biske. Telelogic also has an enterprise architecture product. Have you evaluated that or been familiar with it at all?

Biske: I have not evaluated it myself. Momentum’s CEO, Jeff Schneider, said maybe we’ll see some more activity on that product. It’s interesting, because I’ve yet to run into an organization that’s really leveraging some of the EA-specific products that are out there. They still tend to do 90 percent of what they need to do in Visio, rather than some of the specialized tools in that area, but, as the discipline matures, we’re going to see a lot more of that.

I want to talk a little more about this notion of it bringing IBM closer to the application business that you first commented about in your blog. At least, that was the first time that that was brought to my attention.

I have a friend from college who has worked in the embedded space pretty much since we graduated, and he contacted me recently about applying SOA to some of the work that he was doing. It surprised me a little bit, because it’s not a space that I’ve had to deal with. I’ve typically been in big IT and big enterprises. It opened my eyes that their environment for developing is maturing as well. They are getting to higher levels of abstraction and taking advantage of the same types of programming models a typical enterprise developer is.

I thought they were going to be so focused on performance and real-time behavior of these systems, that they may not have a strong interest in some of the things that Web service standards and XML have to offer, because of the tradeoffs from a performance standpoint. He said, “No, we are looking at all of that.”

Now, with IBM making this acquisition of a company that’s dealt in the embedded space, it really shows that development is still development. IBM is now recognizing that it’s not all just about “build whatever you want.” We are getting more specialized, and maybe the right way to get into the applications market is to create specialized tools for particular vertical domains, rather than providing the applications themselves.

It’s definitely something to pay attention to, as we go along. They did it on the tool side; they did it on the software side with the Webify acquisition last year; and I would guess that we’ll continue to see more in this direction.

Gardner: I suppose if you get very specialized in managing the process of creating applications at that very fine level, then that’s as good as creating the applications themselves. Let’s go to Dave Linthicum. Any thoughts about the Telelogic acquisition?

Linthicum: What’s missing in the space is a holistic design tool around SOA. I looked at Telelogic at the EA Conference in New Orleans a couple of months ago. I was impressed with it, but it didn’t have a lot of the components it needed to drive an SOA. I think IBM saw the potential for providing not only a design tool, which they have with the Rational stuff that you mentioned -- basically development lifecycle -- but also a holistic architecture tool to deal with artifacts and requirements and all those sorts of things that Telelogic does, and they’re looking to connect the dots. If they do come out with a holistic SOA-oriented design tool built around their technology, they’re going to have a huge hammer to beat into the market.

Gardner: Interesting. Did you get a chance to take a look at this new Rational Asset Manager, and what did you think of that?

Linthicum: I did look at it from the online piece, and I think that it’s going to have value in this space as well. The folks at IBM are not dumb. They’re out in the back, trying to figure out how all this stuff is going to fit together. They want to have not only the mega-stack in terms of deploying technology and development technology, but the mega-stack in terms of the design time stuff, including holistic enterprise architecture, asset management, service management, and SOA governance.

So, it’s going to be very difficult not to see IBM in almost all the larger SOA implementations out there, once they have a critical mass of tools. They’re investing right now. They see this as a long term strategy and a way to gain revenue 10-15 years down the line. I think they’re making some smart moves. I would have acquired Telelogic as well, if I were IBM.

Gardner: It seems that $745 million isn’t heck of a lot, given what companies go for these days. It seems like they got a pretty good deal.

Linthicum: Oh, it’s a bargain. They did very well buying it, and they’re going to reap a lot of benefits from it. This is the right move from IBM and the investors are going to love that three or four years down the line.

Gardner: One of my takeaways was that Rational, as an entity and a functional component within IBM, is rising. It’s really bringing together some of the other brands, including Tivoli and the SOA and WebSphere activities. There’s also a role for Lotus with collaboration among and between developers. So, it’s interesting that Rational, which seemed like an odd man out a few years ago, is really becoming somewhat of a mortar between the IBM brands, and also gives them more interception points in these accounts. That is to say, they can work with OEMs, now that they’re in the embedded space. They can work with ISVs through Rational. It just gives them more traction points to pull other aspects of their value into play.

Kobielus: That’s exactly what I’ve seen too, Dana. Rational is becoming the crown jewel within IBM. In my area of focus, master data management (MDM), the Rational tool has become the primary master data modeling and domain modeling tool for all of IBM’s MDM products. I agree. It was probably their most important acquisition in the last 10 years.

Gardner: Just for an element of balance, there is significant product overlap between Telelogic and IBM Rational, particularly on requirements, gathering, and management. However, they took pains during their press conference and analyst discussions to say that there is product overlap. They’re bound by the laws in Sweden not to get too specific about what they plan to do, but they say that there is very little market overlap. Where IBM plays in requirements and where Telelogic plays in requirements are quite different. So, I’ll be curious to see how they do, let’s say, RequisitePro, a popular Rational tool, vis-à-vis the other aspects within Telelogic.

One last item in the IBM news. They announced this Jazz community, jazz.org, and it’s essentially an open environment, which people can join and help contribute to the development of Rational products. This is somewhat of a trial balloon with IBM saying, “Wow. Look, how successful Eclipse was as a governance environment and a community development force in the market. How can we take what was good about Eclipse, but apply it to commercial product development, not just open-source development?”

It strikes me that if the companies who partner with IBM that have a vested interest in how their products relate to the Rational products contribute and help define the Rational products, then the same model could be applied to other commercial aspects within IBM, and they could then perhaps even take the model to other products. Has anyone had a chance to look at Jazz? Do you think that this is a wacky idea, or do you think it will get traction?

Shimmin: I looked at it a little bit. This is not the first time this has been done, and it certainly won’t be the last. As you said, they saw the success of Eclipse and they saw that it was an environment that fostered innovation. As we all know, it’s very hard for large closed-source vendors to innovate quickly, while maintaining a customer base accustomed to once-a-year big upgrades, punctuated with little patch here and there.

I look at what IBM has done, as well as TIBCO, Sun, BEA, and Red Hat -- even though they’re not closed source -- and I see them using the tools that the open-source community fostered in order to collaborate over a large-scale network of developers, and they’re applying it, just as you said, to closed source. There are many benefits to that.

First and foremost is a quicker turnaround on bug fixes and getting to a GA. When you’re dealing with the traditional closed-source development cycle, you build your software, you send it out to maybe 10 trusted customers. They hammer on it a little, and you have your own internal people hammering on it, and that’s maybe a three month venture.

Using 10 customers, who have their own jobs to do and don’t give this a lot of shrift, sets you up for failure. That’s why we see so many post-release patches going out. What this is going to do, if it succeeds and can be applied to closed source, is let these large vendors get their code out quicker in a much more tip-top, enterprise-ready fashion.

Gardner: I suppose it also allows end users to have more of a say in what they’d like to see in the products that they buy or use -- how they evolve.

Shimmin: Absolutely. IBM is taking a tiered approach to it, and some of the others have too. As we were saying with these trusted customers and partners, partners in particular are going to play a big role in this, but they would get access to source code at deeper levels. Folks that maybe are smaller customers or just interested parties, who want to make this product go forward, will have more limited access, unlike a traditional open source. They’ll have more limited access to the details of the source code.

Gardner: As I thought about this, it seemed to me that there has been an enabler in the market that’s allowed this to take off more than it would have in the past. That’s because of companies like Black Duck and Palamida that are able to evaluate code very quickly and determine its origins. IBM seems to be a little bit more flexible about opening the code up for people to look at and use. They’re assured that if it were to go into some commercial production, they’d able to find out and put an end to it, or at least get it into their royalties and licensing business. Do you think we’re at the point now where we can manage code to such a level that this permeability around the use of code is much more open and free?

Shimmin: Should we be thanking Microsoft, Novell and SUSE for that a little bit?

Gardner: Well, bringing it to people’s attention that it’s not black and white. It’s grey, right?

Shimmin: Absolutely.

Gardner: Anybody else have thoughts on Jazz community development in a commercial production effort?

