The incredible shrinking SOA vendor pool: good or bad?

Dave Linthicum, who has been involved in plenty of IT vendor acquisitions, has been keeping tabs on the churning SOA vendor space, and estimates that anywhere between three to four dozen SOA specialty vendors have been acquired in just in the last couple of years.

Isn't that a good thing? For the investors in these companies, yes. But for SOA innovation, no, Dave says. In fact, we may be losing our competitive edge in SOA as a result.

Enterprises can't forever rely on startups to piece together SOA strategies. But larger vendors aren't known for innovation and flexibility

"The number of organizations out there that are actually doing service-oriented architecture are diminishing," he said in a recent podcast. "This is not due to lack of interest in the space, or a failure of the technology... the larger players out there, the big stack guys, are actually purchasing SOA companies and taking them out of the market." (Dave also posted a blog piece on the same topic here.)

Dave's observations were triggered by Rich Seeley's latest article in TechTarget, which also explored the question of the incredible shrinking SOA market. In the article, Forrester's Randy Heffner believes that having too many entrepreneurial ventures around make it difficult for end-user customers to establish coherent enterprise strategies.

One-off bits of software from small vendors, innovative as they may be, may hamper SOA adoption in Heffner's view. "It forces leading shops to have to do a bunch of software infrastructure integration on their own," he said. "What that does is restrict the market for adoption of new technologies. Though they (small vendors) may be innovative and interesting and add something to the mix, their value is lessened by fact that they are a one-off. An enterprise wants to get a coherent SOA platform."

Consolidation through mergers and acquisition may be a plus if the large vendor integrates the acquired technology into their platform, thus saving developers from having to work on infrastructure integration before they can tackle application integration.

Dave Linthicum points out that larger vendors, of course, don't like to take risks, and are slow to adapt. Only small startups are in a position to take risks with new technologies and approaches. "Most of the innovation, the interesting stuff, takes place among the startup companies," Dave says. This is being lost as larger vendors take over, and absorb the smaller vendor's products and people into the bellies of their operations. 

Investors in these startups prefer the acquisition exit option because regulations make it much more difficult to take a company public, Dave says.

I think another factor is that a lot of the entrepreneurial excitement and energy that is part of emerging markets seems to be directed at the Web 2.0 space these days -- not SOA. Many startups are gearing their innovations toward Software as a Service, mashups, and collaborative environments. (Witness this week's Web 2.0 conference.)