I've been receiving a lot of e-mails this week. Not from technology guys looking at SOA but from investors looking to invest in companies that have SOA technology and services. Indeed, the stock market has been raging lately, and while I don’t think we’re filling up a bubble with hot air again, there is much money to be made in technology over the next few years.

You know you're in a cool space when Motley Fool talks about you, and that's what occurred in this article "SOA: The New Software Bazaar" explaining both the benefits of SOA and how to invest in this technology.

"This is the SOA promise -- and CIOs believe. Merrill Lynch surveyed CIOs and found 87% agreed SOA is the "next big thing" in enterprise software. So, what benefits are they buying?

Technology benefits: reuse of existing IT assets; quicker development of new software; simplified, integrated, and standardized IT portfolios; and leaner technology departments, organized around processes, not packages.

Business benefits: create more flexible businesses, supported by streamlined, automated business processes and software services.

Financial benefits: quicker responses to market changes boost revenue; reuse lowers maintenance and development costs; requires lower total capital invested in IT; and risks reduced by not building software from scratch."

Clearly, SOA is getting some play on Wall Street, and for a good reason. It's a legitimate problem; the existing bad architectures within most enterprises are limiting the capabilities of business. SOA...the notion, the approaches, and the technology has the potential to solve this problem. Thus, it makes sense to invest in companies that provide either SOA services or technology.

I've found that the best SOA technology is found inside of smaller private companies, and unless you have the major duckets to be an angel investor, or dump some bread in the larger VC funds, you won't be able to cash in on this investment trend, at least as a pure play. However, with the trend toward acquisitions, this means that many of the larger public companies are adding these companies to their portfolios...Oracle, BEA, and IBM, just to name a few.

SOA is a sound investment opportunity, but you need to think long term and focus on the business value of fixing the dysfunctional enterprise architectures you find today. There are more out there than you think, and those are examples of bad investments.

Posted by Dave Linthicum on September 21, 2006 05:47 AM