The State of Service-Oriented Architecture

TechWebTechWeb

August 2008

TechWeb The State of SOA August 2008 Page 2

Overview

A service-oriented architecture (SOA) approach to software design is becoming a major initiative of many organizations worldwide, thanks to the promise of providing a dynamic and highly efficient process that allows for continuous changes in response to evolving business and market conditions. SOA success depends on solid executive backing and a keen understanding that business process optimization is the real killer app for a service-oriented architecture.

The State of SOA study, sponsored by Satyam, was conducted by TechWeb in an effort to understand how organizations are leveraging SOA to help their businesses become more adaptable to change and more responsive to shifting dynamics.

The following report illustrates the challenges businesses face and the opportunities they discover as they work to construct a comprehensive and highly automated software foundation to support business processes.

The State of

SOA

TechWeb The State of SOA August 2008 Page 3

Methodology

Sample: In July 2008, TechWeb sent e-mail invitations to an Nth name sample of those who have agreed to be contacted by TechWeb. The sample was drawn from the U.S. and Canada.

Questionnaire: The questionnaire was developed by TechWeb, and administered via a Web-based survey.

Fielding: E-mails were sent to subscribers inviting them to participate in an online survey. An embedded URL directed respondents to the survey hosted by our Web survey host partner, SurveyGizmo.

Response: A total of 315 respondents completed the survey. Data is based on these 315 respondents unless otherwise noted.

The State of

SOA

TechWeb The State of SOA August 2008 Page 4

Conclusions

The State of

SOA

The study reflects the reasons SOA is heading to the top of enterprise to-do lists, as organizations deal with turbulent economic forecasts and increasingly competitive market conditions.

Among the key benefits organizations say they have seen from their SOA implementations are faster application deployment, facilitation of business process optimization plans and increased ease of development.

TechWeb The State of SOA August 2008 Page 5

The State of Service-Oriented Architecture

STUDY FINDINGS

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SOA Initiatives Driven by Business Requirements to Be Agile and Cost-Effective

What business/economic issues are driving your organization to explore implementing SOA as a

means to improve business processes?

What business/economic issues are driving your organization to explore implementing SOA as a

means to improve business processes?

Desire to automate operations to improve customer response times

70%

Requirements to lower operating costs through automation, due to the recession, internal budget concerns, or both

36%

Need to capitalize on emerging market opportunities

30%

Must accelerate time-to-market due to increased competition from international businesses

19%

Other 10%

The State of

BPO

The State of

SOA

The need to build a business that can react quickly to changing market dynamics and better meet customer needs is, in large part, driving companies to launch SOA initiatives.

The need to build a business that can react quickly to changing market dynamics and better meet customer needs is, in large part, driving companies to launch SOA initiatives.

Multiple responses allowed

TechWeb The State of SOA August 2008 Page 7

Businesses Aim to Streamline Integration With SOA

Need to simplify integration among separate applications supporting discrete business processes

39%

Require the ability to reuse components to expedite application development and process change

33%

Desire to improve process automation 20%

Need to preserve legacy software assets 7%

Other 1%

The State of

BPO

The State of

SOA

Businesses view SOA as a way to modernize their application infrastructures by better integrating existing software to support cross-application processes, and by creating a repository of reusable components to be tapped for use in new business processes.

Businesses view SOA as a way to modernize their application infrastructures by better integrating existing software to support cross-application processes, and by creating a repository of reusable components to be tapped for use in new business processes.

Multiple responses allowed

What technology requirements are leading your business to use SOA as part of a business process

optimization strategy?

What technology requirements are leading your business to use SOA as part of a business process

optimization strategy?

TechWeb The State of SOA August 2008 Page 8

SOA Presents Opportunity to Improve Knowledge Processes

Nearly half the survey respondents believe SOA will have a positive impact on their analytics and business intelligence processes. A service-oriented architecture can give organizations a foundation to adapt business processes quickly in response to intelligence delivered by BI reports and dashboards.

Nearly half the survey respondents believe SOA will have a positive impact on their analytics and business intelligence processes. A service-oriented architecture can give organizations a foundation to adapt business processes quickly in response to intelligence delivered by BI reports and dashboards.

What processes is your business trying to improve by using SOA?

What processes is your business trying to improve by using SOA?

The State of

BPO

The State of

SOA

Multiple responses allowed

44%

39%

35%

34%

29%

28%

23%

18%

18%

17%

17%

15%

8%

6%

TechWeb The State of SOA August 2008 Page 9

More Than One-Third Are Just Starting Out With SOA

We are in the initial phases of designing, testing and/or deploying composite applications in support of business process optimization

40%

We are currently evaluating whether SOA could help us optimize our business processes

25%

We have a cohesive and functional software environment that leverages SOA to support business process management

19%

We have decided to use SOA in our software development environment, but have not yet begun the design process

16%

The State of

BPO

The State of

SOA

Though there is considerable enthusiasm about SOA’s potential, most businesses are still just scratching the surface with regard to the role a service-oriented architecture will play in their software design strategy with respect to business process management.

