WebServices dot org

Can StrikeIron Strike Gold in the New Software Reality?

Let me start off this Weblog by saying this: I am utterly fascinated with the StrikeIron business model. I don’t say this because the vendor has been a longtime friend of this site; I say this because I am a passionate believer in the power of technology, as an enabler of entrepreneurship and organizational transformation. I have long advocated flattening the organizational hierarchy, and pushing decision-making down to the managers and employees who deal with customers and production on a day-to-day basis.

That’s why I am a big supporter of Web services and SOA, because these approaches open up new possibilities and opportunities for developing an entrepreneurial culture within organizations, as well as spurring new ideas for start-ups. More than anything, Web services and SOA are paving the way for the composite or loosely coupled company – which may be an entity that exists purely as an aggregation of third-party services, provided on an on-demand basis to meet customer demands. Most of these services will be passed through as Software as a Service, both from within the enterprise and from outside.

Is this entrepreneurial spirit something that larger enterprises, particularly the Global 1000, would be capable or willing to digest? After all, larger enterprises usually have their own humongous internal IT development shops. But, some observers point out that some of the largest and most progressive companies may, in fact, be the most enthusiastic embracers of the virtual, componentized way of doing business. Mohan Sawhney, professor at Northwestern's Kellogg School of Management, for one, believes that the best-run companies are becoming “orchestrators” of networks of services, rather than actual producers. I saw Sawhney at a recent conference, who quipped that some mobile phone companies provide a good example of this orchestrator role, in that "they don't do anything themselves, they just collect the money." Even Cisco comes close to this orchestrator model, he pointed out: “85 percent of Cisco's products are never touched by a Cisco employee.”

So, back to the StrikeIron connection. To achieve the orchestration Sawhney talks about, especially in terms of software-based services, companies may find their best option is to turn to third-party marketplaces that can provide the necessary software on demand. StrikeIron offers an online marketplace in which enterprises can tap into services that they may or may not have the time or inclination to build. Why reinvent the wheel by having your staff spend time building service components, when you can quickly subscribe to a component, that's been tested and uptime certified, and pay for it on as-used basis?

So, I, as the software entrepreneur, could write my service, which could be a system that tracks the number and costs of Styrofoam cups used within corporate cafeterias. I would submit Joe’s Styrofoam Cup Accounting Service to StrikeIron, which would validate the quality and uptime of my service, and make it accessible to enterprises and ISVs across the globe. An ISV such as SAP may pick up on it, and add it to their next enterprise release as an additional management feature. The corporate accounting department that installs the next SAP release, then, may see the value in keeping track of cup expenses (especially if it’s a real caffeine-driven work culture). They then turn on the feature that accesses the StrikeIron Marketplace, and Joe’s Styrofoam Cup Accounting Service. Do I make my millions this way? No, more likely, I will make a few pennies per transaction. Still, these things can add up quickly.

A couple of weeks back, I had the opportunity to chat with Bob Brauer, CEO and president of StrikeIron. (The full Q&A of this session will be posted the week of January 30th at Webservices.Org.) Bob discussed how StrikeIron’s ISV partners are leveraging Web services as part of their application offerings, adding online services as required by their customers.

If StrikeIron’s vision for a marketplace of services continues to take off, this may push some software vendors to change their models to component delivery, perhaps based on a micropayment business model as I alluded to above. This makes plenty of room not only for small start-ups, but also for development shops within traditional enterprises that have great ideas. StrikeIron sees the potential in the corporation-as-service-orchestrator phenomena, offering more than 70 Web services that can either be linked into a company’s operations, or are offered as part of applications offered through ISVs. For example, one of the services StrikeIron offers is an address-cleaning service through the US Postal Service ort Canada Post.

Bob Walsh, author of a new book entitled MicroISV: From Vision to Reality, validates this thinking. In his book, he discusses how entrepreneurs and technologists can ride the new wave can the rise of smaller application providers that can put the components in place for a complete solution. He recently told me that “while most MicroISVs are focused on either the desktop or providing a stand-alone service, I think you will see more and more MicroISVs as ‘parts.’ You are already seeing micro-ISV's providing add-on services in shipping, transportation and logistics; more will follow.”

StrikeIron recognizes that just as businesses are evolving into orchestrator roles, so are the systems that support them. As Sawhney so aptly put it, "five years from now, the concept of an application will be obsolete. They will all be services, combined, mixed, matched and reused as needed.”