Embracing SOA

They aren’t as far along as larger businesses, but mid-market companies are adopting service-oriented architectures and Web services, and making them the bedrock of their information systems environments. Mid-market companies, like their larger counterparts, seek integration, process improvement and lower costs. That’s driving a wave of upgrades; we found eight kinds of applications that are now being or will soon be developed, rebuilt or upgraded by at least one-third of small and midsize businesses to take advantage of Web services and SOA. Still, there is one significant difference in motivation: Mid-market companies are more interested in using service architectures to move off legacy systems than to retain them. That suggests these companies hope service architectures modernize their systems and help them leverage the natural advantage of smaller companies: flexibility and agility. Careful adoption of these technologies could help mid-market companies compete more effectively with larger rivals.

Finding 1

SMBs Commit to Web Services and SOA

Small and midsize businesses use SOA and Web services to move off legacy systems. Mid-market companies have been slower than larger companies to adopt service architectures, but they aren’t far behind. And by “adopt,” we don’t mean dabble. Most have made Web services and SOA part of their IT architectures. Earlier CIO Insight research found that Web services and SOA let companies move away from legacy enterprise applications; this month’s survey confirms this is especially true for mid-market companies, while larger companies are more likely to use these technologies to extend the lives of their legacy systems.

Finding 2

Web Services Spawn Wave of Upgrades

Back-office applications are among popular targets. Many midsize firms have upgraded customer service, business process, customer relationship management and analytic applications to exploit Web services and SOA. However, mid-market firms are more likely than larger ones to upgrade their enerprise resource planning and human resources applications. These upgrades aren’t cheap: Our February 2007 Spending Survey found ERP spending rose 6.3 percent among mid-market users. Upgrade costs help explain why Web services and SOA don’t meet their cost-cutting expectations.

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