At last, a formula for estimating SOA costs

Finally, SOA costs can be boiled down to a precise formula.

Is your SOA turning into $OA? The biggest risk is pouring lots of budget into SOA without knowing if you are spending more than the industry average.

The BEA survey reported in yesterday's post found that more than half of large enterprises ($1 billion or more in revenues) have already spent about a million dollars on their SOA efforts. At least 40 percent expect to spend a million more just over the next 12 months. Interestingly, in most cases, these companies only have two or three SOA projects going at this time.

A million dollars for a couple of SOA projects -- wow. That seems kind of high, and beyond the reach of most organizations. I don't think most managers can go to management requesting a million dollars for a few SOA projects. But it's not healthy to estimate the project costs too low, either.

How can you go about figuring out how much an SOA project will really cost you? Dave Linthicum recently posted some guidelines on estimating the cost of a service-oriented architecture project.

Dave offers the following formula:

Cost of SOA = (Cost of Data Complexity + Cost of Service Complexity + Cost of Process Complexity + Enabling Technology Solution) 

How do you measure the cost of complexity? Here's how Dave says the calculation is done, for example, to arrive at the first variable, the cost of data complexity:

Cost of Data Complexity = (((Number of Data Elements) x Complexity of the Data Storage Technology) x Labor Units))

  • The "Number of Data Elements" is the number of semantics you're tracking in your domain, new or derived.
  • Express the "Complexity of the Data Storage Technology" as a decimal between 0 and 1. (For instance, Relational is a .3, Object-Oriented is a .6, and ISAM is a .8.)
  • "Labor Unit" is the amount of money it takes to understand and refine one data element. Dave said this could equal $100, for example.

As an example, you could arrive at a solution such as this:

Cost of Data Complexity = (((3,000) x .5) x $100) This equals $150,000 for this portion of your SOA costs.

The next step is to apply the same formulas to determine the costs of other variables, including Cost of Service Complexity, Cost of Process Complexity, and Enabling Technology Solution (which should be straightforward).

Once you arrive at your Cost of SOA, Dave advises figuring in "10 to 20 percent variations in cost for the simple reason that we've not walked down this road before."