SOA Insights analysts delve into SOA/Web 2.0 mashups and the Oracle-Hyperion deal

What’s going to happen is that the users are going to do this through a brokerage -- guys like Google. I don’t think Google is going to take a whole lot of money. They're going to take the normal pennies per transaction, and you will see millionaires that are made in a few months -- people who are able to send up killer services that Google and guys like StrikeIron are able to broker out to those who are setting up SOAs. Then, suddenly, they are going to find themselves a hit, very much like we’re seeing the Web 2.0 hits today. ... We have Google AdWords and AdSense. So, soon we should have "ServicesSense"?

Read a full transcript of the discussion.

How do SOA and Web 2.0 services come together? Are we entering an era where a variety of business services from a spectrum of sources contribute to and perhaps dominate new business process aggregation? If so, won't that require a level of governance to protect enterprises from flighty Web-based services, while still allowing a thousand ideas for business mashups to blossom?

And wouldn't trusted providers of Web services -- Amazon, Google, Salesforce.com, Yahoo!, RealNetworks, Windows Live, and eBay/PayPal, et al -- constitute a form of mashup governance by making their offerings mission critical, in effect engaging enterprises based on trust, compelling value, customer service, and ease of integration and use?

Join noted IT analysts Steve Garone, Joe McKendrick, Tony Baer, and Jim Kobielus, as well as SOA consultant guest Dave Linthicum of Linthicum Group, for a discussion of these topics, hosted and moderated by me, Dana Gardner.

Our panel discussion also parses the ramifications of the recent proposed $3.3 billion deal for Oracle to acquire Hyperion, and digs into what the combined entity means for Business Intelligence (BI) and Corporate Performance Management (CPM). Our analysts and guests have some unconventional and startling conclusions, as well as thoughtful insights.

Here are some excerpts:

On SOA, Web 2.0 Business Services and Mashup Governance

... Mashups and SOA are coming together... . As people are becoming very active in creating these ad-hoc applications within the enterprise, using their core systems as well as things like Google Maps and the Google APIs, some of the things that are being sent up by Yahoo!, Salesforce.com, and all these other things that are mashable. There's a vacuum and a need to create a governance infrastructure to not only monitor-track, but also learn to use them as a legitimate resource within the enterprise.
 
Right now, there doesn’t seem to be a lot of thinking or products in that space. The mashup seems to be very much like a Wild West, almost like rapid application development (RAD) was 15 years ago. As people are mashing these things up, the SOA guys, the enterprise architecture guys within these organizations, are coming behind them and trying to figure out how to control it.

Ultimately these things can become legitimate and very valuable applications within the enterprise. I have a client, for example, that has done a really good job in mashing up their existing sales tracking system, inventory control system, and also delivery system with the Google Maps API. Of course everybody and their brother uses that as a mashup example, but it's extremely valuable.

We are able to not only provide maps to do the best routing for delivery, but also Google Maps right now has traffic reports. So, they can give these to the truck drivers and delivery agents at beginning of the day, and productivity has gone up 25 percent. Over a year, that is going to save them more than $1.5 million. And, that’s just a simple mashup that was done in a week by a junior developer there. Now, they are trying to legitimize that and put it back into their SOA project, as well as other external API’s. They are in there trying to figure it out.

... As we are building these SOAs within these enterprises today, we have the added value of being able to see these remote services, deal with these remote APIs, and bring that value into the organization -- and that’s typically free stuff. So, we are using applications that we are gaining access to, either through a subscription basis in the case of Salesforce.com -- and they are, by the way, hugely into the mashups that are coming down the pipe -- free services that we are getting from Google, or even services that cost very little.
 
Putting those together with the existing enterprise systems breathes new life into them, and we can basically do a lot of things faster and get applications up and running much faster than we could in the past. Ultimately, there is a tremendous amount of value for people who are using the applications within these environments. Typically, it’s the mid-market or the mid-sized companies that are doing this. ... Or even departments in larger companies that don’t need to go through IT to do this.

You really need a rudimentary notion of governance when you deal with any kind of application or service that works within the organization ...  (It's) about a technical infrastructure to monitor-control the use of services. Not only is it about control, but it is about productivity. I can find services. I can leverage services, and they are managed and controlled on my behalf. So, I know I am not using something that’s going to hurt me. The same thing needs to occur within the mashup environment.

The whole notion of mashups is half-way to anarchy, as it were, creative anarchy. In other words, empowering end-users, subject-matter experts, or those who simply have a great idea. They typically slap together something from found resources, both internal and external, and provision it out so that others can use it -- the creative synthesis.
 