Biske: It’s an interesting idea. I wonder how different it is from some of the efforts already going on. Clearly, we have commercial efforts built on open-source products. The key question here involves open-source products that are not available for free. If developers are working on it and they can build it and use it, how is that model going to come together if they say, “No, you only have a license to run it in a development mode and nothing more than that?” Is that going to be followed or not? Are they going to bother to enforce it, or do they really know in the long run it’s going to take the same direction that Eclipse did.

IBM has a commercial version of Eclipse, but largely people just go with the free product, because they can still include all the plug-ins that they need to. If they need to buy add-ins to it, they’re okay with that. So, they can focus their attention on Eclipse and create a framework, and can plug-in commercial components as they need to.

The other risk that they take is that the community is just going to look at this and think they’re just looking for free work. trying to take advantage of developers who just love to code and could care less whether they’re getting paid for it or not.

Gardner: I guess it all comes down to incentives and motivations. It might propel people to “donate” to an open-source project, similar to the incentives and motivations that drive them to contribute to a proprietary closed commercial environment.

Shimmin: There are no selfless acts. Right, guys? When I scroll some message boards for these development efforts, I see people in enterprises saying, “I need access to this API because I need to extend the product to work with something I’ve built in-house.” I think that’s the kind of work that’s going to drive us forward.

[[[Speaker:]]] It’s the same phenomenon as the developers who are employed by a vendor like IBM. They quite often work excessive unpaid overtime, just because they’re committed to their jobs, their products, etc. In a sense, now you’re roping in the partner ecosystem as well. They’re putting in essentially unpaid overtime to help out the mother-ship vendor get its products debugged and developed.

Gardner: If I were an ISV in the Rational universe or ecology, and I had an opportunity to have a say in what their products did or didn’t do, or if I could contribute some minor hooks, that might greatly benefit my business, I might be very motivated to do that.

Okay, let’s move on to some other topics. WS02 announced ESB 1, which is largely based on the Apache Synapse ESB. I want to make a disclosure that WS02 is a client of mine, and we should consider that as I present comments. I wonder if anyone else took a look at this, and had some thoughts on, “Wow. Yet another ESB and yet another open-source support maintenance business model entrant in the SOA ecology?”

Shimmin: Dana, I talked to them briefly about this before they released it. Like you, I saw this as, “Oh, yes, here’s another one, and maybe Red Hat should worry.” But, I don’t think anyone else is going to worry, except maybe the pure play ESB vendors like Cape Clear.

They’re focusing on what everybody in this space is trying to focus on, performance. Everyone has realized that ESB is at its level of maturity. You need to really be focusing on availability, reliance, reliability -- the “ilities” -- of deployment. This is the third vendor in the last month -- this would include IONA, Cape Clear, and WS02 -- who has talked primarily about the performance of their ESB and their ability to parse through messaging in a very highly scalable manner.

Gardner: They also seem to feel that they’re coming from a pure Web services heritage, without trying to drag a legacy business model into the mix. Therefore, their ESB is more ecumenical. Does that make sense?

Shimmin: I got the same vibe from them too, but I feel as if every vendor with an ESB these days feels the same way. They realize that, as with databases, you’re going into a heterogeneous environment regardless, and most likely inter-departmental, inter-company you’re going to have multiple ESBs and different messaging platforms that need to interoperate.

Gardner: Let’s take that to Todd Biske. He’s an enterprise architect. On one hand, choice is good and on the other hand, choice is bad. Are you are getting too much choice when it comes to ESBs?

Biske: It doesn’t bother me. I’d rather see a lot more in the open-source space. They’ve got the freedom to keep it more focused on some of the target areas. In the case of WS02, they really are focused more on what I call the middle capabilities, rather than on service development and execution capabilities. You see a lot of the commercial ESBs going in the direction of giving you an orchestration platform and a composition platform. All of it is about building new services, and not about connecting existing consumers and existing service providers.

Some of these open-source ones are keeping it a little bit more constrained and targeted. Now, with the open-source model, if an enterprise needs to augment that for their particular needs it gives them the ability to do so. I’ve run into a few clients who are looking at some of these products and have a potential need to do that. The openness is a plus for them.

I don’t necessarily see it as too many ESBs out there. The market naturally will shake them out on its own. This is just the way these product spaces work. I don’t view it as an SOA bad thing.

Gardner: As a system integrator, you must feel pretty good about high quality open-source code coming around. Doesn’t that suit your business model pretty well?

Biske: Absolutely. At Momentum, we’re vendor neutral, and I know Dave talked in a recent podcast about the importance, when dealing with system integrators, of having one that is not closely tied to a particular partner, unless your company has already decided that you’re married to this particular vendor. Then, it makes sense.

If you’re looking for your pure systems integrator, you have got to select solutions that are in the best interests of the client, not the best interests of the consulting company or the partner ecosystem around this. Having open-source products gives us a lot more flexibility in meeting the needs of the clients.

Gardner: Dave Linthicum, do you want to weigh in on this?

Linthicum: I don’t put as much value as everybody else does into the open-source equation. In fact, my client base -- and it’s Global 2000 and government folks -- are indeed buying ESBs and other things based on the notion of having access to the source code. I just can’t imagine in my lifetime that they would ever want to become a product development vendor and would have the skill set to actually maintain a middleware product, having built a bunch of those in my lifetime. I’m a little skeptical about the ultimate value there. To me, open-source needs to have marketing value. I’m not sure it’s going to have a lot of technical value going forward.

My larger concern with the number of ESBs out there is that, in many instances, these have a tendency to be queuing systems with service interfaces on top of them. Therefore, they’re more information- or data- oriented than transaction-oriented. That has a tendency to limit some of the emerging patterns I’m seeing within SOA. People are looking basically to automate these high-end business transactional systems well beyond just data consumption and production.

Most of the ESBs don’t really address that. They basically become queuing systems with a nice interface on them. To Todd’s point, they do have orchestration layers and other development technology. Some of the higher ESBs out there definitely have that capability. That seems to be nice, but it still seems to be limited by the underlying infrastructure that they’re selling.

I’m concerned about the number of the ESBs in the market, and I’m concerned about the ability of those ESBs to deliver the ultimate value as the SOA we’re building becomes much more sophisticated.

Gardner: Any other thoughts on ESBs before we move to our next subject? Let’s go to Brad. He is the new guy on the block. Let’s pick on him a little bit. What did you write about this week, Brad, and share a little bit about your insights if you wouldn’t mind?

Shimmin: This week I looked at two things primarily. One was the release AmberPoint made regarding their SOA validation system and their SOA management system. They have two products and they just versioned them to 6. I found what they were talking about very interesting, because, as I was just saying a second ago, they too are focusing on performance.

What they’ve gotten at is their desire to be in a run-time environment, because, as you guys know, they are like the Switzerland of SOA run-time governance in our industry. They are focusing on being able to scale their platform, and they have a number of partnerships and potential partnerships with hardware manufacturers, going back to our earlier discussion about IBM and their DataPower acquisition.

They seem to have this idea of, “Well, we’re run-time governance only, and we have the capability to be design-time governance as well, but we’re not going to get into that space.” I found that interesting, because they’ve just announced this as a part of this pre-flight check that they do. This is similar to the type of the service that IONA launched with their Registry Repository, in which when you check your WSDL into the Registry Repository, it actually goes out, looks for dependencies, etc.

In the AmberPoint product, but a little bit more predominantly positioned, they actually go look at that WSDL as it relates to other processes across the entire application and looks for any interdependencies, broken relationships, and anything within the production environment that may cause a problem.

I think about companies like CA, HP, and IBM, who all really are trying to come at the same problem, but from the design and development side, and I think of AmberPoint coming at it from the run-time side. I feel like, “Well, why don’t you guys just get together? Let’s put these two notions together and make it so that we have a more coherent lifecycle management of our codes for SOA implementations that starts in design and ends in run-time.”

Gardner: What’s going to fill that middle role or the gap between these run-time and design-time capabilities, so that we get that feedback loop, perhaps even an automated approach to optimizing and assuring quality and reliability. Is that going to have to be wetware? Will people fix that problem, or can it be productized?

