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Would You Invest Money Today in a Startup That Was Offering an SOA Solution?

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Joe McKendrick: Would you invest money today in a startup that was offering an SOA solution?  If so, what kind of solution would attract your interest and dollars?

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  • Perhaps. While SOA has its many proponents, the big challenge is actually realizing the benefits. A startup that not only delivered a practical SOA solution but paired that with an SI/consulting arm to make it “come aliveâ€? might be a more attractive offering.

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    If it is just a SOA solution w/o business subject, then NO. Otherwise, certainly YES - SOA is the future business model, so I do not have doubts with this matter.

  • An SOA solution for "what"? The possibilities are endless from a middleware product or ESB, an infrastructure/IT component, a complete set of services for a particular domain/vertical, etc.?

    As it currently stands, this question is a bit like saying "Would you invest money in a startup company that was offering a medicine?" Without knowing more about the medicine (for what disease, cost, need, FDA approval status, etc.) how could you possibly invest in money into it? I certainly wouldn't!

  • I have to agree with Michael. My answer would be NO unless there is some interesting business solution with it.

    As for startup that is selling a product and building their SI/Consulting arm, definitely NO. Startups should be focused on their solution and it is either product or consulting.

  • Yes, maybe they found the way to simplify SOA and they can make notorious the benefits faster than others. Or maybe they have so much added value and they will be better than the options on the market!!

  • Cloud, baby, cloud... A company offering SOA support from the cloud is worth looking at. Many companies are still tangled in spaghetti architecture, and don't have the time or resources to undertake the scale of transformation required to service orient. As Chris Harding (Open Group) says, maybe it's time for "SOA as a Service"...

  • I would change the question to a more realistic question: Would you recommend to a Venture Capital to invest money today in a startup that was offering an SOA solution? If so, what kind of solution would attract your interest and dollars?
    This is a more realistic question due to two reasons:
    1. I do not have enough money to invest.
    2. I already consulted Venture Capitals about investing in startups (including a recommendation to invest in a startup that few years later was acquired by a company which paid for it more than 400 million USDs.)
    My answer to the modified question:
    The answer could be yes or no depending on circumstances.
    The issue is not if they developing a SOA solution or some other type of software. The Key questions to ask are: Do they develop a unique solution? Will it provide Business Value? Is there a large enough potential market segment which may use the product or will such a market evolve in few years?
    For example, If it an Enterprise ESB solution I doubt if it will be significantly better than current solutions. In that case my answer is no.
    On the other hand I agree with Joe that SOA for the Cloud solutions could be interesting for investors. For example, if it is an innovative ESB connecting External Clouds and an Enterprise my answer could be: yes, I would recommend.
    I would also think that partial automatic transformation of current assets to Services and Processes is an interesting topic for investors. Mapping of current assets with modeling of Service architecture is another promising topic.

  • NO. There's more than enough SOA-based technology and solutions on market (governance, BPM/SOA frameworks etc) which is under utilised. We don't need more, we need to understand how to get the value of of what we've already got.

    That said, don't underestimate the power of a cynical investment in a well marketed product. The Bloom Box was nothing new (you can already by equivalent solutions on the consumer market in the UK) but a potent marketing strategy delivered a fawning media and pro-blogger audience, with a noticeable impact on Bloom's valuation.

  • I happen to be working at a startup that is implementing SOA. It really depends on what the company business architecture is. In our case, we are an aggregator of content from many sources across many industries and integrate all of this content at the point-of-sale on various different POS platforms. For us, SOA is a no brainer. Also, our data requirements sometimes dictate where our data physically resides (public cloud, private cloud, or client data center). Again, SOA is the answer.

    But not all companies have these types of requirements. If a company is doing SOA without the business drivers behind it, I would not invest. I would also add that we are doing SOA without an ESB or any tools for that matter. This will change down the road as we expand and raise more capital. I would be concerned if a startup ran out and bought an ESB and a bunch of tools before it justifies it with revenue and transactional volume.

    My 2 cents.

  • I agree with the comments about the question needing to be more realistic (Tarak, I liked the Medicine company comment :) ).

    I can say first hand that VCs are investing in companies that offer solutions for building service oriented architectures. We at MuleSoft (the company behind the Mule ESB and Tcat Server) recently raised a 12m round. We found a lot of demand in the investment community for infrastructure companies that have a viable business.

    Investors and the market are looking beyond the corporate firewall to see how SOA-infrastructure companies interact and play on the cloud and to understand how SOA should embrace/utilise the social media boom and the deluge of data that we continue to experience. There is a lot of ground to cover here and well worth investing in.

  • It depends on what is meant by SOA solution. If it's a startup trying to help other companies be successful with SOA, then it's more about whether they've come up with something unique that hasn't been done before and has the potential to make a big difference. I'd be very surprised to see this come along.

    The other situation is what Mike is living (and loving) today. A startup trying to solve some problem that is using SOA internally. In this case, I would only invest in startups that have SOA at the heart of their architecture. They're starting with a clean slate, it would be insane to not build that foundation on SOA principles. The reason it's so hard for existing companies to adopt SOA is all of the legacy culture, roles, processes, etc. that are a big boat anchor weighing us down. Take all that away, and the barriers don't exist.

  • I agree with Michael and Avi. As an investor, I would only invest in a new business application if it was SOA compliant. It was senior managements view at a major UK hospital that if you would develop new hospital solutions as a service, you would be ahead of the curve, ahead of all the existing vendors. He had just purchased Oracle Fusion for his enterprise.

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