There’s a battle brewing in the Cloud Computing marketplace analogous to the SOA platform war fought over the last few years. Just as platform vendors like IBM and Oracle sought to co-opt the SOA story to sell more middleware, leading to customer disillusionment and the “SOA is dead” meme, the battle today is over Platform-as-a-Service (PaaS) offerings. PaaS is essentially the delivery of a computing platform and/or solution stack as a service. “We make our money on traditional systems integration,” say the platform vendors, “so let’s move traditional systems integration to the cloud!” After all, you’d think with all the hullabaloo surrounding Cloud Computing, that platform vendors would be jumping into this new area of opportunity with two feet. And in spite of Larry Ellison’s initial resistance, it does seem that the platform players are all over this market. If there’s an opportunity to sell new stuff to their existing enterprise client base, what’s not for a platform vendor to love?

The reality, as so often happens, is far more complex. The platform vendors are running scared. They were caught by surprise by the SOA debacle, and now they see the same writing on the Cloud Computing wall. As their customers started figuring out that SOA success didn’t depend on buying new software after all, but rather was a better way to organize existing IT assets, now Cloud Computing may replace the need to own those assets altogether. Imagine a world where enterprises no longer purchase software at all! Why bother, when they can rent it on the Cloud, pay as they go, and never have to worry about maintaining or upgrading the big packages that have kept the vendors’ stock prices up for so long?

So, how are the platform vendors dealing with this threat? Basically, by trying to turn lemons into lemonade. There are two primary ways these software companies can leverage Cloud Computing to their advantage. First, they can provide software to the Cloud providers themselves. There’s definitely money to be made there, but once the dust settles, there will only be so many Cloud providers in the world, and thus that addressable market is limited. The big opportunity for the big vendors is in PaaS. If the middleware vendors become Cloud providers themselves, where they are offering “middleware for rent” in the Cloud, then they will have turned the Cloud risk to their advantage.

At least, that’s what they are thinking. Unfortunately for these vendors, the PaaS strategy is inherently flawed, in a surprising parallel to the “software-first SOA” debacle of a few years ago. Fortunately, just as we did last time, ZapThink is here to raise the alarm. Here, then, is why you should be very careful when you consider PaaS, because placing a bet on this dead-end market could be a very bad mistake.

Learning the Important Lessons of SOA

Hopefully, enterprise practitioners who were either burned by the ESB-first SOA fiasco, or who were smart enough to dodge that bullet and tackle architecture first for that matter, will avoid this mistake this time. Compounding this challenge, however, is the lure of Cloud Computing. Since the essence of the Cloud is virtualizing IT resources, don’t we get the business agility benefits of complex systems engineering automatically by moving to PaaS? Unfortunately, the answer is a resounding NO.

ZapThink has been following what’s now called PaaS since we worked with Grand Central Communications several years ago. In many ways, their “integration as a Service” offering was ahead of its time. But in other ways, there are flaws with this model that are well worth examining. If you take a “connecting things,” traditional systems approach to enterprise IT and extend it to the Cloud, you end up connecting things via Cloud-based capabilities, which we are now calling PaaS. What you end up with, however, is still a traditional system, which means that it won’t exhibit business agility. You may have shifted some capital expense to operational expense, and you may be able to take advantage of the economic benefits of dynamic provisioning, but don’t expect PaaS to help you respond to shifting, unpredictable business demands.

To achieve such business agility, SOA turns integration on its head. Instead of hooking up our infrastructure ahead of time, we’re building Services that are ready to be integrated. Essentially, the business need not know or care where the Service implementations are physically located. What matters is that they are discoverable, consumable, and composable. As a result, Services and their underlying implementations are component systems of the complex system that is the overall SOA implementation.

From the technology perspective, there are two key enablers of this “ready to be integrated” agile characteristic of Services. First, there’s the intermediary pattern that ZapThink has often discussed, offering routing and transformation capabilities that support the business Service abstraction. However, the intermediary pattern is not the whole story, as traditional middleware can also perform routing and transformation operations, and furthermore, there are plenty of examples of successful SOA implementations that have leveraged middleware for just such purposes. So what’s so special about the no-platform SOA approach?

In a properly architected SOA implementation, routing and transformation operations are performed as a matter of policy. Those policies are represented as metadata, and the governance infrastructure, in turn, manages those metadata. By coordinating the behavior of intermediaries via the governance tooling, we’re able to establish the loosely coupled links between systems that are so critical to implementing the complex system made up of those systems.