Shimmin: It’s a combination. When I talked to AmberPoint about that very question, Dana, we were talking about it with regards to this throttling technology they have, where they can look at PKIs and SOAs that have been defined inside the Registry Repository and tell the process to slow down on Thursday afternoons, for example, because I need these other process to take priority on that date and time.

I said to them, “Well, gosh, I know there are a lot of tools out there at designed/development time – a lot of BPM products for example -- let me establish these and stick them in a registry. You just pick those up automatically and start executing them.” They said, no, because the schema and the amount of data that comes from this is not really enough to do it.

Gardner: These are just different orbits, right?

Shimmin: Right.

Kobielus: One of the glues, of course, is a common registry and repository infrastructure between the design-time and the run-time environments, but just as important is the wetware, as you indicated, a common governance environment with roles and workflows. People who are doing the design and optimization of the Web services and the people who are administering the services in a run-time can be collaborating on a ongoing basis.

The common rules and policies of this common infrastructure, be it AmberPoint on the run time or tons of other vendors on the design time, they can all share. So, it’s a bit of the registry and it’s a bit of the governance human administrative workflow.

Biske: It’s interesting that you bring that up, Jim, because one of the things that I wanted to come back to was the Rational Asset Manager. It seems to be typical of IBM that in their SOA offerings they’ve got three of everything. If the registry repository is the key, and I agree with you that this is really the unifying component on some of these things that are dealing with policy on the metadata, they’ve got Rational Asset Manager, which is effectively a metadata repository, and then they’ve got WebSphere Registry Repository, which is another metadata repository.

I’ve had conversations with them going back a couple of years on this subject, asking “How are you going bridge those, and what’s Tivoli using on top of this as the common metadata storage for all this?”

Brad hit on the other point, in his conversation with AmberPoint, that it’s not the fact that you have a metadata repository out there, but it’s the information that’s going into it. Until there’s some standard level of policy domain languages that these tools can leverage, you’re going to still see people just building their own fiefdoms and saying, “Well, you’ve got to have either AmberPoint everywhere or HP everywhere -- or whatever your management system of choice is -- to be able to do some of these things, like throttling across systems, and some of the run-time policy enforcement. It does need to bridge all the way back into the development tools.” So, again, IBM’s in a great position, providing products in all of those spaces, but it’s going to be difficult to pull off.

Gardner: Thank you. Now, you brought up an interesting point, which is that they would love to be able to have that chokehold. So, obviously, vendors have some vested interest in their own business models of making this less heterogeneous than other aspects of the environment -- this ability to create the feedback loop, manage exceptions and change, and optimize for performance and design. What do you think about that, Dave Linthicum? Is that possible or is it too late for them to do that, given the general heterogeneity and nature of SOA?

Linthicum: It’s possible for the newer offering, but they will have some pushback, given the fact that every domain is extremely different. One challenge that people have, when they try to get out in the market with this kind of stuff, is that ultimately what they think they’re implementing is different than what’s actually being implemented. I see a huge chasm between the perceptions.

For example, I was at the Gartner event this week to do a talk on ROI, and I got a chance to wander around and talk to a number of the people who are pushing in the market, both customers and users. There’s a very different perception as to what vendors think the problems are and what the problems are that users are actually experiencing. There’s going to be a bit of a sobering [[[-- come to Jesus --]]] that’s going to happen over the next year or so, when these guys push out there.

Gardner: Where are the two camps in terms of the difference between what they think they’re changing?

Linthicum: In the user community, all the problem domains I’m seeing, definitely in my client base, are unique. There doesn’t seem to be any one set of solution patterns you can apply across the board. You see bits and pieces of a stack and how simplistic those problem domains are. The vendors don’t see that when they design SOA in general. They typically give you the same stack and the same problem description. I’m not seeing a consistent problem description out there to work with the client.

Gardner: Well, of course, you can understand the perspective of the vendors. In order for them to have a volume business and repeatability and automate, they’d like to be able to take one hammer for all nails.

Linthicum: You can’t do that, and that’s the problem people are running into right now. I saw the same thing back in the integration days, back in the AI days. We tried to take one problem domain, all the spaghetti code, and put it through a single hub. While that was applicable to a small percentage of the problem domains, it wasn’t widely applicable. It wasn’t applicable to all problem domains. SOA is even more complex than that. Vendors are going to find that they’re missing the boat in terms of understanding the needs of the people they’re trying to serve.

Gardner: Once again, we come up against these issue of technology and people, where people are much better at matching nails to specific hammers or types of hammers, so that technology can run with it once they’ve established the proper relationship. SOA again becomes very people intensive. You need to be in the weeds to understand the business, and specifically you need to understand the particular company.

Linthicum: Dana, it’s all about people. As I’m getting further along in this stuff and learning more about it, I find that the people issues are really the core of all this all. I can solve any problem with technology, and probably everybody in this space can do the same thing. However, getting people aligned with how that’s going to happen and setting them up for success is the ultimate challenge right now, and the vendors need to understand that.

Shimmin: Back to our example of AmberPoint. If I have a nice BPM tool that lets me find my PKIs and SOAs, and if it’s not in my best interest to include that additional data the additional artifacts that AmberPoint is going to need to make that throttling automatic, why am I going to do it? I won’t.

Gardner: This is interesting, because I hear two different things in the market as well. On one hand, there’s a recognition that you can’t get the labor you want. You can’t get it on the continent that you want it on. And, people are trying to find ways in which to reduce the number of people, because they’re costly and they’re hard to hold on to. Yet, what we’re hearing here today, and I agree with it, is that we’re actually entering a phase where more people, with more specific knowledge and talent, are going to be required, and they’re going to be required onsite, not necessarily doing this through instant messaging. Any thoughts on that?

Kobielus: That explains why I’m seeing more emphasis in the SOA space on pre-built domain models, essentially solutions that package up the rules, the best practices templates, the workflows, the policies, and so forth, for a particular problem domain, be it in the MDM space or be it in the ESB space. The customers are demanding these accelerators so they don’t need to hire people who are smart enough to build all that stuff from scratch. If the vendor and their partner ecosystem have already frozen all that expertise into the solution, the customer can be productive from day one. So, the customer could have a little bit longer to go find the appropriate smart people, wherever they happened to be, whether in Indonesia or Chicago.

Shimmin: That’s why you look at the Rational and Jazz announcements this week and you see the reality that IBM is seeing, which is that, although we want to have this deep knowledge that’s in-house, that’s not likely to happen. You need to go where the talent is. So, the software is hopefully bridging those gaps.

Back to what you were saying earlier, Dana, about even Lotus being able to play in this, I think what’s going to become a much more predominant paradigm is that sort of telepresence for the entire life cycle of software for all involved in that.

Gardner: Well, let’s just hope the human resources people don’t get too involved.

Biske: I have a little bit different take on this. I still feel that it’s not that we need better developers, but that the technologists need to become more business aware and more business savvy.

There are a lot of businesses that may be looking offshore for a lot of these efforts, strictly from a cost reduction effort, but that doesn’t necessarily mean they’re going to get any better technical solutions than they would have with resources in-house. It just may mean that they’re going to get it less expensively, and even that is debatable.

So, they haven’t really improved things from that standpoint. In terms of business agility, they’ve reduced their cost, but is the IT solutions actually helping the business any more than it did before when all the work was being done internally? The only thing that’s really going to help push it along is to get people who are both knowledgeable about the business, as well as knowledgeable about the technology, and being able to bring those two worlds together.

Shimmin: I don’t think BPEL is the only way to do that, but that seems like that’s all vendors are focusing on right now.

Gardner: I’m a little bit concerned about that. I had this conversation with Sandy Carter at IBM about how they’re looking for “T-ish people” who have horizontal business acumen and understanding and then a vertical stem around deep technology. I’m thinking to myself, these are fundamentally different kinds of thinking. You’ve got right-brain people; you’ve got left-brain people. Most people favor one or the other. There are not necessarily going to be very many who are very good at both.

