The Economics of SOA 1 The Economics of SOA Case Study: Quantifying the Savings of a Service-Oriented Architecture (SOA) IONA Technologies
The Economics of SOA 2 Executive Summary Service-oriented architectures (SOAs) are rapidly gaining mainstream acceptance, but when IT professionals look towards implementing (or re-implementing) their infrastructure they ask the ultimate question: Will a SOA actually save me money? Integration solutions such as Enterprise Application Integration (EAI) suites, application server stacks, and even some modern SOA implementations that are architected around a centralized server are expensive to install and even more expensive to maintain. They are also fraught with performance and scalability issues, and promote vendor lock-in. In contrast, a SOA built with distributed technology can be adopted and adapted incrementally for significant savings, and dramatically reduces IT expenditures because Distributed solutions have no hub A distributed solution eliminates the cost of creating, maintaining, and sustaining the performance and availability of another major server in the enterprise. These costs escalate rapidly because a hub creates a central bottleneck and a single point of failure. Distributed solutions are easy to maintain A simpler architecture and standards-based technology reduce training, deployment and support costs Distributed solutions are dynamic Additional applications are easily integrated into the SOA, and modifications and extensions are made with minimal resources and without disrupting any other deployed infrastructure components. An IONA customer quantified these costs. A large telecommunication company calculated and compared the costs of a traditional EAI approach to IONA Artix, an advanced SOA infrastructure suite, and found that Artix costs significantly less. They then analyzed the costs associated with using the two together in a phased migration and found that Artix reduces the ongoing costs of owning an EAI system by an order of magnitude. Artix is mature and proven technology that has created the robust and resilient infrastructure to support mission-critical applications at companies such as BellSouth, Raymond James & Associates, Marconi, and Deutsche Post (DHL). IONA is sharing this case study so IT professionals can make informed choices when designing their infrastructure.
The Economics of SOA 3 Operating Expenses of a Centralized Solution Integration solutions with a traditional centralized server are expensive and require a considerable investment in both time and technology. The operating expenses come from three key sources: Hub-and-spoke architecture - EAI systems, application server stacks, and some SOA solutions require all transmissions to pass through a centralized server for processing. Processing includes translation, routing, and qualities of service (QoS) such as security and management. Because the hub has to execute all integration operations for the entire enterprise, it requires an extremely large and expensive server machine. The costs escalate when availability and performance requirements are included. Proprietary and closed formats Solutions that were created before integration standards and Web services and had to rely on proprietary standards to communicate. Adaptors convert all transmissions into the proprietary format before they can be processed, and the transmissions then have to be converted back from the proprietary format for delivery. Creating adaptors requires knowledge of the internal workings of the hub and therefore can only be provided by the hub vendor, making it very difficult to integrate diverse systems. Some of these solutions have Web services adaptors, but that creates an extra layer and increases the number of conversions at the already overburdened hub. Monolithic structure - One of the most costly attributes of an integration solution with a centralized server is the dependency between the various components. Deployment requires all systems to be adapted to the hub resulting in a huge economic outlay, and creates stacks that lock the enterprise into a single vendor. Once deployed, the adaptors and the hub have to stay synchronized even small changes create a ripple effect. An IONA customer analyzed and quantified the costs of a server-centric solution. They itemized every expense and concluded that they could dramatically reduce operating costs by migrating to a distributed SOA solution. The advantages of this SOA solution are substantial even when a traditional system is already installed.
The Economics of SOA 4 Cost to Deploy a Centralized Integration Solution The customer analyzed their architecture as shown below: The one-size-fits-all approach to the integration package drives the high costs of software licenses for centralized solutions. As depicted above, the centralized server approach packages a multitude of features and functionality whether it is used or not, increasing the footprint of the product and driving up the license costs. In addition to higher software costs, this approach requires a major hardware investment due to the large footprint of the software package and the need to serve an entire organization. This approach comes with extraordinarily high upfront costs, and creates yet another technology stack in the enterprise. Centralized Deployment Cost Breakdown: Software licenses: includes EAI software, adaptors and additional app server licenses Hardware: eight server machines to handle the capacity and redundancy for high availability Labor: cost to support the installation and the deployment of the software and the hardware Services: custom work required to install the adaptors and to connect the applications and back-end systems to the hub. $274,212 $530,396 $72,206 $110,000 TOTAL DEPLOYMENT COSTS OF CENTRALIZED SERVER: $986,814
The Economics of SOA 5 Cost to Maintain a Centralized Integration Solution The expenses of owning an integration system with a centralized server do not stop once the system is deployed. Such systems are notoriously difficult to maintain. IONA s customer calculated that fixed annual costs of the proposed installation are as follows: Software maintenance and support: annual charges for the purchased software Hardware maintenance and support: annual charges for the purchased hardware Maintenance installation: person-hours required for standard maintenance of the installation $18,334 $24,412 $82,206 TOTAL MAINTENANCE COSTS OF CENTRALIZED SERVER: $124,952 Major expenses are incurred when a new application is integrated into a system, or a change is made to an existing application: Indirect labor Custom development $22,500 Software support $5,500 Hardware support $1,500 Maintenance Custom software $2,000 Vendor software $2,000 Hardware $3,000 Capital Software $25,000 Hardware $62,000 TOTAL COST OF INTEGRATING A NEW APPLICATION: $123,500 TOTAL ANNUAL COST OF CENTRALIZED SERVER: $865,592 The customer estimated that on average they would integrate six new applications a year at an annual cost of $741,000 on top of the fixed maintenance costs for a total of $865,952 a year in ongoing operating costs.
