Sidney Hill, Jr.: Vendors benefit from SOA just as much as users

Over the past several years, MBT has chronicled the ways in which manufacturing companies—large, small, and medium-size—are using service-oriented architecture (SOA) to create innovative new business processes.

Now we are starting to document an important side story: how SOAs are fueling consolidation in business software markets.

Senior Contributing Editors Tony Baer and Roberto Michel alluded to this phenomenon in recent reports. Baer, in writing about IBM's intent to acquire to business intelligence (BI) software supplier Cognos, noted that these two vendors had a history of collaborating on solutions that integrated components of the SOA-based Cognos 8 platform into IBM's WebSphere middleware stack.

The same week Baer's piece appeared in our Mid-Day Report e-newsletter, Michel was attending Automation Fair, an annual showcase of solutions offered by Rockwell Automation and its network of partners. The big story there was how a steady stream of acquisitions has allowed Rockwell—which has a long history of automating production processes for discrete and hybrid manufacturers—to assemble solutions that appeal to process-oriented manufacturers such as pharmaceutical companies. But the subplot to that story is how those solutions are being assembled: by plugging the newly acquired applications into an SOA developed by the Rockwell Software unit.

As Michel reported, this SOA also has been instrumental in several key Rockwell alliances, including one in which Rockwell has embedded data historian technology from OSIsoft into Rockwell's FactoryTalk suite of production management applications.

Enterprise software vendors are relying on SOA to support—and accelerate—acquisition strategies as well.

No company has made more acquisitions than Oracle, which gobbled up 41 companies over the past 48 months. At Oracle OpenWorld the second week of November, company President Charles Phillips said, “Since there really is no IPO market for enterprise software companies at the moment, we have become that IPO market.” At first I found these statements amusing. I changed my mind the next day, however, when I went from San Francisco—site of Oracle OpenWorld—to the East Bay city of Pleasanton to visit with Rix Kramlich, VP of worldwide marketing for Right Hemisphere.

Right Hemisphere's solution performs what most would consider a fairly simple function. It takes information from CAD systems and converts it into useful information for users of ERP and other business applications. Where it gets interesting is in the number of formats Right Hemisphere can convert this information into—more than 120, according to Kramlich.

Upon hearing that, I commented that building this system must have required some complex programming. “The product was seven years in development,” Kramlich responded.

When it takes that long to develop this type of application, it only makes sense that companies like Oracle and SAP would abandon long-standing policies of building all of their own products and start buying BI, product life-cycle management, and manufacturing performance management solutions.

I have to wonder, though, if these vendors would be as aggressive in acquiring other companies if they didn't have access to SOA technology to help shape all these disparate applications into coherent business solutions.