Normalization of SOA means consolidation, retrenchment

We'll see fewer SOA technology companies in the next 18 months, but there are a few bright spots in the harsh reality

One of the things that's been going on for the last year or so, and nobody is talking about it, is the normalization of the SOA technology space: consolidation, severe retrenchment, and doors closing. However, there are a few bright spots around the harsh reality.

First of all, it's tough to run a technology startup in an emerging space. You're dealing with a constant lack of resources, a market that's ever redefining itself, and you're beholden to investors and a board of directors that may not get the space you're in. During times like these (I refuse to say "in these hard economic times") and within a space that finally is maturing, such as SOA, there are two clear directions that the SOA startups are going in: up or down.

On the positive side, a few innovative startups have figured it out and are actually growing in this climate. I spoke with Active Endpoints yesterday, and that seems to be the case there. Find a niche, do that thing very well, and sell it at a price that most SOA projects can afford. That's the formula I would use.

On the downside, there are dozens of small SOA companies right now that perhaps won't make it through this, and will either sell on the cheap or just shut their doors. Most of these guys made very basic mistakes, such as not completely understanding the space they are in and not designing, building, and selling a compelling product. If you're able to do that, the marketing and the selling part of the game is pretty easy.

What's unfortunate about some of these is that with a few course changes in the recent past, they could have hit a sweet spot in the SOA market; there are actually many sweet spots. A few are going to reorg, restructure, and bring in some new people, but it takes time to alter the fundamentals of the business and the technology, and I think if you don't have it now, it's too late. The hype cycles in this business are brutal.

So, we'll see fewer SOA technology companies in the next 18 month, and I'm not sure that's a good or bad thing -- it's just a thing.

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