The Economics of SOA 6 Operating Expenses of a SOA A SOA built with Artix is fundamentally different from traditional integrations systems in that the functionality is distributed across the network rather than being concentrated in a central location. By moving integration services from a hub to the applications that use them, architects benefit from not having to maintain a hub and from the flexibility of localized control. Artix non-invasively extends existing systems with integration services, support for Web services standards, and qualities of service (QoS) to create service-oriented endpoints. Endpoints can be configured to include only the functionality needed, keeping the footprint small. Endpoints can also be dynamically changed without disrupting the rest of the infrastructure. For more information on Artix and its unique extensibility, refer to the IONA s white papers available at www.iona.com. The dramatic savings of an Artix SOA come from being Fully distributed Unlike EAI or app server solutions, a SOA built with Artix is fully distributed and therefore does not require a centralized server. Because high availability and load balancing are inherent in a distributed architecture, there is also no need for redundant servers. Standards-based and open A SOA built with Artix is open and based on standards. IT teams can extend endpoints to support any standard or service without depending on a vendor-supplied adaptor. Endpoints convert transmissions directly into the final format, eliminating all the heavy processing required with a proprietary, intermediate format. Incremental and dynamic The exceptionally high barrier to entry for traditional integration brokers comes from the requirement that all existing infrastructure components have to be replaced and maintained simultaneously. In contrast, a SOA built with Artix supports incremental adoption and dynamic change. Existing infrastructure components are extended and reused, and modifications are made locally by simply reconfiguring endpoints.
The Economics of SOA 7 Cost to Deploy a Distributed SOA with Artix The customer s SOA built with Artix is shown below: The significant difference between this architecture and the one analyzed earlier is that the integration functionality previously provided by the centralized server now resides in the endpoints. Endpoints are configured to only include the features needed, keeping the footprint small, and allowing modifications and extensions without impacting other applications. Artix does not require adaptors to be customized, and IONA includes 10 free days of on-site services to aid deployment. As a result there is no services charge for most Artix deployments. Artix Distributed Deployment Cost Breakdown: Software: total cost for Artix $285,637 Hardware: no additional hardware is needed $0 Labor: costs to support the installation and the deployment of the software Services: Artix does not use adaptors and supports most standards and systems out of the box; no custom work is needed. $10,000 $0 TOTAL DEPLOYMENT COSTS OF AN ARTIX SOA: $295,637
The Economics of SOA 8 Cost to Maintain a Distributed SOA with Artix SOAs are one-third the cost of a traditional system to deploy, but the most significant savings are realized after the initial deployment. The annual costs of the SOA built with Artix for this IONA customer are as follows: Maintenance and support: annual cost for the purchased software $50,000 Hardware: there are no hardware maintenance expenses $0 Labor: person-hours required for standard maintenance of the installation $10,000 TOTAL ANNUAL MAINTENANCE COSTS OF AN ARTIX SOA: $60,000 The bulk of the savings come from the agility afforded by an Artix SOA. Not only are support costs considerably less, but also the cost to integrate a new application or make a change to an existing system. Because changes can be made locally and do not affect the hub, the cost to integrate an additional application is less by an order of magnitude as shown below: Indirect labor Custom development $10,000 Software support $0 Hardware support $0 Maintenance Custom software $1,000 Vendor software $0 Hardware $0 Capital Software $2,000 Hardware $0 TOTAL ANNUAL COST TO INTEGRATE A NEW APPLICATION: $13,000 TOTAL ANNUAL COST OF AN ARTIX SOA: $138,000 Over the course of a year, assuming six newly integrated or modified applications a year, the customer projected the costs to be $78,000 for a total of $138,000 when combined with standard maintenance. This architecture saves $717,952 a year over a centralized server-based system.
