Doing business today is nearly impossible without the Internet. Eventually, we believe, the same will be true for SOA. Why such a bold comparison? In a word: flexibility. At a time when companies desperately need it, SOA opens an entirely new realm of business flexibility. Though SOA has profound technical advantages, it is ultimately about creating the means to innovate more rapidly – having the flexibility to introduce new products and services, enter or create new markets and revamp business processes… as soon as opportunities appear, or as soon as you happen to envision them. Like the Internet itself, SOA has the potential to significantly change how businesses collaborate and how entire industries are structured. And given the competitive forces propelling its adoption, the question is not whether SOA will become pervasive – but how soon. Reshaping the nature of competition in your industry
Because SOA's design philosophy enables entirely new ways for businesses to operate and collaborate, we anticipate that its adoption will cause shifts in the competitive landscape of virtually every industry. To test our assumption, we used a model from Harvard Business School Professor Michael Porter as a template for analyzing how SOA influences the competitive dynamics within industries (see Figure).  To ground our academic analysis, we studied 35 real-life implementation projects to better understand how SOA was actually impacting individual businesses and their respective industries. The experiences of these early adopters provide further evidence of SOA's game-changing potential – and clear signs that its adoption is well underway in many industries. We can see SOA's influence in each area of the model: Suppliers
Clearly, trading partners (and even government clients) wield tremendous influence when it comes to technology adoption. As we've seen with e-procurement and more recently with radio frequency identification (RFID) technologies, dominant players can put tremendous pressure on their partners to follow their lead or risk losing an important business relationship. There is every reason to believe the SOA story will unfold the same way. Buyers
SOA can sway customer expectations as well. As buyers grow accustomed to the streamlined, integrated solutions offered by more advanced SOA implementers, they will place similar demands on other businesses and industries. Indirectly, they'll vote for SOA with their purchases. The competition
The sting of SOA will probably be felt most in the competitive arena. Players with SOA experience, established infrastructure and a sizable inventory of services will be able to assemble new solutions faster and easier than those that have to build traditional point-to-point or custom-built interfaces between systems. SOA-based services can also stimulate competition by eliminating traditional barriers to entry. When "services" are locked inside proprietary software applications, the cost to replicate those functions can be prohibitive for a new market entrant. But when standards-based "services" are generally available, new players can access those capabilities just as easily as market leaders can. Conclusion
Instinctively, it might seem appropriate for business executives to ignore IT architectural debates, but SOA is one worth understanding. At its core, an SOA investment is not about buying information technology – it's about investing in business flexibility. Because SOA allows companies to design – and redesign – processes and business models with greater simplicity and speed, we believe it will fundamentally alter how businesses collaborate and compete. How can IBM help? - IT Strategy and Change: Help to define your strategy to include and exploit SOA and manage business change as a result.
- Application Services: The strategic context presented in this paper can be specifically applied in several of our service offerings:
- SOA Strategy & Transformation
- SOA Design, Development and Integration Services.
- Business Application Modernization
- Enterprise Architecture & Technology
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