Services for hire: SOA as revenue generator

We've been arguing endlessly across and around the blogosphere and conference circuit about the ability or alleged inability to show ROI from service oriented architecture-related projects. Never mind if SOA helps business revenues, how about breaking even?

We've been arguing endlessly across and around the blogosphere and conference circuit about the ability or alleged inability to show ROI from service oriented architecture-related projects. Never mind if SOA helps business revenues, how about breaking even?

But in the age of service orientation, one thing is becoming more evident, which I've said before at this blogsite: we (and our organizations) are becoming both creators and consumers of services, and therefore, service creation is a revenue opportunity for both small and large companies.

So, software vendors create and consume services, and financial firms create and consume services, media companies create and consume services, and consumer goods manufacturers create and consume services. Be that the case, why not provide services you create to external as well as internal customers, and generate new revenue? Maybe SOA can not only recoup its initial investment, but help provide a new source of business in its own right.

Loraine Lawson hit the nail on the head when she pointed out that if vendors can make money from cloud-based services, why can't everyone else?

"By giving companies an edge in adopting and deploying services from the cloud as a means of saving money and possibly making money. If you've already service-enabled business processes, it should theoretically be easier to connect those services to cloud offerings. That's great for cost savings, but, as I've pointed out before, why can't companies use this for generating revenue? If Microsoft can deploy and sell services via the cloud, why not you?"

Why not? I've seen plenty of examples in the financial services industry where one bank invests the money and creates a system, and then makes it available to others to recoup the initial costs.

Brenda Michelson also has been exploring this theme from a couple of different directions, noting that "eventually, at some level, everyone is going to be a provider to the cloud.  The offering might be as simple as an information or business service, or it might be an advanced scientific algorithm service that requires dedicated data storage and compute cycles."

However, based on her discussions with an SOA Executive Summit roundtable, Brenda observes that organizations don't see themselves getting into the IT services business in a big way, especially if it strays too far from their core business. Nonetheless, "if a potential service offering supports the core business without risking competitive advantage or intellectual property, then sure, creating a service offering, to support an existing business relationship, or to generate new revenue, will be pursued."

And, as Brenda observed in another post, there is a lot of overlap occurring between IT and non-IT businesses. For example, Walmart said it will start selling electronic medical records software, installation and maintenance, to single physicians and medical practices. At the same time, IBM is getting into the water management business.

So perhaps we will see more of this overlap on a strategic level, as well as at the services level. There are plenty of organizations with millions of dollars of IT assets and assemblies of talent. Why not start thinking outside the box?

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