SOA has been aggressively hyped by the IT industry as a technology that can - and does - change the very nature of business. In recent times - as you well know - the Internet was a similar technology - and as with the Internet, we at IBM actually believe the hype to be true.

SOA has come on the scene in a big way in the past few years. But hype alone isn't what's causing the huge stir. It's because those who've started using SOA have discovered a huge benefit: flexibility. Let me put it this way: Before SOA, to have flexibility, a company might have needed to deploy and integrate 20 different software applications. After SOA, it mightn't need to build 20 isolated applications but only one instead - which, on a dime (both literally and figuratively), it can reconfigure 20 different ways to meet the imperatives of changing market conditions. That's flexibility.

Which begs the question: What's SOA? Without getting too technical, SOA is a technology that "decomposes" your software applications into their elemental parts - parts that you can rearrange, very fast, to create new applications. Thanks to open standards in both business and technology - standards that IBM along with the industry-at-large has relentlessly fought for in recent years - these components can be combined with those of your partners, customers, and suppliers. You can therefore create these super-applications, a composite of functionality, across companies and even industries, to develop entirely new kinds of business.

Suddenly, your IT is no longer an inhibitor to innovation. Fulfilling its promise to you, it's an enabler. And I can tell you that even now, early in its life, SOA is shaking up companies and industries.

We recently examined several leading-edge SOA projects covering 11 different industries that in one way or another exhibited the recognizable pattern of consequences and benefits that the most acute observers predicted for SOA. Here, I'll talk about them briefly.

The network effect: Dominant suppliers and buyers, appreciating the simplicity and ease of SOA, can command their partners to follow suit. If these partners don't then they can lose these vital relationships. Consider what happened with radio frequency identification (RFID) a few years ago. An important buyer, convinced of its advantages, deployed it and compelled its network of suppliers to do so too. We have every reason to believe that SOA - with benefits at least as significant as those of RFID - will unfold the same way.

Intensified competition: Perhaps the most profound repercussions will occur in the competitive arena. SOA will likely intensify competition between existing competitors, and conceivably - out of seemingly nowhere - usher in new ones. SOA will do this by eliminating the traditional barriers to entry. When "services" are imprisoned inside proprietary applications, they can be prohibitively expensive to duplicate. But when - through SOA - standards-based services are made generally available, new players can tap them just as easily as established players. This means that the barriers to entry in an industry will no longer be technical and costly. They'll be only imagination, creativity, and nerve - qualities in no short supply among millions of hungry entrepreneurs.

Is this utopia, or just a level playing field? If you take the logic to its extreme, you can easily envision a global economy in which standards-based services will be available to everyone, and those who come out on top will be the ones who assemble and reassemble these services in the most creative ways in response to - or better yet, in anticipation of - emerging business opportunities. In this sense, SOA can be seen as an expeditor of the more perfect competitive equality to which markets are always tending. The Internet in its first incarnation spawned many new competitors - eBay, Amazon, and Google, to name a few - mainly because it let people connect to machines (and information) in entirely new ways. This next incarnation - SOA - will let machines connect to other machines in entirely new ways - spawning yet another wave of innovative business designs and companies.

Those are some pretty big picture ideas, and I think they'll give you the sense that you had better SOA-enable your infrastructure to be able to participate in this new economic order. But where exactly do you start - and though SOA might suit many if not most companies, how can you be sure that it suits yours?

There's a great deal of detail on all this in a white paper, but here are guiding principles in brief. To get started:

1. Focus on a real business problem (preferably one with revenue potential)
2. Start small
3. Find skills
4. Think long-term (in other words, don't "go" big. Just "think" big)

This last point is exceedingly important, for, as we discuss in a companion white paper, SOA - a practical guide to measuring return on that investment, the real payoff from SOA comes when, after you endow your infrastructure with it, you keep creating powerful new applications at comparatively little cost. Think of it as modular, or atomic, business.

And what kinds of companies most benefit from SOA. Well, consider these attributes:

1. An extensive dynamic set of trading partners
2. Multiple software applications and interfaces
3. Products and services with a large IT component
4. Frequently changing business processes
5. IT capability as a defining characteristic
6. The presence in your network of a buyer or supplier with disproportionate power

At least in our experience as a business partner to thousands of firms around the world, this list, to one degree or another, defines most of them. One misconception afoot is that small companies probably don't need SOA - because, it's alleged, their infrastructure isn't nearly as complex as larger firms'. That might be true, but to tap into the galaxy of service components increasingly available, they'll need SOA themselves. It's their ticket to broader integration - an opportunity to act big just as the first wave of the Internet offered. I'll amend the above list to declare this, unabashedly: there's really no firm out there that doesn't need SOA. Again, like the Internet, SOA will become a sine qua non to participate in your network, your industry, and the overall economy.

Remember, SOA is an investment in flexibility. Any good business strategy involves flexibility, and SOA, because it liberates the full potential of your IT by making it modular and more flexible, is at the enabling core of that strategy. I guarantee you that if your enterprise, no matter the size, isn't thinking about how to do SOA today, your competition is - maybe not your largest competitor now, but your future industry leader.