The Economics of SOA 9 Using Artix with a Centralized Solution Since the ongoing costs of supporting a centralized integration broker are so high, the customer investigated leaving the legacy broker in place and using Artix for all future integration. This gave them the ability to gradually migrate their organization towards an SOA, and the option of replacing aging components without disrupting business operations. Artix accomplishes this by non-invasively encapsulating existing infrastructure components so they can interact within a SOA. Artix bridges multiple generations of technology and serviceenables anything from mainframes to mobile devices. Artix is able to support numerous existing systems and multiple generations of architecture and technology without sacrificing performance or quality of service because of its extensible plug-in architecture. Rather than force applications to conform to predetermined transport and payload standards, Artix service-enables existing systems by extending the endpoint with targeted plugins, where an endpoint is defined as a service provider or a service consumer. Plug-ins add support for any protocol, transport, data model, security standard, development platform, etc., with a minimum footprint and little deployment overhead, while protecting the systems sovereignty as shown below: Endpoints are extended and customized by adding only those plug-ins required to support the unique requirements of the system. This makes it possible to support virtually any system while keeping endpoints small and efficient. With Artix, existing systems are service-enabled for reuse, and existing infrastructure components are extended to create a flexible SOA. This approach allows organization with integration technology in place to reap the benefits of a SOA without the traditional barriers to entry. For more information on using Artix to extend existing EAI installations, refer to the IONA white paper EAI: Rip and Replace or Leave and Leverage? available at www.iona.com. For more information on endpoints and IONA s patented technology behind them, refer to the IONA tech note Artix and ART available at www.iona.com.
The Economics of SOA 10 Cost Summary Computed across multiple years, the difference in cost between a hub-based system such as an EAI or application server solution and an Artix SOA increases as shown below: Centralized Distributed Cost to Deploy $986,814 $295,637 Cost to Maintain (per year) $124,952 $60,000 Cost to Add an Application $123,500 $13,000 The customer calculated the accumulated costs across a period of 5 years: $6,000,000 $5,000,000 Centralized Distributed $4,000,000 $3,000,000 $2,000,000 $1,000,000 $0 1 Year 2 Year 3 Year 4 Year 5 Year In this case there is no question as to which is more cost effective. But the situation is more complicated when an enterprise already has an integration broker installed with a prepaid site license. The customer also calculated the costs of a hybrid approach. As the customer quantified above, a majority of the savings of a SOA come when changes are made after the initial deployment. Therefore it is more cost effective for organizations with traditional systems deployed to leave the system in place and instead of deploying additional adaptors and increasing the size of the hub, to use Artix for all work moving forward. This incremental approach breaks even within the first year:
The Economics of SOA 11 $5,000,000 $4,500,000 $4,000,000 $3,500,000 $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 Centralized Centralized & Artix $0 1 Year 2 Year 3 Year 4 Year 5 Year Artix: Advanced SOA Infrastructure Suite Artix comprises a comprehensive suite of products to streamline, modernize and lower the operating costs of complex and heterogeneous IT environments. The Suite includes Artix ESB connects any service consumer with any service providers using any middleware by deploying, managing and securing a SOA without requiring a centralized hub Artix Registry/Repository a phonebook-style listing of all available services with automatic provisioning and monitoring of services, to maximize reuse and ensure continued adherence to enterprise policies Artix Orchestration - facilitates the composition of fine-grained functionality into reusable services using BPEL to create business-level services Artix Data Services a metadata management, data modeling, transformation and integration toolkit to abstract data services from the underlying transport and integration infrastructure Artix Mainframe a service-enablement engine that extends mainframe systems to integrate with off-host systems without the additional expense of running all applications on the mainframe SOA Management provided by AmberPoint - governs and manages a SOA implementation by monitoring the health of Artix ESB endpoint
The Economics of SOA 12 Summary Indeed, the new standards and technologies have made integration better, faster and cheaper. SOAs offer agile infrastructure that is less expensive to deploy and significantly simpler to maintain. Artix, with its unique extensible architecture, is an incremental solution that allows IT organizations to reuse their existing assets and migrate towards a SOA on a schedule engineered for fast return on investment. For more information on these architectures, the customer s deployments, or to schedule a Value Assessment to evaluate migrating to a SOA please contact an IONA representative. IONA customers - including BellSouth, AT&T, Marconi, and Deutsche Post (DHL) use the extensible ESB to service-enable existing systems and establish a scalable, adaptable, SOA architecture. They chose Artix for its broad platform support, extensibility, and enterprise quality of service, and today they are building new business applications and process flows on common platforms such as Microsoft s.net Framework, IBM s WebSphere, and BEA s WebLogic. IONA Technologies PLC IONA Technologies Inc. IONA Technologies Japan Ltd The IONA Building 200 West Street Akasaka Sanchome Building 7/F Shelbourne Road Waltham MA 02451 3-21-16 Akasaka Dublin 4 Ireland USA Minato-ku Tokyo Japan Phone +353 1 637 2000 Phone +1 781 902 8000 Phone +813 3560 5611 Fax +353 1 637 2888 Fax +1 781 902 8001 Fax +813 3560 5612 Support: support@iona.com Training: training@iona.com Sales: sales@iona.com WWW: www.iona.com IONA, IONA Technologies, the IONA logo, Orbix, High Performance Integration, Artix, Celtix, Celtix Enterprise and Making Software Work Together are trademarks or registered trademarks of IONA Technologies PLC. COPYRIGHT NOTICE. No part of this publication may be reproduced, stored in a retrieval system or transmitted, in any form or by any means, photo- copying, recording or otherwise, without prior written consent of IONA Technologies PLC. Copyright 1999-2007 IONA Technologies PLC. All rights reserved. Any trademarks, service marks, or product names that may appear herein are the property of their respective owners