Many of us in the IT industry have been excited about SOA as a positive, disruptive innovation for quite a few years now. It didn’t take long for those who were early adopters (and who suffered the wounds and bear the scars!) to extend the service oriented concept to enable a Service Oriented Enterprise (SOE).  “Services” in the SOE were primarily internal – HR, purchasing, facilities management — and the benefit of thinking of the enterprise as a SOE was that it facilitated more effective business-to-IT alignment.

Now, McKinsey & Company has published their Ten Tech-enabled Business Trends to Watch:

Trend 1: Distributed cocreation moves into the mainstream
Trend 2: Making the network the organization
Trend 3: Collaboration at scale
Trend 4: The growing ‘Internet of Things’
Trend 5: Experimentation and big data
Trend 6: Wiring for a sustainable world
Trend 7: Imagining anything as a service
Trend 8: The age of the multisided business model
Trend 9: Innovating from the bottom of the pyramid
Trend 10: Producing public good on the grid

One of those trends— # 7: Imagining anything-as-a-service—caught my attention because it illustrates just how “disruptive” the concept of discrete services (SOA) has become and how the SOE has enabled new business models and opportunities for growth.

In this article in the McKinsey Quarterly, the authors point out that the SOE strategy is being extended to an ever-widening range of business services – where the consumer of the service pays only for what they need or use, and where new revenue opportunities are realized by re-purposing existing services and assets.

Most of us are familiar with SaaS (Software as a Service) offerings like Google Apps, SalesForce, and dozens of others. But a rapidly increasing trend is the availability of non-IT “services” including buying transportation by the hour (ZipCar), instead of buying a car. More and more companies are creating and marketing new services based on business capabilities they originally developed for their own purposes. They’re generating new sources of revenue from components of their internal corporate value chains – McKinsey dubbed this strategy “unbundled production”.

This disruptive view of assets and of physical and intellectual capital creates new opportunities for arrays of high-value service offerings – new opportunities for many businesses to evolve to a new level of Service Oriented Enterprise and to adopt a Service Oriented Business Model (SOBM).

I’m going to talk more about this business trend on the Strategic IT Architecture site and about how we as IT professionals can provide a tremendous value-added service to our companies. We’re well positioned to enable our enterprise to leverage a SOBM whenever it offers opportunity, by applying the practices we’ve honed while implementing SOA.

I’ve come to the conclusion that it’s all of the above.

 SOA is an architecture paradigm and a set of principles to guide service-based applications, platforms, and even enterprises (SOE).  Cloud Computing is a computing platform paradigm that consolidates physical services into virtual shared services (infrastructure).  They don’t conflict or compete.  And they don’t enable each other.

SOA and Clouds Complement Each Other

They can, however, complement each other to create a whole that’s greater than the parts.

The confusion continues, however, and has grown to be a major topic of debate.  There are on-going discussions about the relationship between Cloud and SOA – claims that one requires the other; suppositions that SOA is dead because Cloud is the new service platform; analysis of the criteria that would determine if a business should adopt cloud or SOA.

For me, it became a serious issue recently when I was tasked by a client to address the question. I was asked to clarify the two paradigms’ value propositions, create a vision for how they can be leveraged together to create a service platform, and develop a roadmap to get there.

As an outgrowth of that initiative, I’ve started a series of posts on StrategicITArchitecture.com. My thesis is that Cloud and SOA can be combined to create the Ultimate Enterprise Service Platform. The series will frame the issues and present a set of recommendations and framework for developing a roadmap.

Check it out, if you’re interested, and please comment if you disagree, agree, or have suggestions.  You can also take a look at a scaled-down version of a Cloud/SOA presentation that I prepared for a client.

Of course, a robust virtualized platform is the foundation for virtually (cool pun!) all Cloud Computing – public clouds like Amazon and Google, or private corporate Clouds.

One really significant aspect of virtualization is the contribution that a virtualized IT platform makes to “Evergreen IT” – a term coined, I believe, by PriceWaterhouseCoopers. In addition to reducing the number of physical servers, which of course reduces electrical consumption and heat generation (less air conditioning), most Hypervisor systems can be configured to automatically shut down servers that aren’t needed during periods when less capacity is required.

During a recent lunch with a client’s VMWare representatives, I was treated to a good explanation of the latest green-IT features offered by their suite of products. Although I haven’t put them to the test, yet, it sounds pretty impressive – e.g., claims of as much as 80% reduction in use of electricity (supported by a Gartner report)!

Given all of the benefits that IT virtualization (and Cloud Computing) is demonstrating, it’s hard not to visualize a future for IT that’s built on information utilities. Obviously, in these early years… most large corporations will maintain their own internal “IT utilities” and will realize tremendous benefits by doing so. But eventually…. Will it make sense for even mega-users of IT resources not to tap into the commercial “IT power plants”?

Of course, I’m also the guy who wrote an article in 1985, for our leading IT trade publication, in which I predicted that the age of the software “factory” was imminent! I could see quite clearly that object oriented architectures and tools were about to bring an end to the long and painful process of reinventing software for every new product or application. Oops!

But this time…. The future not only looks pretty compelling, it’s being proven more and more viable at a rapid pace.

Now…  I have truly seen the light! Twitter has become an indispensible source of real-time news and information. But I know there are still many skeptics out there and I completely understand.  For me, a major breakthrough came when I realized that it was all about who/what sources you choose to follow.  For example, if you follow news sources (CNN, NYT, etc.) you get real-time news feeds. If you follow people in your profession, you get an early view of developments and a finger on the pulse of activity in your field.

Today I found an outstanding article in the New York Times, “Why Twitter Will Endure” (got it from a Tweet I received, of course), written by David Carr. (See http://bit.ly/4IpTAT) David does an outstanding job of explaining why Twitter has become such a key enabler for an informed and action-oriented lifestyle.

I posted the link to this article on Twitter, but that’s a lot like “preaching to the choir.” If you saw my Tweet…. then you’re using Twitter!  I’m sending this little piece to those of you who still don’t see any value in joining the Twitter community.

There is, of course, a great deal of value to be gleaned from the cloud movement – both from public cloud services and by implementing private/internal clouds. As cloud vendors and services mature, they will be a valuable addition to the IT landscape and will fill a variety of roles (some as core services and others as utility services). But enterprise users should not rush to try to realize the promised benefits without a clear strategy, realistic planning and – above all — risk management.

Just a brief comment about the etymology of the term “cloud. We used to use “cloud” as a symbol for some entity out on the network. We weren’t concerned with what was in that cloud (generally, it was a black box). Someone else was providing results/output from that we needed. It didn’t matter how the functionality was implemented as long as it delivered what we needed at the edge (contracts and other means of assuring the usability, quality and usefulness had to be in place, of course).

The cloud in “Cloud Computing” as we use the term today is quite different. These Clouds need to be grey boxes, not black boxes. We need to understand much more about their construction and how they operate. I strongly recommend that if you’re planning to host core processes or data in/on a cloud that’s managed and controlled by another party… you need to exercise due diligence and establish clear, contractual agreements on SLAs, ensure that security is appropriate for your use, and understand your data and process migration options — and that’s just for starters.

I’m elaborating more on this and other related topics to create a clear framework for a Cloud Computing Roadmap in my blog at http://www.StrategicITArchitecture.com.