Maybe we should be thinking about this as small pods or teams, where you’ve got a business person who is savvy, you’ve got a technologist who is savvy. And, then you’ve got a facilitator, a person who is very good at motivating and communicating, and create three-person pods to approach this, rather than think you’re going to get it in just one individual.

Kobielus:[[[???]]] Right, because these are all separate domains of complexity. You can be really astute on business issues, if you focus on that and you continue to refresh your understanding and the nuances of all of that day in and day out. Likewise, all the technology areas are themselves entirely stand-alone spheres of complexity. Imagine one person trying to juggle those different spheres of complexity all day, every day, and do a good job of it. That’s really hard from a wetware perspective.

Shimmin: Do you guys know the notion of extreme programming? The idea is to have these micro teams with two people who are always working on a given aspect of a project. Why not have one of them be the IT technologist and the other one be the business analyst?

Gardner: There’s an opportunity here for someone like a McKinsey to come in and start analyzing the organizational dynamics of approaching SOA, what sort of teams should be put together, and what sort of people should have certain skills. This whole notion of one person doing it seems to me as farfetched. These teams could be much more capable and much more distributed. You could push them into different activities within this problem set and they won’t necessarily have to be physically there.

Biske: Companies that have started to practice user-centered design and some formal usability practices are probably in a much better position. One thing you find in doing that is that you immediately have to get out of this customer-supplier relationship and into a team environment, as you describe, for developing solutions for business users. They’re part of the team. They’re not a customer.

Pointing to other potential groups, someone like Patricia Seybold Group, and their focus on customer innovation, some of those concepts really need to be brought in here to stop viewing IT as a supplier to the business and instead as a partner and working from a team standpoint.

You’re absolutely right that the T can be built by creating a team, rather than looking for one superstar individual that understands it all, because there aren’t too many of them.

Gardner: Well, I’m afraid we’re out of time, but I think we’ve stumbled into a topic that I’d like to pick up again in another show. That’s the organizational approach and the relationships between customers, supplier, integrator, and how they come together, or not, and what we need to do to come up with some new approaches around that. So, thank you everyone for joining. Once again, we’ve had Jim Kobielus, principal analyst at Current Analysis. Thank you, Jim.

Kobielus: My pleasure.

Gardner: Todd Biske, enterprise architect with MomentumSI. Please come back, Todd.

Biske: Thank you.

Gardner: Dave Linthicum, CEO of Linthicum group. Always good to have you, Dave.

Gardner: Also, a newcomer, who we hope he will become a regular, Brad Shimmin, also principal analyst at Current Analysis.

Shimmin: It’s been a pleasure everyone, thank you.

Gardner: This is Dana Gardner, principal analyst at InterArbor Solutions. You’ve been listening to BriefingsDirect SOA Insights Edition, Volume 20. Come back again next week. Thanks, everyone.

Listen to the podcast here.

Produced as a courtesy of Interarbor Solutions: analysis, consulting and rich new-media content production. If any of our listeners are interested in learning more about BriefingsDirect B2B informational podcasts or to become a sponsor of this or other B2B podcasts, please fill free to contact Interarbor Solutions at 603-528-2435.

Transcript of Dana Gardner’s BriefingsDirect SOA Insights Edition, Vol. 20. Copyright Interarbor Solutions, LLC, 2005-2007. All rights reserved.

BriefingsDirect SOA Insights Analysts on IBM’s SOA Strategy and Evolving Definitions of ‘Business Applications’

Edited transcript of weekly BriefingsDirect[TM] SOA Insights Edition podcast, recorded May 25, 2007.

Listen to the podcast here. If you'd like to learn more about BriefingsDirect B2B informational podcasts, or to become a sponsor of this or other B2B podcasts, contact Interarbor Solutions at 603-528-2435.

Dana Gardner: Hello, and welcome to the latest BriefingsDirect SOA Insights Edition, Vol. 19, a weekly discussion and dissection of Services Oriented Architecture (SOA) related news and events with a panel of industry analysts and guests. I’m your host and moderator, Dana Gardner, principal analyst at Interarbor Solutions.

Our panel this week consists of show regular, Joe McKendrick. Joe is a research consultant and columnist and blogger. Thanks for coming along Joe.

Joe McKendrick: Glad to be here, Dana. Thank you.

Gardner: Also with us again is Tony Baer, principal at OnStrategies and also a blogger and columnist. How are you doing, Tony?

Tony Baer: Not too bad, Dana.

Gardner: Again joining us too, Jim Kobielus, a principal analyst and blogger at Current Analysis. Welcome, Jim.

Jim Kobielus: Thanks, Dana. Hi, everybody.

Gardner: Also, on our panel this week, Dave Linthicum. He’s the CEO with the Linthicum Group and also a prolific blogger and podcaster. Welcome again, Dave.

Dave Linthicum: Thanks, Dana.

Gardner: Thanks for joining, everybody. We’re here to talk about a serious new topic that has gotten lot of additional news and events around it, and that is this whole notion of a "business application."

Now, we’ve been discussing SOA on this show for a long time. We’ve been looking at it from the position of technology, business, governance, but the elephant in the room is the idea of what a business application is going to be? We’ve had a long history of packaged business applications, mainframe applications that have been comprehensive across an entire business. Now, we’re looking at a mixture, a hybrid of highly customized enterprise application, packaged applications, and the increased compositing of services.

There were three announcements this week, the week of May 21, 2007. There was a series of announcements at the IBM Innovate Conference in Orlando, Florida, and I attended that as well as Tony. Hewlett-Packard (HP), also had sort of a coming-out party around SOA. Then, Salesforce.com also had an SOA announcement.

So, let’s look at these individually and try to come up with some analysis, some perspective, on what IBM is trying to accomplish vis-à-vis its compositing and its emphasis on business services around creating applications. It sure sounds like an applications business. And, lets look at what these other vendors are doing.

First, let’s go to Tony. You were at the IBM event. Give us a quick rundown of what you took away from the IBM announcements.

Baer: Essentially, they summarized some of the pieces that they have been putting together and became more vocal on some new pieces that they’re putting on top of that. It’s not been any secret that, for a while, IBM has been starting to verticalize SOA. I may get my order wrong with all this, but it’s a layered approach. It starts with some industry frameworks, which basically say these are things that companies in certain sectors do. It’s not quite decomposed down to process as yet, but it lays the groundwork for it.

Then, they have a component business model, which is how to model those activities in the process, but it hasn’t yet been put into anything that’s executable. Then, they have different parts, including what used to be known as Webify and what’s now known as WebSphere Business Services Fabric, putting together some content packs that include some of the actual business components, which are drawn from those models. In turn, Global Business Services (GBS), which was the old Price Waterhouse/PWC consulting arm that IBM acquired sometime back, is putting together more specific parts. I forget the exact term they used for it, but it sounded an awful lot like "applications," except, of course, they don’t really want to say the "A word."

Dana, you and I, were sitting through that presentation, where I really started to feel sorry for that GBS guy, because the whole room just laid on him. It raises a couple of questions. Number one, what’s an application anymore? Number two -- but I think more important because it’s not just a questions of semantics -- is: who is going to command the software dollars? Arguably, you could say that most companies with an ERP system -- outside of putting in version upgrades -- are not going to change the general ledger part of it, but rather the part that deals with actual B2B procurement with their business partners. That's where you start having activity at the edges. That’s where the action is. That could either happen to SAP NetWeaver, IBM’s various layered frameworks, or name the business process management vendor of your choice. That’s where the next battleground’s going to be.

Gardner: IBM, between its announcements around certification and helping to create more of a core in their labor force for SOA architecture, is saying, "We’re going to help create this workforce and we’re going to compete against the applications, but we’re going to do it in a different way. We’re going to change the game, rather than compete in the old game."

Of course, they had a few updates to the registry repository and a simulation game to help people learn about SOA. Fundamentally, I agree. This is really IBM saying, "We’re going to redefine applications and we’re going to compete with everybody." The new revenue growth is going to be at this vertical edge, where it’s a balance between customized apps that you build from scratch and packaged apps, but finding a middle ground. Jim Kobielus, you also had some takeaways from IBM this week. What did you find?

