SOA - Bridging the gap between Services and Products

Every marketer will agree that there is a service element in almost every Product and every Service delivery needs to have standard processes to ensure reliability and predictability which brings it closer to being a product. When it comes to software, differentiation between product and services is disappearing in the way they are created and offered and not just sold. Google is a product which delivers Search as a service, SalesForce.com delivers enterprise software as a hosted service. When customers purchase SAP and Oracle, they need IT service companies to implement and customize the product for specific requirements of their enterprise. Large enterprise software has been criticized for being too rigid and not flexible enough to adapt to a corporate specific need. For example, Indian tax structure is probably unique and requires specific handling, any implementation of enterprise software needs to take care of this aspect.

Service Oriented Architecture is about to the change the world of software - more from the inside and less from the outside. In the short run, Customer's customer may not see the change while the software changes from within. However, it might mean lower revenue for IT service companies and higher share for product companies like SAP, Oracle. By standardizing on web-services protocol for product integration, customers are trying to bring in a plug-and-play model to enterprise software. Once SAP and Oracle are also written using SOA, it should be possible to remove components of SAP and replace them with Microsoft (for example) if the customer likes that piece from Microsoft. This will free enterprises from lock-in that SAP or Oracle enjoy in terms of IT Infrastructure.

A large part of IT expense is wasted on rip and replace - removing a piece of software which has outlived its existence and needs. If all products are written using SOA, duplicate components can be removed/disabled and a real plug-and-play of software components can happen.

SOA is also likely to accelerate the trend of commoditization of software and will create opportunities for new players to enter into enterprise product space. Each organization will compete with another at component level and a smaller company providing a smaller piece can also find a place in the IT infrastructure. In my view, Indian IT Service companies should not miss this opportunity to move into the software product space.