Though there is considerable enthusiasm about SOA’s potential, most businesses are still just scratching the surface with regard to the role a service-oriented architecture will play in their software design strategy with respect to business process management.

One response allowed

Which of the following best characterizes the role SOA plays or will play in your company’s software design strategy around business process management?

Which of the following best characterizes the role SOA plays or will play in your company’s software design strategy around business process management?

TechWeb The State of SOA August 2008 Page 10

Most Companies Still in Discussion and Development Stages

Twenty-one percent of surveyed companies are beginning to develop and design applications around a service-oriented architecture, and 20 percent are still in the discussion phase. Just 11 percent are implementing SOA-based applications.

Twenty-one percent of surveyed companies are beginning to develop and design applications around a service-oriented architecture, and 20 percent are still in the discussion phase. Just 11 percent are implementing SOA-based applications.

At what stage are you in your SOA implementation? At what stage are you in your SOA implementation?

21%

15%

4%

21%

13%

11%

10%

2%

3%

The State of

BPO

The State of

SOA

One response allowed

TechWeb The State of SOA August 2008 Page 11

Majority Implementing SOA Enterprisewide

Most organizations see value in orchestrating enterprisewide SOA initiatives, though some report issues with costs, inefficiencies, and lack of cooperation.

Most organizations see value in orchestrating enterprisewide SOA initiatives, though some report issues with costs, inefficiencies, and lack of cooperation.

Is your organization implementing SOA on an enterprisewide basis, or planning to do so?

Is your organization implementing SOA on an enterprisewide basis, or planning to do so?

Yes, part of enterprisewide

strategy57%

No19%

Don’t know24%

It is still too early to tell 52%

No, it is going well 23%

Yes, lack of IT and/or line-of-business cooperation 14%

Yes, this is a costly and inefficient process 11%

Have you run into any issues implementing it this way?Have you run into any issues implementing it this way?

One response allowedBased on the 178 who answered “Yes” above

The State of

BPO

The State of

SOA

TechWeb The State of SOA August 2008 Page 12

Web Services Is No. 1

SOA does not equal Web services. Organizations can take many roads to achieve loose coupling among interactive software agents. But it’s clear that Web services are critical to many deployments.

SOA does not equal Web services. Organizations can take many roads to achieve loose coupling among interactive software agents. But it’s clear that Web services are critical to many deployments.

What technologies are you using, or planning to use, to implement SOA?

What technologies are you using, or planning to use, to implement SOA?

91%

57%

27%

19%

17%

15%

13%

4%

The State of

BPO

The State of

SOA

Multiple responses allowed

TechWeb The State of SOA August 2008 Page 13

SOA Still an Emerging Success Story

SOA has made application integration much easier in some companies, and allowed for greater consistency and flexibility across composite applications and systems. Some survey participants also laud SOA for increasing collaboration and knowledge exchange throughout the business.

SOA has made application integration much easier in some companies, and allowed for greater consistency and flexibility across composite applications and systems. Some survey participants also laud SOA for increasing collaboration and knowledge exchange throughout the business.

What tangible results have you seen so far from your SOA implementation?

What tangible results have you seen so far from your SOA implementation?

25%

59%

24%

20%

3%

3%

None yet, it’s too early to tell

Faster application development/deployment time

Facilitates business process optimization

Easy-to-use software development environment

None, this has not been a successful initiative

Other

The State of

BPO

The State of

SOA

Multiple responses allowed

TechWeb The State of SOA August 2008 Page 14

SOA Implementations: Most Satisfied, Some Excited

Given that SOA is still relatively new, it isn’t surprising that most wins thus far have been small and incremental. The majority of survey respondents report satisfactory progress on their SOA deployments. Just under one-quarter rate their SOA implementations “unsatisfactory” or close to it, while another quarter rate their SOA projects “exceptional” or nearly so.

Given that SOA is still relatively new, it isn’t surprising that most wins thus far have been small and incremental. The majority of survey respondents report satisfactory progress on their SOA deployments. Just under one-quarter rate their SOA implementations “unsatisfactory” or close to it, while another quarter rate their SOA projects “exceptional” or nearly so.

On a scale of 1 to 5 with 1 being “unsatisfactory” and 5 being “exceptional,” please rate the success of your

SOA implementation so far.

On a scale of 1 to 5 with 1 being “unsatisfactory” and 5 being “exceptional,” please rate the success of your

SOA implementation so far.

Unsatisfactory 1 2 3 4 5 Exceptional

6% 16% 57% 19% 2%

The State of

BPO

The State of

SOA

TechWeb The State of SOA August 2008 Page 15

Poorly Documented Business Processes Challenge Half of Respondents

What are the biggest challenges associated with your SOA deployment?

What are the biggest challenges associated with your SOA deployment?

38%

49%

20%

18%

6%

7%

Poorly documented business processes

Development time not as rapid as expected

Application component reusability is not easy to achieve

Management concerns that SOA is a fad that will not yield results

Lack of IT cooperation

Other

More complex development environment than anticipated

35%

32%

Lack of executive sponsorship

Unproductive interactions among IT and line-of-business managers

14%

13%

Very costly 12%

Dissatisfied with SOA standards

Multiple responses allowed

The State of

BPO

The State of

SOA

Not all SOA challenges are technical. In some cases, the business culture and funding issues create obstacles to SOA deployments.

