SOA Services Poised To Take Off

After a few false starts in 2004 and 2005, the service-oriented architecture (SOA) services market appears poised to experience significant growth, according to a new report by IDC.

As it does, it will have a larger affect on such IT spend categories as systems integration, consulting, application management -- and, eventually, the outsourcing of the management of these applications as they grow too complex to handle in-house.

Furthermore, as more companies experiment with SOA technology, there is likely to be a spillover effect among many software categories, including CRM and supply chain applications.

Fit and Starts

"The advantage of SOA is that a company can easily integrate data from multiple sources, including within the enterprise and among suppliers," Marianne Hedin, program manager for IDC's Worldwide Services and Services-Oriented Architecture, told CRM Buyer.

Worldwide spending on SOA-based external services will reach US$8.6 billion in 2006 -- a 138 percent increase from $3.6 billion in 2005, according to IDC forecasts. By 2010, global SOA-based services spending will reach $33.8 billion, the firm predicts.

To be sure, the market has been hearing about the benefits of an SOA-based architecture for some time. Adoption has been slower than expected, Hedin noted. That is partly because the initial buzz around the technology was generated from this community.

This time around, it is different, she said. "Now we are seeing genuine pull from the buy side. Companies are getting on board and trying out small SOA projects internally. They see the business benefits and start talking about them to their peers. The word is spreading."

Dabbling in SOA

Most of these projects have been relatively straightforward. "A company might have a problem with a payment or procurement process, for example," Hedin said.

Citing another example, she pointed to corporate dashboards that use SOA architecture to bring together disparate data from the enterprise.

"Senior managers want more timely information on a daily basis. Companies are creating dashboards that provide this information in real-time," Hedin noted.

Systems Integrators to Benefit

The major players in the SOA services space include IBM (NYSE: IBM), Accenture, HP (NYSE: HPQ), Cap Gemini and CSC.

Systems integration will be the first service category to experience a surge in demand, followed by consulting services.

Eventually, though, other categories -- including application management and outsourcing -- will experience growth. This development will likely be the last to unfold, Hedin predicts, as more SOAs come online.

"They can be incredibly complex," she remarked, "and firms are not going to want to handle them in-house after a certain point."