SOA saves, not bites, budgets

Integration takes up to 40% from IT budgets; SOA can reduce this bite.

Last week, I reported on AberdeenGroup's survey findings around SOA deployments and calculations for potential cost savings. The report was very informative, but the accompanying press release seemed to imply that SOA efforts would eat up about 40% of IT budgets, and was interpreted that way in some articles.

"But migrating to an SOA doesn’t come without a price, the survey also found. 'Redesigning business processes, high IT integration costs, and customization challenges are eating up 40% of the IT budget in integration expenditures,' said Peter S. Kastner, Vice President and Research Director for Enterprise Integration at Aberdeen and author of the report. 'SOA is broadly seen as a real technology step forward, with the largest companies, who have the biggest integration problems, leading the way.'"

SOA taking a 40% bite is huge, and would cause a lot of organizations to think twice about considering service-orienting anything. So I asked Peter Kastner, the study's author, if that 40% pertains more to pre-SOA integration costs or SOA itself.

Kastner clarified that integration represents 40% of pre-SOA IT budgets, but that those organizations adopting SOA methodologies can see a dramatic reduction in the bite integration takes out of their IT budgets.  For the "best-in-class" organizations, that already have some of these costs under control, there's a further reduction. "It looks to us like best-in-class organizations are reducing software maintenance costs from roughly 27% of IT budget to 12% -- a huge 15% of budget saving," Kastner pointed out.

The potential is huge for SOA when implemented properly. AberdeenGroup also issued a report in the beginning of the year that calculates that the world's largest companies can save a total of $53 billion in IT spending over the next five years if they implement SOA.

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