And that point brings us to the second technology lynchpin behind agile Services: metadata-driven Service discovery and automated governance. In the traditional systems view of SOA, middleware is the technology lynchpin of the architecture, while in the complex systems view of SOA, the governance tooling, centered on the registry/repository, is at the center. Which in turn brings us to the missing part of the PaaS story: the virtualization of automated governance in the Cloud.

Governance in the Cloud

As we’ve pointed out before, Cloud governance is one of the primary challenges of Cloud Computing, and security in particular is a deal-killer for Cloud Computing. Clearly, it is essential to govern Cloud-based resources, but that’s not the point we’re trying to make here. The larger Cloud governance story is Governance-as-a-Service, or GaaS. Instead of focusing on governance of the Cloud, GaaS focuses on governance in the Cloud.

Today’s GaaS discussions center on policy management in the Cloud (“rent a registry/repository”) or more commonly, policy enforcement in the Cloud (“rent a virtual XML appliance”). Such discussions, however, only characterize the state of the market today, but do not indicate the important role GaaS should play in the future. Essentially, the next step in the maturation of SOA requires the virtualization of this governance infrastructure. If we can move not only security-related policy management and enforcement to GaaS in the Cloud, but also abstraction-related governance, we’ve taken a bold leap toward full location independence.

In essence, taking a traditional systems “connecting things” approach to integration leads to the PaaS vision, but not to business agility. To achieve business agility, the “building composable Services” complex systems approach leads to GaaS, not to PaaS. As Cloud architectures mature, we won’t require a “platform” at all, either within the organization or in the Cloud. Instead, we’ll require metadata-driven governance on virtualized, location independent Cloud infrastructure. Just as platform-first SOA led to “SOA is dead” discussions, PaaS-first Cloud may very well lead to a “Cloud is dead” meme. Get the architecture right, however, and Cloud Computing will mature — but governance players, not platform players, will be the winning vendors in the end.

The ZapThink Take

The PaaS vendors, of course, are likely to fight this trend tooth and nail, because it means that enterprises will not only need less middleware, but they will have a diminishing need for PaaS as well. It’s still unclear which vendors will stand to benefit the most from this trend. The two leading SOA governance tooling vendors, HP and Software AG, may be too invested in selling software to work though all the implications of GaaS, but it’s their opportunity to lose. Vendors like Layer 7 Technologies and Vordel are leading GaaS discussions today, but these XML appliance vendors are perhaps focused entirely on security, which is a great strategy in the short term, as the demand for Cloud security is clearly poised to explode, but they may be too busy with security to think about the big picture of GaaS.

The bottom line, therefore, is that it’s anybody’s game at this point. Are you a startup in the Cloud space struggling to find the right PaaS niche? Perhaps betting against PaaS in favor of GaaS is the right play. Drop ZapThink a line and we’ll help you lead the way.

4 comments for “Why Cloud Computing Scares the Platform Vendors”
Frank Wilhoit Avatar

"...In a properly architected SOA implementation, routing and transformation operations are performed as a matter of policy...."

In a properly architected SOA implementation, transformation is an application responsibility, because it is a local concern. The knowledge of how to do transformations is too fragile to be transferred, so it has to be exploited where it is found in the organization. SOA is what we have to do because packaged applications are still being delivered without essential capabilities.

Posted by Frank Wilhoit | March 11, 2010
Ata Avatar

I have seen large enterprise systems developed on open standards (GPL .LGPL , CC etc. ) running smoothly (i.e. Bug free ) and with minimal support( 3 person for entire 300 peoples network) .And that included database ,Application , network and customer support . so ,possible things are already exists around us with scope of further improvement .Governance and the LEVEL of of Governance will be a key issue .But It is also short existent. Future will only belong to security and mix of governance and security .

Posted by Ata | March 19, 2010
Jay Godse Avatar

Platform vendors should be scared. Their customers are increasingly consolidating under cloud platform providers such as Amazon and Google. These cloud providers have strong negotiation power because of economies of scale. A number of them have also figured out how to deploy open source solutions and avoid license fees altogether as a result.

I think that you are right in that some of the middleware vendors should provide middleware services via a cloud platform themselves. But that is hard. Big companies are often geared for making big capital expense (capex) funded sales, and it is tough to change their business operations to make small recurring sales of operational expense (opex) funded services.

From what I have seen, the companies that succeed from opex-funded sales (e.g. Google, Amazon) are very different from the ones that made capex-funded sales (e.g. HP, Oracle). I have never seen a company really make the transition. Time will tell....

Posted by Jay Godse | January 7, 2011


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