Daily Archives: November 12, 2007

Oracle/BEA – Industry change highlights need for better software

Consolidation is a sign of change.

The proposed BEA/Oracle merger — which by the way seems inevitable — is a clear sign that the IT industry is in the middle of significant change.

In the beginning it was all about creating applications, putting in place the automated systems needed to run businesses more efficiently than the manual processes and procedures that predated them.

Now that this is done, or nearly so, it’s time to improve the effeciency of those existing applications – some of which have been in place for 30 or 40 years. It’s not about new applications, or databases, or application servers for that matter. It’s about finding a better approach — SOA for example — and about designing and building better enterprise software to help get the most out of what’s already there.

Every industry goes through a maturity cycle. With software we are right in the middle of a big inflection point. The original business model – the one that produced 80% margins after you covered your cost – is rapidly fading as open source comes to the forefront. The bigger companies are hit hard by this, and start to merge and consolidate to increase sales volumes and streamline production.

But that’s not enough. What many of these big guys miss is the fact that the software itself also needs to change – as the industry changes the product designs have to change to keep pace. Nobody needs more of those big stacks of enterprise software; no one needs more of those big server hubs. This is of course very hard for the big guys – they are stuck in the cycle of responding to their current customers’ requirements for improvements and enhancements to their existing products. They are caught in a classic “innovator’s dilemma.” And instead of innovating, or facing the pain of major change, they keep busy merging and consolidating.

It should be clear by now that customers have enough of the old expensive middleware. What they need now are lightweight, less expensive products that will help them extend applications into the modern world (e.g. RIA) at an appropriate price point. It should not cost as much to improve an application as it did to create it in the first place. A different approach to software is needed.

Following the initial automation push enterprises are left with stovepiped applications, heterogeneous environments, and outmoded approaches. In other words, we need tools and techniques to make what’s already there work better. And that is not what the Oracle/BEA merger is about.

We need software to unlock innovation and improve agility, not the same old product designs that were good 30 years ago just because someone’s stock price depends upon it. We need software suited to today’s challenges – a lightweight, configurable microkernal based approach to distributed SOA infrastructure. In both open source and commercial software flavors 😉