SOAs to spawn $17bn code market

Tom Sanders | 22 May 2007

In house code sharing will loose out to superior outside code.

Third party 'services' will evolve into a $17b market by 2013, predicts Susan Eustis, president of Wintergreen Research, an independent research group.

Services in an SOA context are building blocks that offer a specific functionality. A group of functions makes up an application: an ecommerce store for instance will combine a shopping cart with invoicing and checkout functionalities.

IBM currently offers 3,600 free and for fee services through its SOA Business Catalog. At the IBM Impact 2007 conference in Orlando, the company revealed that it will expand the marketplace to 10,000 services by the end of the year.

Salesforce on Monday also unveiled a hosted SOA platform that lets developers to access services over the internet. The company also will allow companies to sell services on its Apex software market place.

SOAs currently are mostly used for internal development projects, allowing companies to re-use code between departments and applications. But Eustis estimates that more than 65 per cent of the SOA projects have failed.

SOAs raise the quality requirements on code, and software that has been developed internally rarely meet those demands, argued Eustis. This prompts early SOA adopters to go look for code sources outside their company.

"You can't go to say [online stock broker Charles] Schwab and say: 'We're going to identify reusable code in our existing asset base.' You're much better off to take reusable components of code that have already been reused and start modifying those," said Eustis.

"Efficient use of reusable code will come from companies like IBM and Microsoft, that already have highly developed set of reusable code that has been reused hundreds if not thousands of times."

Especially IBM has much experience with reusing code because it manages thousands of internally developed applications through IBM Global Services' outsourcing deals.

Eustis projects that ultimately there will be a market for millions of services.

The market for services will surpass sales of SOA middleware by a margin. Companies by 2013 will spend only $4.5bn on software that runs and manages SOAs, up from $1.21bn that was spent in 2006, the firm predicted. Vendors in that space however will be able to generate additional revenues with certification services that guarantee buyers that services will work together.