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Are enterprise clouds the new SOA?


Have you heard of this cool new concept in enterprise computing that will revolutionize the way your organization’s IT works? It will meet the technological needs of your business of course, but in addition to that, it will save you tons of money. By pooling and refactoring your infrastructure resources, it will save you the busy work of building out your computing infrastructure and let you concentrate on what you do best in your business—adding value. If your eyes are glazing over, I’ll stop right there. Maybe you think I am talking about cloud computing, but practically the same arguments were made in support of service-oriented architectures half a dozen years ago.

I should reveal my cards right away in that I don’t think cloud computing in the enterprise will be an albatross like SOA. Cloud computing is not encumbered by many of the same issues that hamstrung SOA rollouts in the enterprise. Moreover, the incentives seem to be stronger because the technical and business benefits of cloud computing appear to have been articulated more clearly. I am getting ahead of myself though. As a member of the tech investor and industry analyst circles over the past year, seeing the innovation ecosystem emerge around cloud computing awakens an uncomfortable series of flashbacks in me.

For one, the excessive emphasis on an elaborate taxonomy for what is essentially an ambitious, yet nebulous concept. SOA’s technical promise did sound alluring, but the effort of building a top down, exhaustive taxonomy quickly overtook the effort of meaningfully proving these ideas out in the field. By the time it was apparent that enterprise SOA efforts were lagging behind, way too much intellectual and emotional effort had been invested into taxonomizing to throw it all away. Instead, we were subjected to efforts like the WS-* standards and a bevy of startups in frightfully tiny niches like SOA governance when real world implementations were seriously lagging behind. Those efforts weren’t entirely in vain given how they have found their way into some SOA-related products from large software vendors; however, at least some of the pure plays that mushroomed around SOA had their origins in the extensive taxonomy effort. What does this mean for cloud computing startups looking to catch the eye of technology investors? Rather than appearing as a me-too startup in one corner of a vast taxonomy with a solution looking a problem, create your own market segment where your customers can speak powerfully to the value you add to their business.

Another flashback to SOA comes from the oft-cited cultural change that must occur if cloud computing is to succeed in the enterprise. In addition to the significant technical refactoring that is part of any SOA rollout, SOA advocates emphasized the “human side of service-orientation”, i.e. redrawn spheres of influence and ways of working that an SOA implementation would also imply. To date, enterprise efforts within the cloud computing phenomenon have largely been one-offs or short term cloudbursting implementations driven largely by small, technology-savvy teams. Sustainably running large portions of a business in the cloud, however, requires new ways of looking at resource consumption and allocation, both of which require significant involvement from accounting, finance, IT and several other key business stakeholders. Startups pitching a cloud management message to enterprise customers and VCs: keep in mind that customers will appreciate some indication of the requisite cultural and organizational changes in addition to your technology and product differentiators as they perform their cost-benefit analysis.

The cloud computing phenomenon shows the classic signs of an early market. Most enterprises view a cloud computing provider as little more than a managed hosting hosting provider with a less restrictive contract. But we believe the promise of the cloud to be much more than just a new delivery mechanism for enterprise computing. The startups that will be most successful in this regard will be those that bring about fundamentally new kinds of applications and services by leveraging the cloud. Perhaps a new application development model that obviates the black magic that goes into application deployment? Or perhaps a new kinds of analytical applications enabled by the sea of datasets available on EC2? We don’t claim to have all the answers but if you are an entrepreneur who does, we’d love to speak with you.

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