Kobielus: It’s not just IBM, but pretty much all their competitors at the high level of SOA in terms of the major platform vendors -- Oracle, Microsoft, SAP -- are just differentiating themselves in the SOA space through their abilities to provide industry business models, which, conveniently, "IBM" is the acronym for. They're able to provide deep-domain expertise that is packaged up into industry business models that they then deliver as part of an overall middleware-based solution portfolio. That’s really what applications are coming to.

They’re turning into vertical and horizontal, and in some cases diagonal, business models to address a broad variety of business processes or sector-specific requirements.

I didn't go to Innovate, but I was on the IBM Information-on-Demand Refresher Update call yesterday with the analyst community. SOA permeates the information-on-demand strategy through and through. Master Data Management (MDM) is one of my core areas at Current Analysis. I’ve written half-dozen solution assessments on MDM vendors, including IBM. What I’ve noticed is that the SOA-focused MDM vendors -- IBM, Oracle, SAS, DataFlux, TIBCO, and others -- are differentiating themselves based on the prepackaged domain models that they that they provide with their MDM solutions to target particular niches.

In their slides, IBM had a very good graphic called "MDM solutions." They’ve mapped out horizontally and vertically MDM solutions, vertically for banking, insurance, government, healthcare, etc., and then horizontally for customer care, risk and compliance, etc. Then, they had check marks to indicate their functional coverage of these various domain models.

That ties into the announcements from Innovate, which is that IBM is saying, "Here’s how we’re going to differentiate going forward. How we already differentiate is that we, with our global services, are a huge pool of deep-domain expertise that we are deploying out, providing, delivering to customers through these human beings, these professional services people. But, we are also going to package that expertise into these domain models, accelerators, frameworks, or business content templates that we deliver as part of the packaged solutions.

Oracle’s doing the same thing. A couple of weeks ago, they had a similar announcement about domain models that they’re delivering into various verticals and horizontals. SAP is doing likewise with the xApps and so forth. That’s really what it’s coming down to -- domain models and deep expertise.

Gardner: So, if it has a lot more to do with expertise, with feet on the street, with consultants and consultancies, let’s take a look at the HP announcements.

Tony, you also wanted to give us a little overview there. HP came out and said, "We’re going to be folding in more of the Mercury acquisition, the Systinet acquisition. We’re going to embrace this notion of Business Technology Optimization, BTO, as a go-to-market." They’ve also decided that they’re going to remain neutral. They want to be Switzerland. Of course, many of these vendors profess to be neutral, but I think HP has to be neutral, because it doesn’t have a lot of the SOA pieces. Isn’t that right, Tony?

Baer: Yeah, and if you and I had a penny for every time a vendor called themselves Switzerland, we probably would be too rich to be doing these calls on Friday mornings.

Gardner: We’ll have to have a Swiss bank account.

Baer: That whole neutral stance shows that HP is unique in not trying to verticalize its SOA. The announcement that made an impression on me was the Business Availability Center, which was the old Mercury piece. It will include some functionality from the OpenView side, which has been something most of the vendors in these systems and SOA runtime governance space have had a hard time dealing with up until now.

I wrote about this some time ago. It’s called the "blood-brain barrier." When you’re trying to manage a service level or a governance service level at run-time, part of it deals with what type of service. Are we giving this customer the current version, are we adhering to the policy? A key part of that is how this thing is going to rely on what happens physically in the data center, and these SOA governance pieces just have lacked that.

That was actually one of the things that I’ve been waiting for after HP announced it was acquiring Mercury -- or putting it out of its misery -- whichever way you want to interpret that. I need to drill down on this more and get some details of what exactly the piece was about. I haven’t had a real detailed briefing on it yet, but that was the part that really made an impression on me.

Gardner: HP is basically coming out and saying, "Here’s where we’re strong. We’ve got OpenView. We’ve got governance. We’ve got tools and registry and repository. So, we think that that’s fundamental and important. We’ve also got professional services. Our consulting and integration group, which is global, has vertical expertise, and also works diligently at these major consolidation trends, application modernization, ITO, shared services, and some other major trends and projects that cut total costs and improve agility."

What’s interesting, though, is that we’ve seen a combination of either larger integrated suites that provide the means to achieve SOA or we’ve seen individual parts, best-of-breed approach. We've seen people jumping up and down and saying, "Hey, we can do it better than anybody else, and we’re green fields, so we can move quickly, and we can be pure in terms of a services orientation."

The big question for HP now is, "How are you going to fill the middle? Are you going to be Switzerland, are you going to partner, are you going to acquire?" There's talk about BEA being out there as a possible target for acquisition, and this is at least the fourth year of that we’re in now. Then, there’s also the open-source side. There are a number of projects and providers that could, with HP’s assistance, really make open source and SOA a much more powerful activity.

Before we go further into this analysis, let’s just look over one last announcement this week. Todd Biske, did you just join the call a few minutes ago?

Todd Biske: Yes, I’m on.

Gardner: I would like to introduce Todd Biske. He is an enterprise architect at MomentumSI, an Austin, Texas consultancy. Welcome to the show, Todd.

Biske: Thanks, I apologize for being late.

Gardner: Not a problem, because the timing is perfect. You sent out an email to us this week with some thoughts about the Salesforce.com and SOA activities. Would you tell us a little bit about what Salesforce did, and why you thought it was interesting?

Biske: Salesforce.com announced what looked like a development platform for not just using their Web services, but consuming other Web services. I thought it was particularly interesting, because from an enterprise perspective you think of going to Salesforce.com for more of an outsourcing or software as a service standpoint. I’m a consumer of those applications. To think that they’re now opening themselves up as a development environment for their solution customers, made me raise an eyebrow and say, "Well, wasn’t I trying to get away from doing development by going with this solution?"

So, it had an interesting twist to what kind of a model the enterprise is moving to. Is there still always going to be a need to integrate and build custom solutions around these products, regardless of whether it’s a hosted environment like Salesforce.com or if it’s an off-the-shelf solution and I’m installing inside the firewall? Now, are we going to have to support both internal development environments as well as external development environments in order to get our solutions done?

Gardner: I suppose it’s a slippery slope. Once you become integrated with the internal components, assets, and resources, you’re going to have to get involved with tooling. There’s no way around it.

Linthicum: Absolutely. I was quoted in that release from Salesforce, and the strategy is a bit more sophisticated than that. What they’re trying to do is provide some of the patterns that we typically see in SOAs within the enterprise, which is to create solutions out of their own processes and processes that exist within the enterprise, and also provide a development environment to bind things together.

This is a bit more holistic. They have a virtual operating system out there supporting multi-tenancy. They have a database out there. They have an application design center, a testing center, and language that they’re supporting. They’re trying to provide not only applications, but, as complete as they can, a service-oriented stack on demand. As time goes on, knowing Salesforce, they’re just going to get better at that.

Gardner: So, would you call this "infrastructure as a service?"

Linthicum: It would be a complete platform-as-a-service inclusive of an SOA. In other words, instead of you maintaining hardware and software yourself, having to get servers, application servers, governance systems, and all that stuff, they’re trying to move to where you’re going to get a lot of this stuff through a subscription-based service. This means that a lot of people will have a much more cost-effective mechanism to get into SOA, which is a rich man’s game right now.

Gardner: I suppose this also requires integration of the service. One of the things that I had CEOs chirp on, when I sent out a couple of queries on this, was they'd like the idea of keeping the data themselves, but making CRM and these other business functions commoditized through a service provider. They seem to now sense they could get it both ways.

The reason I also brought up integration-as-a-service is that it sounds like what Grand Central was talking about a few years ago, and you’re familiar with that.

Linthicum: Absolutely, and not only Grand Central, but Bridgeworks and Hubspan and a few other folks. The difference is that you have the services and the processes, which are also bound in the same platform. Another difference is that people in the market are going to be more accepting of this technology right now than they were five years ago.

