Rethinking your Business around SOA


I think companies are starting to see the amazing impact SOA can have on their overall business value proposition.

Think about Amazon.com. Most people would say that Amazon.com is a site to buy lots of products. In their mind,  Amazon.com's website and Amazon.com the company are the same. But, Amazon doesn't appear to see it that way....

As an Amazon outsider (which means I'm hypothesizing to make a point), I bet it went something like this:

Amazon.com, the beginning:
    \* Business Unit: Leverage this thing called the Internet and create a website to sell books to the world. Make tons of money. Build an easy-to-use website so people of all ages can buy books. Track their buying patterns and let them rate the books so others can see.

    \* IT: Ok, we can build an awesome, intuitive web site and a commerce engine to support it.

So, basically, Amazon.com the website and Amazon.com the commerce engine were one. In other words, the commerce engine needed to support one channel; the Amazon.com website.

But, as time went on, the smart people at Amazon.com started recognizing the web services potential. They provided REST and SOAP apis so developers/companies could access their services outside of the Amazon.com website. Developers liked this and were amazed at the simplicity and power in being able to access Amazon.com's powerful commerce engine. But, there was something else happening.

A few years ago I did a search for a product on Amazon.com and it showed me the same product from partners at a lower cost than Amazon.com was offering. I thought I found a bug and tried it again. Same thing happened. Amazon.com was revealing partner products at lower prices on the same page as their higher price. From the periphery, this made little business sense. But, thinking about it, it become genius.

It looked like Amazon.com had begun treating Amazon.com the website and its partners as close equivalents. But,  more importantly, if Amazon.com's  commerce engine was actually separated  from Amazon.com the website, then it sounds like their business model changes from selling products on Amazon.com, to generating revenue from their commerce engine. And this is my point and the value SOA can bring to radically (and rapidly) change a business. You can already see this happening at eBay and Google.

Think about this. What if AOL didn't have a web presence anymore, but offered (probably) the world's largest digital asset management system (picture, video, music, etc) as services so others could build business on them. Sounds like a SOA opportunity to me. Why didn't AOL build the worlds best digital picture SOA for others to build a business. If they had, Snapfish, Ofoto (now Kodak Gallery), etc could have built their business on it and AOL would have reaped big rewards.

Is WebEx a web-based meeting company or do they provide a web-based meeting infrastructure. WebEx just opened their APIs  as web services and already companies are sprouting up which run on the WebEx services. Wait until ISVs start picking up on the fact that everyone needs web-based communication within their applications. Are they going to build their own or access WebEx's services. In the future, I predict WebEx makes more money on it's SOA communication services than the actual WebEx brand offering.

I want to finish up with a graphic of what I think will be the way we think about how SOA can open up new and amazing business opportunities. Not just for existing companies, but new companies which build on these services. I like to call this new type of company, the Composite Company. Imagine the opportunity when companies such as AOL, Google, eBay, etc all open up their services and have a uniform identity scheme. The types of Composite Companies who aggregate and provide a service on top of these rich services will provide services not available today.  It's mind-boggling to think what will happen when businesses provide SOA services as their core competency and Composite Companies begin to arrive.

CompositeCompany



Comments:

I'm having a hard time grasping SOA. What is SOA replacing? How did we manage before SOA? Why all of a sudden the need for SOA? Thank you. Red8

Posted by Redea Maru on gusht 16, 2005 at 08:02 PD EDT #

Excellent blog. Some critical items that still need to be worked out are how can performance be achieved with Web Services Infrastructure? Messaging is quite important for Web Services, but it can involve more infrastructure on the Client side, and performance impact. What are your thoughts on improving Performance of Web Services? - yogi

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Posted by Mary Anne Martin on janar 08, 2006 at 12:22 MD EST #

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