Enterprise Initiatives

I stoled or as architects like to say, "reused" the title of this post from an interesting article in Computerworld by Steve Duplessie. The article starts out talking about how Web 2.0 will change our world and finishes with an example of a stupid business decision, hence the title, "You can't fix stupid". On the second page Steve has a point that gave me a reason to blog. Here is a quote from the article:

Free means crap, right? Wrong. How many of you keep Yahoo mail running on your BlackBerries along with Exchange because you know Exchange will be down sooner or later? When is the last time Google Mail was down? So my enterprise-caliber application running on an enterprise-caliber infrastructure with enterprise-caliber IT talent is less reliable than my free e-mail? Yep.

The "free means crap" perception is still shared by many people these days. Steve's email scenario is one of many real life examples that should help start putting this misguided perception to bed. I struggle to understand how smart people can refuse to at least investigate the possibility of leveraging Open Source software or Google Apps.

Many people are complaining about IT jobs moving offshore. One of the main reasons this is occurring is because IT is being asked to keep their annual budgets flat or even reduced year after year. This is extremely difficult to do when health insurance costs are going through the roof and the IT maintenance costs increase every year as we purchase additional products and services. The "easy" answer is cheap labor. Maybe it is time for an Open Source strategy. Look at how much money we are paying for Microsoft Office and Outlook. How much does it cost to purchase and maintain software like project management tools (project scheduling, portfolio management, requirements management, defect tracking, etc.)? Heck, their are even enterprise packages in the Open Source community for CRM, SOA, and BPM to name a few. Folks, there are alternatives out there that could save big bucks.

Does free mean crap? There are tons of quality free or inexpensive solutions in use by major corporations today. Let me ask you this. Does expensive mean good? Not necessarily.

The supply and demand for SOA and BPM tools and implementors is way out of wack. On the tool side there are way too many vendors and products and you will continue to see the big guys like IBM, BEA, Oracle, HP, and Microsoft go shopping. The implementor side has a different twist to it. There are many niche players who have staffs that range from 100 to 1000 people. These companies have been implementing SOA and BPM before they became the hottest topic since Paris Hilton's jail sentence. Now that the demand is so high, they are having problems staffing up.

I work at a medium sized company. We have been looking for a partner to help model our current and future state processes for a few areas in our business. The big guys like Accenture, IBM, and Bearing Point turned us down because the contract was too small. The medium sized companies are turning us down because they are out of resources. We had a bad experience with a boutique vendor on our first business process assessment so we are staying away from the small guys.

Our SOA partners are extremely busy and in high demand. We have over 20 projects that we need help with and we want to work on three or four of them at a time. They will soon be out of resources. So where am I going with this?

Everyone already knows that there will be mass consolidation as BPM and SOA pure players get gobbled up by the the billion dollar companies. The pure players are having problems competing against the stack players because more companies are using BPM and SOA together. What is not being talked about is the consolidation of the implementors. Accenture, Bearing Point, and others are going to start buying many of these niche players so they can go after the mid market dollars. The niche players are going to need to expand at rates that they can't manage. I am not a wall street analyst but something tells me that there is a lot of money to be made if you own stock in the right niche player.

Another trend that I am seeing is private equity companies buying up successful companies with plenty of cash flow. Look at Doubleclick. Hellman and Friedman bought them in July '05 and sold them for more then a billion in profits in April of '07. I can see this trend happening in the SOA and BPM consulting space. Private equity firms like H&F can buy these companies at a decent price, cut out the fat, stream line the operations, and flip them to the big industry leaders as they start competing for these types of companies. Look at the crazy shopping sprees that Google, Yahoo, and Microsoft are in the midst of. They are overpaying on many Web 2.0 startups just to beat their competitors to the punch. I believe that this same trend might happen in the next year or two in the SOA/BPM implementation space.

I would like to hear from those of you that work as consultants in BPM and SOA. Am I on to something or am I way off track?