Not all SOA challenges are technical. In some cases, the business culture and funding issues create obstacles to SOA deployments.

TechWeb The State of SOA August 2008 Page 16

Single Biggest Challenge: Complexity of Development Environment

SOA isn’t for amateurs. The complexity of development environments presents the biggest challenge to enterprises.

SOA isn’t for amateurs. The complexity of development environments presents the biggest challenge to enterprises.

Of the challenges mentioned in the previous question, which one has been the single biggest

obstacle to your SOA deployment?

Of the challenges mentioned in the previous question, which one has been the single biggest

obstacle to your SOA deployment?

21%

24%

8%

7%

1%

4%

Poorly documented business processes

Development time not as rapid as expected

Application component reusability is not easy to achieve

Mgmt. concerns that SOA is a fad that will not yield results

Lack of IT cooperation

Other

More complex development environment than anticipated

10%

9%

Lack of executive sponsorship

Unproductive interactions among IT and line-of-business managers

7%

5%

Very costly

4%

Dissatisfied with SOA standards

One response allowed

The State of

BPO

The State of

SOA

TechWeb The State of SOA August 2008 Page 17

Application Component Reuse Is Low

So much of SOA’s promise lies in its ability to speed application development by allowing reuse of components. But nearly three-quarters of survey respondents have been able to reuse only 25 percent—or less—of application components.

So much of SOA’s promise lies in its ability to speed application development by allowing reuse of components. But nearly three-quarters of survey respondents have been able to reuse only 25 percent—or less—of application components.

What percentage of application components has your organization been able to reuse?

What percentage of application components has your organization been able to reuse?

The State of

BPO

The State of

SOA

None 17%

1 percent to 10 percent 31%

11 percent to 25 percent 25%

26 percent to 50 percent 18%

51 percent to 75 percent 7%

76 percent to 100 percent 2%

TechWeb The State of SOA August 2008 Page 18

Less Than One-Quarter Use a Service Provider to Help in SOA Projects

As the previous slides show, moving to become an SOA-enabled enterprise that can continually drive business process improvements is challenging and potentially risky. Yet most organizations are trying to make the transition on their own.

As the previous slides show, moving to become an SOA-enabled enterprise that can continually drive business process improvements is challenging and potentially risky. Yet most organizations are trying to make the transition on their own.

Have you used, or are you planning to use, a service provider to help develop and implement an SOA

framework to optimize business processes?

Have you used, or are you planning to use, a service provider to help develop and implement an SOA

framework to optimize business processes?

Yes22%

No40%

Don’t know38%

The State of

BPO

The State of

SOA

TechWeb The State of SOA August 2008 Page 19

RESPONDENT DEMOGRAPHICS

The State of Service-Oriented Architecture

The State of

BPO

The State of

SOA

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Respondent Demographics: Role in BPO Development

What is your role in the development, implementation, monitoring and modification of your company’s software design strategy with respect to

business process optimization?

What is your role in the development, implementation, monitoring and modification of your company’s software design strategy with respect to

business process optimization?

The State of

BPO

The State of

SOA

27%

14%

3%

7%

37%

5%

7%

One response allowed

TechWeb The State of SOA August 2008 Page 21

Which of the following best describes your job function?

Which of the following best describes your job function?

Respondent Demographics: Job Function

Don’t know38%

IT management21%

Executive IT management

(CIO, VP of IT) 10%Consultant

8%

IT staff20%

Executive corporate management (CEO, president, corp. VP)

3%General corp.

mgmt. 4%

General corporate staff2%

VP infrastructure/application

development 2%

Senior architect20%

Project manager10%

The State of

BPO

The State of

SOA

TechWeb The State of SOA August 2008 Page 22

Respondent Demographics: Company Size

How many employees are in your organization in total?

How many employees are in your organization in total?

The State of

BPO

The State of

SOA

Less than 10012%

100 to 49920%

500 to 9997%

1,000 to 4,99920%

5,000 or more41%

TechWeb The State of SOA August 2008 Page 23

Respondent Demographics: IndustryGovernment 12.7%IT vendors 9.8%Education 7.9%Healthcare and medical 7.3%Consulting and business services 6.7%Financial services/banking 6.4%Manufacturing and industrial (non-computer) 6.4%Insurance and HMOs 3.8%Financial services/insurance 3.2%Financial services/securities and investments 3.2%Retail and e-commerce 3.2%Telecommunications and ISPs 3.2%Nonprofit 2.5%Automotive 2.2%Consumer goods 2.2%Financial services/other 2.2%Media and entertainment 1.9%Electronics 1.6%Hospitality and travel 1.3%Logistics and transportation 1.3%Biotech, biomedical and pharmaceutical 1.0%Construction and engineering 1.0%Energy and utilities 1.0%Food and beverage 0.6%Utilities 0.6%Distribution 0.3%E-marketplace (portals or auction) 0.3%Metals and natural resources 0.3%Real estate 0.3%Other 5.6%

The State of

BPO

The State of

SOA