While SOA has been a technology architecture that has been around for a while, not many people have been successful using it as it is not very well implemented and requires proper governance mechanisms. SOA is based on the philosophy of building systems based on the interaction of loosely coupled, coarse-grained autonomous software units called Services. A service can be understood as the realization of self-contained business functionality in the form of software.

When organizations decouple their services from the silos that an application focus has placed them in, they realize the intrinsic value of the service and its relationship to their business processes. The value of an application does not become less, but the nature of an application changes to one where services form the core of the undertaking.

With that in mind, it becomes easier for Software as a Service (SaaS) to become a reality. An organization already making use of services finds it simple enough to integrate an external service. The reverse is also true. An organization using services finds it easier to expose its own services to external customers – in essence to take its services to market by providing Software as a Service.

Thus, the key principles of SOA, such as alignment between business and technology, loose coupling, composition, increased interoperability and federation make it an ideal foundation for a SaaS product.

Now, two key reasons why SaaS providers have always targeted small and medium enterprises was the inability of SaaS applications to integrate with existing IT assets of larger enterprises and the lack of customization of SaaS products.

However, by implementing SOA, this can be changed as it can allow you to accomplish the following:
• Your SaaS application can integrate well with existing IT assets of your end-user
• Mashups will become a possibility between business processes or services that can be a combination of on-demand and on-premise services
• SOA enabled SaaS will allow you to scale and flexibly version your software efficiently.

For it to act as a strong foundation for building SaaS products however, SOA must be implemented in a disciplined manner with excellent governance. This can lead to truly successful SaaS products.

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Many organizations had earlier been skeptical about the ROI on using Web 2.0 tools across the enterprise. However, with grass-roots adoption by on-the-ground staff to improve productivity, collaboration and knowledge-sharing, and results that are building over time, enterprises are willing to invest more on Web 2.0 technologies.

In fact, a recent report by Forrester Research is predicting that enterprise spending (currently at around $1 billion) on social networking tools, mashups, and RSS is going to increase dramatically to $4.6 billion by the year 2013.

Some of the largest ISVs in the enterprise space have been integrating Web 2.0 technologies into their products for some time now. Microsoft’s SharePoint collaboration features, IBM’s Lotus connections, mashup products and upcoming Quickr and SAP’s Business Suite which includes social networking and widgets are some examples. However, many of them are limited in their cross-boundary integration abilities.

On the other hand, stand-alone commercial Web 2.0 software companies that cater to Enterprise 2.0 users like Communispace, Newsgator Technologies, Six Apart and Jive software have their own USPs and are holding their own in this emerging enterprise marketplace.

At this point it is difficult to tell who will win out – the platform/suite players or the niche pure-play Web 2.0 vendors. One thing is for sure: those who address the problems of interoperability and integration of these new technologies with legacy systems, identity management and security, will be benefited the most.

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