Gardner: So, I think we have three different announcements here, but there’s a common thread. As Tony mentioned earlier, the common thread is that the definition of a business application is up for grabs. Is it a professional service? Is it a custom development activity? Is it taking packaged applications, exposing them as services, and then compositing them with other, perhaps off-the-wire, services, and/or internal green field services -- or all of the above. Let’s take it to Joe McKendrick. How do you see this notion of a new definition of business application shaking out?

McKendrick: Tony provided an analysis on the OnStrategies site. He made an interesting point there that IBM is still trying to sort out who SOA should be sold to? Who in the organization will be ultimately responsible for SOA? Will it be the traditional IT development folks, architects, or will it be more of a focus on the business side?

Gartner, in one of its future-looking statements, stated that a lot of the traditional IT functions, or IT as we know it, will be moving into the business. Business units will be subsuming or taking on the task traditionally performed by a dedicated IT department, which implies that, as time goes on, you’re going to see IT more tightly integrated with units across the business. Therefore, that raises the question of, who is going to be doing the hard-core development, the heavy lifting, in terms of application development? A lot of the solutions that are coming to the fore are increasingly emphasizing automating the development process.

Gardner: Your point here is well taken, Joe. If you’re going to start changing the definition of a business application, then you also have to start changing the way in which people are involved with creating, modifying, and deploying, those applications and/or services as well.

That was another big theme we saw at the IBM Innovate event, this notion of a "T Person." They have across the top, on a horizontal basis, a strong business and domain expertise, particularly within a vertical industry, if possible. They also have the stem, the vertical part of the T, which is a strong understanding of technology, as a practitioner, a developer, or an architect.

One of the recurring themes was, "Where do you find these people?" If you go out to some of the job-listing sites and search under "SOA Architect" right now, you’ll find begging to be filled dozens, probably hundreds, of jobs that combine a domain and business expertise with a technical background. That's an indicator that something is shifting in the market.

Let’s go back to Jim Kobielus. Do you think that this a transformative and highly disruptive effect, this notion of changing the definition of an application, and having to change the way in which applications are created?

Kobielus: Oh, for sure. In fact, as you were speaking, I was thinking that what these announcements this past week illustrate is the changing definition of what an application is. One way that we might define an application now is an SOA platform plus domain content. So, the differentiators are not only the maturity of your SOA platform -- be it IBM's, Oracle's, or Salesforce.com's -- but also the breadth, depth, and extent of the domain content available to plug in to that platform and address specific business requirements.

Where does the domain expertise come from? Well, it can come from your own -- you the vendor -- your own global business services or professional services team. It can come from your partner ecosystem. You might have hundreds and thousands of partners in various niches.

In the case of Salesforce.com, it can come from your marketplace of thousands upon thousands of companies that are hosting this content in your own environment. It can come from an open-source community for an open-source platform like Red Hat, and so forth.

These are all hugely disruptive. The thing is, the traditional notion of an application is a very monolithic stack, a platform-plus-content, shrink-wrapped, delivered, and boom, that’s it. It's not really fully extensible with third-party content. Now, the whole notion of third-party content comes to the fore. A platform is only as good as the breadth of the ecosystem, community, or marketplace that can deliver new fresh business content, data definitions, rules, etc.

Gardner: What’s interesting from IBM’s perspective is they have strengths in just about all these areas, and this is really their game to lose. While SOA right now might be a rich person’s game, that suits IBM just fine. They want the big accounts. What we were hearing, Tony and I, in this meeting was that the more instances where IBM can go into a vertical domain-oriented account, the more they learn from that experience that they can push back out as componentized services, which they then take to the next engagement.

What happens is that there's a sort of race now. IBM has basically drawn a line and said, "We’re now in a race. Whoever can get to the combination of infrastructure and customization and professional services with a domain accent first, wins." In a sense, they’re competing against the IT departments, as well, because in these large enterprises, these IT departments take 12 to 16 months to put together a full set of new business processes. IBM can walk in and say, "We can reuse a king pin. We can do it in half the time." What’s the company going to do? The company is going to start favoring the IBM approach over its internal IT approach, which is what Salesforce is offering as well.

Kobielus: The game now is expertise-on-demand. Who could provide that expertise to bear down on a business problem right away? I mean, which vendor.

Gardner: And who can take advantage of past experience, breadth, and the coordination of different projects? That’s what this IBM Jazz thing is about, by the way. This Rational Development Conference announcement that’s coming out in June is a way of coordinating all of these different projects in such a way that reuse becomes possible. I think IBM is doing this largely for its own internal purposes, as well as a community basis. It’s a combination of business expertise, but also the ability to do things fast through reuse, which is what SOA is all about.

Biske: Dana, you were at the conferences. I’d love to get a sense of how many of the customers at the conference were strong IBM customers, Big Blue shops with mainframes, eSeries, iSeries?

Gardner: These were clearly dyed-in-the-blue kinds of folks, but the rate at which they’re moving and their interest in SOA is the issue.

Biske: Also, IBM has a stake in moving these customers forward. It has this installed base, very much a legacy base, and there are some arguments out there about how well services created from legacy applications can be reused. Ronan Bradley, with Lustratus Research, has argued in the past that services generated from Cobol-based applications, zSeries for example, are difficult to put forth in a SOA context for reuse.

Gardner: IBM has done some work along those lines, but they have a wide variety. As they go into these accounts on a professional-services basis, they’re not just looking for IBM applications. They’ll take anything.

Biske: A lot of this is a WebSphere story.

Gardner: Clearly, IBM is putting up the software to accomplish just about anything you want to do in an enterprise, but it’s the way in which they’re taking SOA to market and realizing SOA. Dave Linthicum, what do you think about this notion of a raised SOA, and that the people who can combine domain expertise, professional services and reuse are not only going to try to beat out other players in the field, but also the IT departments themselves?

Linthicum: That’s absolutely the strategy here. What I’ve been listening to is spot on. Everybody is trying to own, not only the domain of the technology, but the domain of the IT infrastructure within these organizations. In fact, I just got a briefing this morning for something that was embargoed for a few weeks. They’re really trying to displace traditional IT. The analogy to Salesforce.com was spot on. In other words, Salesforce.com kind of got in there through the back door, allowing people to buy their infrastructure via credit cards.

I think IBM and some of the other strategic thinkers in the space are trying to run as quickly as they can to grab land right now, because the more land they grab, the more they can hold for a long period of time. Everybody on this call knows, it’s a great business to be in -- the infrastructure game -- because once you’re in these organizations and you’re adding value there and you're core to their business processes, you’re never going to leave.

Gardner: IBM clearly sees that they want to be partners with these companies. They don’t want to displace IT, but they want to get in a way that you can’t, as you say, be removed. Todd Biske is someone who is in the consulting business. You probably want to get into accounts where they can’t get rid of you either. Is this a good business strategy for IBM?

Biske: I think it is a good business strategy for IBM, but one of the comments I was just going to make, and you actually just hit on it, is that I don’t know that IBM can come across with a strategy of replacing IT. I absolutely agree that the business side needs to work with IT as partners. We need to establish this "T," as IBM put it, where we’ve got technical depth, as well as business depth, and a team that really embodies both of them. The only way to do that is going to be through a partnership, rather than having this customer-supplier type of relationship between the business and IT.

I’ve actually blogged on this, even prior to becoming a consultant and talking about what's going to be the role? I saw this convergence of business consulting areas, whether it was Six Sigma-based or some of these other initiatives from years ago that were primarily business focused with the IT consulting services part of it. Just as IT workers in the enterprise need to become business aware, so do the consulting firms. Having a business offering, where you have focus on the domain models that have been discussed, is critical both to the consulting vendors, as well as the actual technology vendors.

So, IBM is in a great position, where they’ve got both. They’ve got the whole technology stack. They’ve got the whole consulting stack on top of that, and the business domain expertise, whether they’re doing the peer technology side of it or the business domain modeling and providing all of the business consulting. If they’re going to get into a situation, though, where IT is outsourced, now they've got this customer-supplier relationship again. To what extent can business really partner with that group, and how comfortable are they going to be putting all their eggs in the basket of an organization that may be trying to do this with too many enterprises and can't create that competitive difference?

