Services, Not Products at Heart of IT

Software-as-a-service (SaaS) and services oriented architecture (SOA) are coming of age after years of hype. These two trends are intimately linked and are accelerating the process of transforming IT into externally focused organizations that help drive and manage a company’s products and services.

These dual trends are transforming IT, and consequently the entire company, to become more of a services-driven organization versus a pure product-driven organization. CIOs can look to SaaS providers to learn some techniques to help them achieve this transformation.

SaaS providers built out infrastructure to manage and deliver their services with high service levels, overall quality of service (QoS), usage-based billing, and integration with partners’ and customers’ processes and infrastructure in mind.

As companies continue to transform their internal infrastructure to SOA, they must manage and deliver these new services in the same way SaaS providers have delivered and managed their products and services.

There are three key areas in which SOA is transforming the business of IT:

Unlocking Information. As more and more applications and data stores are being managed and exposed as Web services, the information residing in those systems has the potential to be exposed to a wider audience and more processes.

This new wealth of information must be securely managed and distributed while being used to create new products and services.

For example, a large shipping, logistics and supply chain company transformed its IT systems using SOA and productized those Web services to be delivered as a service to their customers rather than having its customers install software and hardware to access information on their shipments and inventory.

Faster and Easier Integration. Initial implementations of SOA were justified on the premise that SOA makes it easier to integrate internal applications and data.

As more of the infrastructure has become SOA enabled, the ability to quickly integrate the Web services with partners and customers has become the business driver.

Using SOAs, companies are building composite processes that enable their customers and partners to use a single application to integrate information across multiple customers and partners.

For example, a large medical records processing company uses web services to build a composite application enabling their customers (doctors) and their partners (bill processors) to provide patient data used for billing and to access that information via a single user interface with multiple data stores managing the information.

Infrastructure Management. SOA also transforms the way customers and partners consume IT services and resources. As such, SOA is forcing IT organizations to provide higher SLAs and QoS metrics.

This transformation is placing a heavy burden on IT to figure out how to quickly transform into a more services-delivery oriented model and/or expand current service levels.

To do this IT groups must enhance their ability to bill for accessing IT resources by both internal and external customers. For example, a large consumer products company aggressively implemented SOA to enhance its flexibility in delivering access to applications and services.

In the process they were forced to create a robust Web services management infrastructure to track internal and external customers accessing the SOA infrastructure to enable internal bill back and external COGS analysis.

These three examples and many other SOA transformations are accelerating the productization of IT. CIOs are no longer solely responsible for internally focused resources: they are becoming the owner of the products and services sold by the company.

Progressively, IT is looking more like an SaaS provider and less like a traditional IT provider. This business transformation will demand greater awareness at all levels within IT of business goals, and a greater focus on driving corporate and business strategy by creating greater value from the systems and services in place today.

SOA is an enabler to unlocking the potential of IT. SaaS provides a reference model for how to deliver and manage software as a service. It is up to IT leaders to drive greater value and transform their businesses to operate in the growing services-oriented economy.

K.B. Chandrasekhar (“Chandra”) is co-founder, CEO, and chairman of Jamcracker, a provider of on-demand delivery and management software. He is also the co-founder and chairman of e4e Inc., a global technology holding company and chairman of Aztec Software and Technology Services Ltd., a publicly traded company on the Bombay Stock Exchange.