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SOA marches on despite U.S. economic troubles, analysts say

Born in the recession that began this decade, analysts see SOA continuing its role as an cost-effective architecture even in a troubled economy, where there is so far little data to indicate that it is being adversely impacted.

If service-oriented architecture (SOA) is being impacted by fluctuations in the U.S. economy, which is experiencing spiking oil and gasoline prices and falling consumer confidence, analysts covering the space see little evidence of it so far.

SOA offers cost savings and agility, two essential benefits in good times and bad.
Jason Bloomberg
Senior AnalystZapThink LLC.

In an informal survey, analysts in the SOA space said they are seeing little recessionary impact, although it may be too early to tell.

"I can't say I've seen any effects either way on SOA projects," said Joe McKendrick analyst with McKendrick Research, when asked if there were good or bad economic impacts to the architectural approach. "But, there hasn't been agreement as to whether there is even a recession taking place in the economy at large. I've heard this called the 'unrecession,' which sums it up pretty well. More likely, there has been a slowdown in some sectors. If so, there have been little or no ripple effects on corporate IT budgets, so far."

He notes that the recession earlier in this decade reduced IT budgets and staff to lean and mean levels where they remain with little room for cost cutting in most cases.

"Corporate IT budgets did feel the sting of recession between 2000-2003, and as a result, scaled back dramatically in purchasing and staffing, while increasing outsourcing," McKendrick noted. "This leanness exists to this day, so there aren't many places where IT needs to or can get cut."

Looking back, the analyst said that recession gave birth to SOA.

"The IT recession of the early 2000s was also the impetus that lit the fire under service-oriented architecture in the first place, since SOA was seen as a way to consolidate new application development within a standardized framework, as well as leverage existing legacy assets," McKendrick said. "Even when things got better in recent years, companies still were concerned with increasing the efficiency and productivity of IT, and SOA is seen as a way to do it."

The peril of not pursuing SOA
Given its roots in the most recent recession, Jason Bloomberg, senior analyst with ZapThink LLC., argues that whatever is happening with the economy it is a mistake to scale back on SOA.

"Companies who have been struggling with SOA -- either in the planning or deployment stages -- are at risk of canceling or scaling back their initiatives to their peril," Bloomberg said. "After all, SOA offers cost savings and agility, two essential benefits in good times and bad. What smart organizations are doing is taking a more focused approach to their SOA initiatives, driving toward key business benefits with more rapid, less expensive iterations that show value quickly."

Randy Heffner, vice president at Forrester Research, is among the analysts who have not seen any data that links the ups and downs in the U.S. economy to SOA. He said Forrester has "No real data to judge effectively - but anecdotally client activity and inquiry hasn't gone down beyond a level of normal variation."

Bradley F. Shimmin, principal analyst of application infrastructure at Current Analysis LLC., said his firm is awaiting the financial reports at the end of this quarter to get a better idea of what impact a recession might be having on SOA vendors.

"We're waiting until June/July to see if things are as bad as we think before diving into that one," Shimmin said. "But for now, using anecdotal evidence from a couple Q1 filings, it looks like US sales are not 'bad,' but vendors are still eyeing European and particularly Asian/Pacific sales opportunities, which have proven to be very profitable over the past six to nine months. For that reason, many mostly US-based companies are pushing hard to expand into these regions, and fully international companies are seeking to leverage the overall positive overseas financial climate."

Bolstering the view the SOA vendors may still be doing well with their international business, Neil Ward-Dutton, research director, of the UK-based Macehiter Ward-Dutton, said he had seen no evidence of an impact in his research in Europe.

Does America have an appetite for architecture?
Absent data that SOA is being hurt by current U.S. economic conditions, Tony Baer, principal analyst with onStrategies LLC, sees the architectural approach struggling more with a "midlife crisis" after being hailed as a economic savior in the earlier recession.

"I haven't seen anything quantitative," Baer said, "instead I see more of a midlife crisis, as evidenced recently in the WOA vs SOA debates."

Asked if the midlife crisis might be denial of deeper problem for SOA in difficult economic times, Baer replied: "I think it's more classic Gartner trough of disillusionment. The early hype that this was a new architectural paradigm, but in an era where IT budgets and organizations are lean, there's scant appetite at least in North America for major architectural initiatives – IT budgets and organizations are pretty lean today. Look at webMethods, whose business found far more fertile ground in Europe following acquisition by Software AG."

Whatever the economic conditions, Baer, citing the view of Anne Thomas Manes, the research director for the Burton Group, sees SOA eventually coming through its midlife crisis even if expectations for it change.

For more information
Burton offers strategy for SOA in hard times

How SOA may thrive in a recession

"The other source of the disillusionment is a backlash against the complexity of Web services-style SOA," Baer said. "That's fueled debates of WOA vs SOA, although at the end of the day, I really like the way Anne Thomas Manes summarized it: it's different architectural styles of SOA for solving different software development needs."

As an architectural style SOA will survive whatever crisis it may currently be going through, Baer said.

"In general, I think that SOA is likely to reemerge in the supporting role that it was always meant to be, in scenarios where you need the ability to compose an app or process," he concluded. "It's a means, not the end – in spite of the original hype that this was the next inevitable stage of EA."

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