Kobielus: What's interesting is that this platform land grab -- I like the phrase you used there, Dana – extends on top of your SOA platform. One of the linchpins of any SOA architecture or application environment is your data warehouse. On top of that you build your business intelligence. On top of that you build your corporate performance management. On top of that you build your governance risk and compliance tools, and so forth. Each of these layers requires additional business content and domain models. Each of these vendors, at least in data management, are continually migrating up the stack by layering ever more finely nuanced business content on top of this underlying SOA platform. Then, using those business content-rich applications as a platform for their professional services, teams, and partners, they go out and market these packaged solutions into ever more finely graded niche markets.

Gardner: Do you think that in five years, if we look at some of these leading-edge, large global enterprises, their IT departments are going to become operational efficiency experts? They’re going to take whatever it is that’s been decided on to keep running. And, they’re going to figure out the best way to virtualize, consolidate, unify, and modernize to keep those things running the best way they can for the least amount of money. That the new role that companies like IBM and these other SOA business services-focused companies will find to add value -- how to innovate, how to create new business processes.

So, it’s almost taking on the role of the SOA architect, recognizing that the companies themselves can’t pull this all together. They’ve got some high-performing custom development capabilities. They’ve got packaged applications. They’ve been fumbling around trying to figure out integration for five or seven years.

And, now IBM and others can walk in and say, “Well, listen, we’re going to rationalize this for you. We’re going to show you how to innovate around compositing. We’re going to reuse what we know and we’re going to be really tight with you in your vertical industry.” So, it seems like a new role, it’s like not outsourcing IT per se, but it’s outsourcing the role of innovation, and architectural innovation.

Kobielus: Exactly. I see the whole area of composite applications built on SOA, in terms of professional services teams, as the primary delivery channel for these solutions. The productization, as it were, of professional services is taking place through the concept of the center of excellence. Every vendor has multiple centers of excellence now, each of them focused on a particular horizontal or vertical space. Over time, then, as we see more of a momentum and more of the premium margins shifting to professional services, the centers of excellence are now the product groups now in an SOA vendor organization. They’re the stewards of the domain content, domain models, and expertise.

Gardner: If there is a more finally grained approach to these verticals, then they can create the ecology where they’ve got individual consultancies that are even more down in the weeds on these vertical business issues, and they just partner with them, while IBM and its ilk just associate those services in with this business compositing capability.

Biske: That may be an appropriate strategy for IBM, It would be somewhat risky for a large enterprise to take the approach of outsourcing innovation. I would think the business is going to want to outsource things that are not going to be competitive differentiators. Innovation clearly can’t be a competitive differentiator, if you’re saying “IBM, just give it to us.” Guess what? All of your competitors are going to be saying the same thing. So, how do you create a difference out there?

Innovation needs to remain inside the enterprise, looking at those vertical areas. It may not be technical innovation any more. It may be a shift back to where the driver is more business-process centric. Technology is just a supporting aspect of that. Then, maybe another 10 years from now, it will shift back with some new technological change. That’s just the way things work, but to outsource innovation would be a very risky approach for a large enterprise, because inherently it’s not a commodity.

Gardner: That’s a point well taken. Perhaps if the enterprises were smart, they would view a company like IBM coming in to teach them how to innovate, or learn how to fish, rather than have someone fish for them, and therefore take the next step, but I think the race is on. IBM is challenging people, “If you let us do this first and best, then we’re going to make the economics such that you can’t resist that.” That’s a challenge to the companies to take your advice and say, “Listen, we can’t lose track of our core competencies around innovation and we need to start thinking about SOA more seriously.”

[[[Speaker:]]] Right, and maybe they’re taking advice from the Tom Watson Playbook from many years ago. IBM, when it started in the computer business back in the 1950s, positioned themselves as a consultant to the business. They did not position themselves as a technical firm, such as Sperry might have done, or DEC in the early days.

Gardner: Well, they certainly took pains at the Innovate event to portray that they are a business-partnership company and the technology is merely a means to achieving that. Let’s take a look now at the field. How many companies can actually come up to the plate with the broad set of services to be a full SOA partner? I would say this is probably the big four. We have Microsoft, IBM, Oracle, SAP. I suppose now there’s a question mark about HP. How is HP going to rise to be the full player, and will they do it through the Switzerland, open-source approach? Will they do it though acquisition?

We also need to look at SAP as to how they are going to do this. We thought they had a strategy around more of a services approach and NetWeaver. Then, Shai Agassi left, and there was an interesting story in the Wall Street Journal where Shai said that the innovation doesn’t seem to be happening at the right pace. Any thoughts there about how we handicap the field, given this move towards the larger definition of SOA under the business services umbrella?

Speaker: [[[Todd Biske]]] You’ve captured it with really the top four, I can’t think of anybody else that comes to mind. In one of the articles talking about the HP release, Anne Thomas Manes pointed out that HP is a management company from the technology side. Unless there is a partnership with someone that can fill that middleware gap and the development environment, they don’t have the full story. It doesn’t necessarily have to be through acquisition, because there is a multitude of open-source products out there, but if you look at the Java side, everybody is pretty much using Eclipse. Who is the biggest backer of Eclipse? Well, it’s IBM. So, in trying to get an advantage there, IBM still really rules the roost and has significant influence in that direction. You nailed it, though, in terms of there really is a small set of players who can bring that much to the table.

The other space to look at would be: Who can come at it purely from the business and technology consulting side of it to build that on? Maybe it’s not strictly a technology player. Maybe it’s someone from the consulting side and someone from the consulting firms.

Gardner: There’s the rub. What will these SIs do? What about Accenture, EDS, CapGemini, and BearingPoint, and the Indian companies like Tata and Infosys -- or even another higher level consultancy like a McKinsey? Who are they going to partner with. They don’t want to lose this ability. Folks are working with how to organize the management, the actual conduct of how a company operates -- which we could probably put under governance generally. How does that relate to technology? So, the other shoe to fall here is, as these companies that are outside the pure technology space look at the technology companies moving in towards the business services space, how will that shake out? Dave Linthicum, any thoughts on that?

Linthicum: Basically, the large players are going to have to have an impact in terms of the technology sector. The service stuff is going to augment the technology, and they’re going to drive in this area. The larger consulting organizations are behind right now in how they’re defining and deploying SOAs. I’m always taken aback, as I walk around my clientele and review some of the proposals from these larger guys, by how much is missing from their strategy and the lack of understanding of how this stuff is going forward.

What may happen is that some of these large-stack players -- IBM is definitely included in that -- are going to come behind and eat their lunch. Some of the smaller consulting organizations are also going to do the same thing. They may protect themselves through acquisition and within these organizations, so they can control a lot of the political infrastructure, who makes decisions, and how you buy services from these folks.

At the end of the day, enterprises are about results. If their competitors are able to jump by leaps and bounds, using somebody’s technology or somebody’s approach, they’re going to go with that technology and approach. The big consulting organizations have a long way to go in really understanding the value, processes, and methodologies, and how you define those things within those organizations.

Gardner: Because of these three announcements, because of the influence that IBM has across the industry and across the globe, we have a little seismic shift here this week in raising the stakes to the business services level, and perhaps highlighting some of the new competitive relationships among and between these companies.

As the vendors themselves face new types of competition, enterprises also have to consider whether it makes sense to try to save a few dollars and push SOA initiatives off into the future, or that their ability to do SOA sooner than later might put them in an advantageous position, or, as someone said earlier, not to lose their ability to innovate.

So, let’s go around the panel one last time. Do we see a seismic shift, and do you really think the landscape has changed? Let’s start with Joe McKendrick.

McKendrick: I just want to add one more vendor. You mentioned the big four, but BEA Systems should also be one of the bigger SOA movers and shakers. They offer a wide range of products including the development side and the deployment side.

Gardner: Of course, they’ve also mentioned this neutrality and Switzerland approach, where they would be a preferred partner to the Accentures and the other large system integrators because there is not this "co-opetition" affair.

