Tuesday, September 20, 2005

From Oracle to SOA Governance

Consolidation: Oracle acquires Siebel

Oracle's acquisition of Siebel (together with its previous acquisition of PeopleSoft) is attracting a great deal of interest.

Some stakeholders and observers have made interesting comparisons.

. Oracle is the new Computer Associates Marc Benioff (SalesForce.com)
. Oracle is the new Microsoft Dana Blankenhorn (ZDNet), Paul Roberts (eWeek)

Both of these statements need to be taken sceptically in my view; each large IT company has its own style of acquisition, its own style of managing (and possibly integrating) its expanding product portfolio.

Nicholas (Does IT Matter?) Carr comments on the duality of this event: consolidation and disruption. At one level, enteprise software becoming a mature commodity ripe for consolidation; at a higher level enterprise solutions becoming decomposed and recomposed according to SOA principles. See also commentary by Dan Farber (ZDnet).

Disruption: Salesforce

If there is to be disruption, the business model being promoted by SalesForce.com seems like a good candidate. A number of commentators (see above) have been convinced by Marc Benioff's bullish statements at DreamForce (the SalesForce.com conference). However E. Schwartz (InfoWorld TechWatch) posts a sceptical note. The key question here is whether large corporate users will be willing to rely upon a smaller service provider, and how long can SalesForce.com remain independent. (Many commentators have been unable to resist speculating about a possible future acquisition of SalesForce.com; and it is always fun to imagine various win-win permutations.)

Asymmetric Rationalization

Industry consolidation involves a form of supply-side rationalization: rationalization of the vendor by the vendor for the vendor. Of course, acquisition is only the first step of this process. There are various possible outcomes in terms of the consolidation of sales and marketing, the consolidation of brands, the consolidation of underlying technologies, components and platforms. Large software companies are generally trying to get a good balance between extracting maximum revenue from cash-cow software products and/or services, and developing new markets for new products/services.

Meanwhile, large corporate users are also under pressure to rationalize their IT provision - to achieve maximum economies and value-for-money while continuing to support the complex and changing IT requirements of the business.

The relationship between these two rationalization processes is a complex one. While there are some obvious conflicts of interest, there are also many opportunities for collaboration: between vendors, between users, as well as across the vendor-user divide. OpenSource and ApplicationExchange (which Nicholas Carr sees as a reincarnation of IBM SHARE) can both be regarded as forms of sociotechnical collaboration.

SOA Governance

Which somehow brings us to Service-Oriented Architecture (SOA).

James Governor (Redmonk) suggests that the Oracle consolidation provides a trigger for user organizations to sort out IT governance - as a defence against the growing monopoly power of Oracle. Perhaps now is the time to sort out your relationships across the IT vendorspace, sort out your platform and procurement strategy. This is the user side of vendor rationalization.

Radovan Janecek (Systinet) (SOAG Starting Point, Ultimate Vision of SOA) explains why this is an SOA governance issue and not just an IT governance issue. The bones of his argument are like this: business goals ... IT services ... reuse ... trust ... contract ... control ... metadata. And for Joe McKendrick (ZDNet), SOA provides a vision of independence from any single vendor.

At one level, standardization on a product or platform ties you to a specific vendor or vendor community. Software monoculture carries significant risk - both because it increases the likely impact of any security breaches, and because it may foreclose some forms of innovation. However, if you can standardize the interfaces at the right level, you may be able to combine software economies with requisite variety and software biodiversity. Doing this properly is a complex architectural trick, but if it is achieved it provides a great argument for SOA.

The big picture is broader than a single organization. While large organizations will need internal SOA governance, they will also increasingly need to participate in external SOA-based collaborations. There are two kinds of interoperability involved - endo-interoperability (within a single enterprise) and exo-interoperability - and therefore at least two kinds of SOA governance.

For more on SOA Governance, please look at my article on Metropolis and SOA Governance. written with Philip Boxer and published in the Microsoft Architecture Journal. We are currently working on a sequel, in which we will illustrate the concepts of endo-interoperability and exo-interoperability, and explore their implications for structure, process and organization. Any discussion would be most welcome.

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