Enterprise Initiatives

Back when Jaws was still considered a scary movie, the mainframe dominated the hardware marketplace. Well, Just when you thought it was safe to get back in the water, the mainframe or at least the mainframe mentality, is coming back.

Virtualization is as hot of a topic as BPM and SOA these days. Companies are saving millions of dollars by consolidating hundreds or even thousands of individual servers onto small clusters of servers serving up virtual machines. Other drivers for this technology are reductions in energy, emissions, and floor space, improved manageability, and easier disaster recovery strategies.

The Butler group published an article called, "The King is Dead - Long Live the Mainframe". If you have the time, this article is a great read. Here is a quote from the article:

We believe the wider adoption of the mainframe beyond these markets will be influenced by developments in the Service Oriented Architecture (SOA) paradigm, and the impact that the advancements in the capabilities of x86 server virtualisation is having in the market.

One of the many reasons for the decline in mainframe usage over the years is the lack of products that are available for the mainframe platform. This is changing as Linux can now be the OS of choice on the mainframe. The article continues with this quote:

Another argument against mainframes has been the lack of commercially available software developed on the platform, which at best tends to be ported to the system at a later date, or not at all in some cases. This has created the ‘inhouse’ or customised solutions that have become associated with many mainframe implementations. However, since IBM announced support for Linux on its Z series this has become less of an issue.

But even if companies are not considering mainframes as a platform for virtualizing their enterprise, one can't help but see the resemblance of today's virtual infrastructure with the mainframe infrastructure of the days gone by.

As I continue to research the virtualization movement, I keep stumbling across articles that point to various issues and challenges with virtualization. These range from security to inadequate monitoring and managing tools. When companies like VMWare and Open Source solutions like Xen resolve these issues, won't these solutions closely resemble the mainframe? If you think about it, the virtual server concept is basically the same thing as LPARs. The architecture behind the mainframes of yesterday are starting to look very similar to the architecture behind virtualization today.

IBM is using this opportunity to revitalize its mainframe sales. Most of their sales in recent years can be attributed to the fact that companies cannot afford the cost to migrate off of the years of legacy built on top of mainframe technology. Now, IBM can leverage the new mainframes running Linux as a solution to virtualization and Green IT initiatives. And by the way, the are eating their own dog food too.

IBM saves $250 million consolidating Linux servers on to mainframes

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?