McKendrick: One thing I’ve seen in Microsoft statements in the past, is that they take a contrary position to what the other large infrastructure vendors say about SOA. Microsoft says SOA should not be about big science. It should not be big SOA, huge multi-million dollar deployments, affecting organizations, but rather more of organic or gradual incremental approach on a case-by-case basis.

Gardner: Their application strategy sort of follows along those lines.

McKendrick: Exactly. In fact, their history follows along those lines. They’ve always kind of seeped in at the grassroots level within organizations, and moved up the chain that way. I see them doing that with SOA as well.

Gardner: Okay, Jim Kobielus, do you sense a seismic shift here. Has the game changed in anyway for you?

Kobielus: It has, and I sort of laid out how it has changed. Deep-domain expertise is being incorporated into a new type of packaged application that to some degree competes with or complements traditional line of business applications, corporate performance management (CPM) applications. Over the last month, there has been a rash of industry announcements, acquisitions, and so forth related to CPM -- SAP acquiring OutlookSoft, Oracle with Hyperion, Business Objects, -- and Microsoft of course. I want to get back to Microsoft. They are very much a major SOA player.

What Joe just said was instructive about Microsoft. They are always ingratiating themselves. They’re always weaving their way into an organization from the ground-up, and they’re doing the same thing with CPM, with Office Performance Point Server, which is coming out in a few months.

When I was at their business intelligence (BI) conference, I spoke to Alex Payne who heads up the BI unit and I asked him point blank, “Does Microsoft, plan to develop verticalized CPM applications to run on Performance Point?” He said, “Well, we want those applications to be built and we’re gong to rely on our channel partners, on the ISVs and so forth, who have that expertise.”

So, getting back to your original point, yes, the move toward domain models and so forth, as a way of differentiating solutions, is disruptive in the sense that the traditional application is dissolving and being replaced by composite services. But, it’s not really changing the vendors themselves in the sense that each vendor has their own history, their own character that’s coming to the fore. In this case, Microsoft’s character is to be a provider of ubiquitous infrastructure at the desktop. They are not a professional services firm, and I don’t get the sense that they’re going to get beat in global services. They’re going to rely on the third parties, the Accentures of the world, for that.

Gardner: Interestingly, at the keynote event, Steve Mills, the software general manager and vice president at IBM, referenced some research. I’m not sure whether IBM sponsored the research or not, but it defined SOA-related revenues. Number two, after IBM, was Microsoft, albeit a fourth of the total number of dollars that IBM cites, but clearly Microsoft is big in this game.

Now, to you, Dave Linthicum, game changing week, how do you see this impact?

Linthicum: I don’t see this as a seismic shift. I see it as an evolution in thinking and the way people are positioning the market. The hype out there is so loud that people are just trying to figure out how to out-innovate each other in how they message to the marketplace -- this is an instance of that – and in the products and services they’re going to bring to market, and how they’re going to dominate those. It’s the point that was made earlier; it’s a land grab.

Going forward, one of the key things to remember is that we’re evolving an enterprise application to service-based distributed systems, where you can actually use composite applications to meet many of your business process needs. That’s only going to continue, especially as people outsource business processes to folks like Salesforce, who are moving from monolithic enterprises-on-demand to granular services they’re going to sell very much like Amazon is selling services today, and making a lot of money in making that happen. That’s going to be a key thing.

We always return to the domain verticalization stuff within any technology push. Remember when the integration was the hot issue back in 1998, 1999? When I wrote the AI part, everybody was almost saturated with technology in terms of hype. Everybody started moving in the vertical spaces, and verticalized integration was all the key. We’re seeing a similar pattern here. Probably we’re spending more money, and the hype is noisier than it was back then, but it’s the same thing. I think it’s a good thing, because you can meet the needs of a particular problem domain, if you verticalize and you have specialized processes and services to drive that. But, it’s nothing new. I don’t think it’s hugely disruptive -- just the evolution that I expected.

Gardner: Tony Baer, do you see this as IBM defining the world as best suits IBM or more of a larger shift in the market?

Baer: I’m going to be a classic straddler here -- it’s really both. IBM is obviously playing up to its strength, which is that it’s the glue that puts pieces together.

It’s very much a challenge to what was the established order for about the last 15 years of the primacy of the monolithic apps vendors. There are a couple of things I was just jotting down during the discussion. If SOA and composite apps are to succeed, they’re not going to succeed by being consultant ware, the type of stuff that can only be put together on a custom piece basis. The whole idea behind SOA is this is stuff that you can put together very rapidly.

So, obviously, there will be a role for professional services here, but they need to be enablers so that my team internally -- whether they be business architect or whichever role that evolves -- can readily combine and configure different composite services to deal with a particular challenge or as I introduce a new product. I’m talking about a product in the classic, manufacturing sense. I’m not talking about an IT product. So, the fact is, if SOA is to succeed, it will not succeed as being consultant ware.

Gardner: I agree with that. What we might need to see in order to hedge or balance the power of the consultancies is the equivalent of open-source composited services. One of the things I asked IBM, after the discussion about business services was, “What do you guys do about IP, Intellectual Property?” They said, “Oh, that’s one of the first things we talk about, and we bring lawyers in every time we’re getting engaged with a client. We have to decide if they want the IP, and, if so, there is a certain cost associated with that. If we get to keep the IP, that is, we can create services that will be then reused elsewhere, then the cost comes down.”

So, what might need to happen is a third way, where when people get engaged with companies like IBM, and they’re going to do compositing of business services. Perhaps they say, “We want to put this intellectual property under an open-source license, and we’re going to use it in a commoditized sense. Then, we’re going to highly customize and we’re going to take that and make it our own intellectual property.”

Perhaps the way to make this whole SOA business-services thing work is licensing around those composite services, so that it’s not just a competitive hedge or some sort of a balancing act. I’m just blue skying at this point, but it seems like a licensing of the property around these services is going to become important.

Let’s go to Todd Biske for the last word, seismic shift or just more IBM market positioning?

Biske: I tend to agree with Dave on this one. This is just an evolutionary approach, and IBM’s marketing is making some significant rumblings that are making people more aware of what’s going on. I’ve been thinking about this at least for the last couple of years. I’m seeing it coming, and no, I’m not the only one who is thinking along these lines. This is just part of a natural progression that we’ll see with this. Whenever any of those big four or big five vendors have a major sales or user conference, we’re going to see announcements like this as they try to position themselves better in the marketplace.

So, I do think that it’s evolutionary. I think it’s good and it’s the direction that things need to go in, but the hype will die down after a little while, and most people will still keep trudging along. I would still like to see more case studies out there, showing concrete success, where the adoption of SOA has really created a true change in the organization. A lot of the case studies we see today come from companies that were already well positioned to be successful, and they have just extended their model in an evolutionary manner.

Gardner: Obviously, we’re still very early on. Maybe we went from the first inning to the second inning in this, so a minor transition. But, I think the takeaway is that IBM has made some moves that then force people to think a little bit different, which, of course, gets us a little closer to making some of this happen in the enterprise. I want to thank our panel for joining us. We’ve had Joe McKendrick, thanks Joe.

McKendrick: Thank you Dana.

Gardner: Jim Kobielus, thanks for joining.

Kobielus: Thank you, it was a pleasure like always.

Gardner: Dave Linthicum, thank you for coming.

Linthicum: Thank you, you guys, have a great three day weekend.

Gardner: Tony Baer, thanks for your input.

Baer: Well, thanks again Dana.

Gardner: Also, Todd Biske, thank you.

Biske: Thank you.

Gardner: This is Dana Gardner, principal analyst at InterArbor Solutions. You’ve been listening to BriefingsDirect SOA Insights Edition, Volume 19. Come back next week. Thanks, everyone.

Listen to the podcast here.

Produced as a courtesy of Interarbor Solutions: analysis, consulting and rich new-media content production. If any of our listeners are interested in learning more about BriefingsDirect B2B informational podcasts or to become a sponsor of this or other B2B podcasts, please fill free to contact Interarbor Solutions at 603-528-2435.

Transcript of Dana Gardner’s BriefingsDirect SOA Insights Edition, Vol. 19. Copyright Interarbor Solutions, LLC, 2005-2007. All rights reserved.