This implies that governance in the command-and-control sense of the term might strangle the loosey-goosey that laid the golden egg. So, there is that danger of over-structuring the design-time side of mashups to the point where it becomes yet another professional discipline that needs to be rigidly controlled. You want to encourage creativity, but you don’t want the mashers to color too far outside the lines.

... Your existing policies and access privileges, your federated ID management brought up into a policy level -- that will all play into this and it could help mitigate this concern around the right balance. ... I was thinking about the adage that nobody was fired for using IBM, which was a common saying not that long ago. What if we were to take that same mentality and apply it here -- that if you're going to do mashups, make sure they are Windows Live mashups, or Google mashup services, or maybe Salesforce.com.

It strikes me that this is a slippery slope, if people start using mashups. That includes the more defined and traditional developer using it through governance and vetting it properly with command and control, as well as across a spectrum of project-level, third-party developers, and even into department-level folks who are not developers per se. The slippery slope is that, suddenly more of the functionality of what we consider an application would be coming through these mashups and services, and perhaps increasingly from outside the organization.
 
Therefore, the people who are providing the current set of internal services and/or traditional application functionality need to be thinking, "Shouldn’t I be out there on the wire with a trusted set?" We're already seeing Microsoft move in this direction with its Windows Live. We're seeing Google now putting packaging around business-level functionality for services. Salesforce.com is building an ecology, not only of its own services, but creating the opportunity for many others to get involved -- you could call them SaaS ISV’s.

... (Are) these sets of players, with the possible exception of Google and Salesforce.com, going to be interested in having this occur sooner? No, they would rather have it come later, because their on-premises, licensed software businesses are far more profitable, and it gives them a more entrenched position with the client and the account than these mashups ... which can be switched in or out quite easily, and are either free or monetized through advertising or in a subscription fee format that is still not nearly as profitable for them in the long run as an on-premises, licensed approach.

What’s going to happen is that the users are going to do this through a brokerage -- guys like Google. I don’t think Google is going to take a whole lot of money. They're going to take the normal pennies per transaction, and you will see millionaires that are made in a few months -- people who are able to send up killer services that Google and guys like StrikeIron are able to broker out to those who are setting up SOAs. Then, suddenly, they are going to find themselves a hit, very much like we’re seeing the Web 2.0 hits today. ... We have Google AdWords and AdSense. So, soon we should have "ServicesSense"?
On the Oracle-Hyperion Deal

[Oracle Chairman and CEO] Larry Ellison has been very willing in the past to grab huge amounts of market share by buying direct competitors like PeopleSoft, Siebel, and so forth, and managing multiple competing brands under the same umbrella -- and he is doing it here. A lot of the announcement from Oracle regarding this acquisition glossed over the fact that there are huge overlaps between Oracle’s existing product lines and Hyperion’s in pretty much every category, including the core area that Hyperion is best known for.

Hyperion is a big business intelligence (BI) vendor as well, and Oracle has just released an upgrade to its BI suite. You can go down the line. They compete in master data management (MDM) and data integration, and so forth. The thing that Oracle is buying here first and foremost is market share to keep on catapulting itself up into one of the unchallenged best-of-breed players in business intelligence, CPM and so forth.

It’s a great move for Oracle, and it definitely was an inevitable move. There will be continuing consolidation between the best-of-breed, pure-play data management players, such as Hyperion and a few others in this space, which are Business Objects and Cognos. They will increasingly be acquired by the leading SOA vendors.

... This is less about database and more about middleware and Fusion and building up that software stack. Oracle has clearly got an eye on doing that. It’s really about their bigger picture of taking what Oracle calls Fusion middleware out beyond just middleware to the applications themselves, and essentially creating an entire integrated stack of software.

Analytics is the necessary icing on the cake. All the other pieces tell you what you are doing, and the classic question of analytics tells you why. A lot of folks look at this as an extension to the database business. I see this as an extension of the applications business.

[The deal] puts some pressure on SAP. I wouldn’t be surprised to see them make the play for one or the other two big remaining ones. I also expect IBM to play in there, because even though IBM says it’s not in the apps business, the fact is that they do have products like master data management. What's really ironic about all this is that years ago, IBM and Hyperion had actually had a very close relationship, and it was bordering almost on acquisition. I'm surprised that IBM actually never went the last mile and acquired them. It would make sense for them to make a move with one of the other players today.

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