There’s been a hysteria of doom and gloom lately over the state of the economy. While I believe the economy is very resilient and has weathered storms worse than the current situation, it’s only natural that we see upturns and downturns in the business cycle.
The 2008 outlook for SOA is bullish regardless of the economy, but priorities could shift
SOA, in its current incarnation, has only been around during a time of upward economic growth; what happens if things get rocky? Long Dong
asks a good question that needs be asked in an environment where organizations may tightening budgets a little more than their usual degree of tightness:
What does the ensuing (or on-going) economic downturn mean for SOA in 2008? Will the economic downturn and associated budget cutbacks drive organizations to, or away from, SOA in 2008?”
Ultimately, economic conditions can drive or ditch organizational initiatives despite anyone’s best efforts. The state of the economy will shape both vendor messaging and SOA initiatives. The executives that make the decisions about SOA purchases and resources will be viewing those decisions through the lens of the economy. Those selling or advocating SOA would need to adjust their messages as well.
Brenda put the question of SOA and the economy to SOA Consortium members, and got some very interesting responses. Overall, most believed that SOA efforts will press on, especially if SOA is closely tied to business value. I like the way one industry practice leader put it:
In a “downturn, people will have to be more creative, and will turn towards SOA.”
For those in organizations not inclined to encourage creativity, then keeping things close to the business as possible is the best bet for moving SOA forward. For example, as one of Brenda’s panelists point out, businesses will be looking to export markets for new growth. “Businesses will be looking at emerging and overseas markets to diversify and respond to the dollar bottoming out – manufacturing and portfolio investments. That type of business change is ripe for the development of a SOA approach.”
Another observed that regardless of overall economic conditions, businesses will still keep investing in new approaches, including social networking or Web 2.0 — and SOA is part of this. “Enterprises are beginning a rush to Web 2.0 and social networks, similar to the e-commerce rush. With the growth of Web 2.0/social networks (Google, Facebook, Yahoo!), enterprises, especially in consumer markets, will need to catch up. Both of these will result in the implementation of SOA. SOA is the backend.”
So the outlook for SOA for 2008 is quite bullish, no matter how rocky the economy gets. But still, the way SOA is sold to the organization and implemented may shift with the currents.
I also asked the question about SOA and the economy in a
post back in November, and noted that SOA can be positioned to deliver in good times and bad.
If the economy were to soften, and IT budgets were reigned in even more than they are, it would mean major purchases would be forestalled or canceled. We saw this during the downturn of 2001, with pullbacks from CRM, supply chain management, and other major projects. This time around, if things got tight, companies would likely hold off on major middleware migrations, such as WebSphere, WebLogic, Netweaver, or Oracle Fusion. The impetus would go to open-source, commodity, or perhaps even in-the-cloud offerings.
The thrust of SOA in this kind of environment would need to emphasize cost-cutting and efficiency gained through reuse, sharing and standardized interfaces that cut systems integration time.
Overstretched IT staffs, of course, would not be receiving much additional help if there’s a hiring freeze in place. This could postpone SOA, since it will be all hands on deck just to keep things running, versus committing staff to major transformational efforts.
However, it could be argued that the availability of common, shareable services through SOA makes it less necessary to maintain redundant IT staffs across business units. Of course, in this kind of environment, SOA may also be employed as a
euphemism for “downsizing,” just as business process re-engineering developed a bad name in times past.
So the jury’s out on what impact SOA will have, or if it will be impacted. And for that matter, the jury’s still out on what this year’s economy will bring. But it’s always a good thing to keep projects focused on the business.