Most reports from throughout the real estate finance business paint service-oriented architecture (SOA) as a strategic investment that yields numerous long-term benefits.
A recent report from research firm Gartner indicates those fruit-bearing investments could come at a cost.
The insights came from Gartner analysts who hashed out technology, organizational and governance best practices for SOA initiatives at Gartner Symposium/ITxpo 2007: Emerging Trends in late April 26. They reported that SOA will be used in more than half of new “mission-critical” applications and business processes designed in 2007 and more than 80 percent by 2010.
Growing pains of SOA
SOA involves IT architecture that uses “loosely coupled” services to support business processes and users. The idea is not new — technologists have long envisioned an architecture through which network resources could be offered as independent services that one could access without having to know their underlying platform implementation.
As SOA has been adopted across industries, the number of failed projects has grown, Gartner said, and businesses have discovered the benefits have a cost. Software products for SOA have hit the market, it added, but have sometimes proven to be immature, disappointing users with poor reliability, performance and productivity.
Specifically, SOA principles have been applied too rigidly, which has created some unsatisfactory outcomes as projects became too expensive and missed deadlines.
"Almost any technology taken too literally is going to be disruptive, ” said Andrew Weiss, CTO of automated underwriting specialist Overture Technologies. Weiss, who also served as senior vice president of Advanced Technology at Fannie Mae for almost a decade, commented on the report in an exclusive interview with Real Estate Technology News.
A purist, he explained, might insist that every IT transaction occur through Web services. That might not be necessary, though — there may be other parts of the architecture where SOA is not appropriate. Tasks involving high volumes of reference data, for example — where an SOA approach might make the application slower and require more network resources — could best be handled via a more traditional direct connection.
Compared with traditional monolithic or client/server architectures, Gartner noted, SOA requires a more careful application design and often means an outlay of IT funds for integration middleware.
Weiss pointed out, however, that much of that software can be acquired though open-source channels, such as the Apache Web server or Tomcat Java application server.
The greatest potential pain point, he said, will come from interaction between legacy systems and new SOA-based applications. “Service-wrapping” older systems will be possible but will require skill and knowledge — and perhaps some experimenting, Weiss said.
There could be regional challenges, as well. Large metropolitan areas on the U. S. coasts may hold a greater stock of SOA-savvy IT employees than those cities in other parts of the country.
The testing challenge
Gartner added to that list of pain points, arguing that testing, debugging, managing and securing a distributed SOA network can also be more complex and expensive than in older IT architectures.
“Testing is an interesting question, ” Weiss said. “Testing costs may go up in the very beginning, but you can actually change the model and paradigm for testing in a way that makes those testing costs go back at least down to past levels if not a little lower. ”
For instance, when working with monolithic architectures, lenders have to test almost end-to-end for any significant change. With SOA, they can focus testing only on the part that’s undergoing change and do a fairly light end-to-end integration test.
Is the ROI there?
Despite the falling cost of technology, more widespread know-how and the availability of SOA services from systems integrators, in most cases it will be hard to justify the incremental upfront cost of SOA versus traditional architecture for fast return-on-investment, opportunistically oriented projects, Gartner said. Through 2008, the upfront investment for large-scale service-oriented applications will be justifiable only for projects with a planned lifetime of three years or more. But is that a meaningful statement in the mortgage world?
“Almost every project has more than a three-year lifespan by the time you get it done, ” Weiss said.
The ROI challenges Gartner cites might relate to integrating new technology with legacy systems.
“If you take an old-style approach to the world and try to force it into an SOA-based project, you are likely to have some conflicts, ” Weiss said. “Does that call into question the value of SOA architecture or the appropriateness of other practices? I would suggest the business value is there and has been demonstrated a number of places and ways, but there needs to be a recognition by the CIO that you may need to alter your practices somewhat. ”
CIOs can realize true “business value, ” Gartner echoed, because SOA helps them deliver more in a flat-budget situation — even as they work to keep pace with endless business change.
They should also see greater adaptability, faster deployment times and lower costs for application development and integration.
The research analysis firm suggested that businesses “aggressively invest” in SOA, as it’s on the fast track to become the architectural foundation for almost all new business-critical applications.
Matt Smith is the editor of Real Estate Technology News , the only full-time newsroom in the country devoted solely to mortgage technology and real estate data. Real Estate Technology News is the essential knowledge tool for professionals whose livelihood depends upon keeping pace with state-of-the-art mortgage technology and real estate data that powers these critical valuation and collateral risk systems. Real Estate Technology News is a publication of October Research Corp , the nation’s premier provider of real estate news and data.