Red Hat Delivers JBoss Enterprise SOA Platform 4.3 to Help Enterprises Weather the Storm!

The Panic of 2008


Rogue Waves are spontaneously generated large waves that may appear suddenly even on a calm sea, surprising ship crews that may be in their path, and wreaking havoc and destruction.


Black Swans are a rare type of swan mainly found in Australia. The term, black swan, has also been applied to rare events that suddenly and unexpectedly occur. Black swans in business have been popularized and described in depth by the book Black Swans: The Impact of the Highly Improbable.


The financial oceans have been quite turbulent with rogue waves and the sky filled with black swans over the past year and especially over the past weeks. We've seen a ongoing real estate crash spread to a number of markets around the world (See The Housing Bubble Blog). We've had credit markets deteriorate over the past year and accelerate in recent weeks as market participants realize that the real estate bubble and bust are much larger than previously thought. We've seen banks reel and be bought or go out of business. I personally saw a physical bank run 11 days ago at my bank with the line out the door here in Atlanta. Electronic bank runs have been rampant.


Recalling the stories of the 1930s my grandmother used to tell me when I was a child was chilling during some of these events of the past weeks. Heck, didn't we learn anything? (I guess not). Weren't we “smarter” than they were? (No...maybe not even as smart). Didn't real estate “always go up” and we'd all be rich just like they said on various home TV shows? (Having lived through the real estate crash of the late 1980s in Austin Texas, the short answer is NO).

JBoss Enterprise Middleware Delivers Enterprise SOA


What does this have to do with open source SOA? It's quite simple. We live in dramatically turbulent times. And the turbulence is not going to end soon. More on that below. SOA is an architectural approach to designing IT systems to automate business processes with greater agility and flexibility enabling a business to be responsive to rapid change. Seems like larger doses of SOA-enablement with accelerated project schedules will be forthcoming by enterprises that will survive these times and even prosper. SOA will give them competitive advantage by allowing them to respond to new customer requirements and differentiate their products and services faster than competitors locked into a stove-piped application strategy.


However, many enterprise IT budgets may be cut. IT organizations won't be able to fund projects based on complex, hard-to-develop-to and deploy, and expensive SOA Platforms. They will have to do more with less as we've seen earlier this decade when open source came to the rescue at the operating system and application server level. This time, JBoss offers the simple, open and affordable JBoss Enterprise SOA Platform that is ready and able to deliver on your enterprise integration and process automation needs. Open source SOA, battle hardened in the worldwide open source community and in an increasing number of enterprise deployments, is the ideal platform to gain competitive advantage with during these challenging times.


I was talking with one of our major financial services customers, a major American bank a couple of weeks ago as the "Panic of 2008" (We used to call them “Panics” in the 19th century) was getting underway in earnest. They've taken their lumps and face smaller budgets with demands to make the business more agile and cost-effective. They also are looking beyond this crisis by preparing the business to exceed customer expectations in service and product offerings with open source SOA deployments built on JBoss Enterprise Middleware. They are finalizing two significant deployments centered on the JBoss Enterprise SOA Platform and then will take their experience and look to expand the use of JBoss Enterprise Middleware for more SOA projects. We are excited to be working with them!

Looking Ahead


So as we deliver JBoss Enterprise SOA Platform 4.3 to help businesses weather and prosper through this financial storm, what are we likely to see? While I cannot know for sure, of course, I can draw upon my experiences living through several other manias and busts including the oil boom and bust of 1973-86, gold and coin boom and bust of 1978-82, Austin real estate boom and bust of 1983-92, stock market boom and bust of 1996-2003 and the real estate boom and bust of the late 1990s till sometime in the next couple of years when we will see the "bottom".


Since this is a real estate bust, I'd offer the following...

  1. This is probably not going to be like the Great Depression of the 1930s.. It seems more like the Panic of 1893 substituting real estate for railroads. Or it could be like the Japanese "Lost Decade". We hope not, but the similarities are striking.
  2. Real estate prices will bottom out when prices fall to less than 120x monthly rent. Additionally, rents will decline in overbuilt areas as well as in many resort areas. In some exurb and suburb areas the price of a house, town home, or condo may overshoot this 120x level down to 80x monthly rent (We saw this in Austin 20 years ago). 120x monthly rent is the approximate value of a house that makes sense as an income producing asset. This valuation brings typical mortgage payments in line with rental costs. Residential real estate valuations much above 120x monthly rent are generally speculative in nature and not sustainable over the long term. There are a few exceptions, such as a historical 1890s Victorian “grande dame” house fully restored and in a great location that would be worth more. Or picture perfect houses in a close-in “street car” neighborhood like those built in the 1920s and 1930s that is highly desirable may continue to command a premium due to scarcity of supply. Another way to look at it is that buying a house will become cheaper than renting one including allowing for all maintenance expenses, taxes, home owner association fees, etc... (In some areas homes may actually be nearly "free").
  3. This ongoing deflation will create more stress on the financial systems around the world challenging most enterprises and value chains. Agile companies that delight their customers with innovative products and services that are also value leaders will be in the best position to prosper and take market share. We will see a lot of turbulence in both the credit markets as well as in the regulatory environment which will convey competitive advantage to those enterprises that are prepared. SOA-enabled IT will be key to that preparation. For example, an enterprise that has its business rules in JBoss Rules and made available to the business and its partners and customers through the JBoss Enterprise SOA Platform will have a great advantage over those who have their business rules locked up in stove-pipe web applications.


While there is pain, there will be great opportunities to build the next generation of great companies of the 21st century out of this turmoil. With JBoss Enterprise SOA Platform, we aim to help our customers become part of that community of leading enterprises in the coming years!


The JBoss Enterprise SOA Platform 4.3 is planned to be available by the end of October. Also, please visit the JBoss SOA Resource Center and try out our new JBoss SOA Assessment Tool to start paving your way to the new business opportunities of 2009 and beyond!