The Open Market

The Adaptive Enterprise requires an open market based IT infrastructure that facilitates "reusability", "flexibility" and "replaceability"

It is not the strongest of the species that survive, nor the most intelligent, but the one most responsive to change. Attributed to Charles R. Darwin (1809-1882).

Given the well known IT labor skills shortage, business has always been concerned with building cost effective software applications. The Internet has created yet more pressure by enabling global competition.

In today's evolving new economy, building an organization for speed that can easily adapt to change at reduced risk is the challenge facing businesses everywhere. To remain competitive and to successfully manage evolution and change in their business processes, companies are having to shift (1) from developing large inflexible monolithic applications and adopt supportive open component-based IT architectures where "flexibility" and "replaceability" are the two important goals of an overall application development strategy.

Reuse Before you Buy before you Build™ - The open market for reusable "off-the-shelf" software components

As organizations make the shift to component-based development (CBD) to speed up their application time to market, they need to consider a best-of-breed approach for their development effort and decide:
a) which internal component assets they can reuse,
b) which components of their application they can buy "off-the-shelf" and,
c) which components they need to build from scratch - an approach known as "Reuse before you Buy before you Build".

Industry studies suggest that applications built using reusable components can be assembled with 40% less resources (2).

Developers will deploy reusable "off-the-shelf" components where it makes sense for the development effort, that is, where deploying "off-the-shelf" functionality saves an appreciable amount of time and resource.

The demand for "off-the-shelf" expertise has never been higher. Reusable "off-the-shelf" software components, written by experts, comprise reusable code that you don't have to write, saving time, money, and reducing risk.

The open market for reusable components in fact offers a successful model for reuse - the ability to buy and reuse pre-built expertise. Everyone - even software developers - admit that they do something i.e. write a program or subroutine, better the second or third time around. This is the essence of a "component," an encapsulation of business logic or technical functionality that is built and continuously improved by an expert or organization. By buying a component "off-the-shelf", a developer can add functionality to an application without sacrificing quality. Quality should in fact improve, as the component will have gone through several iterations and enhancements.

Billion Dollar Market - The writing on the wall - No turning back

The open market for reusable components really started taking of in 1995 with Microsoft (COM) technology components. Since 1998 we have seen the growth of Java based components. .NET/COM and J2EE/Java are the most prolific component models, followed by VCL and CORBA.

The move to component-based development has steadily spurred the growth of the application server market. Today there are a large number of mature componentized platforms to support component-based development on an enterprise level. Over the past year and a half, all major IT vendors have announced further support for component-based application strategies. The widely touted concept of "software as a service", further maps out the future role of software components as "services" that may be called over the Internet. From Microsoft's .NET, HP's eServices, Oracle's eSpeak, to Sun Microsystems' Sun ONE strategy, the importance of software components to application development is clearly defined.

Market sizing research by various industry analyst groups predict that the open market for reusable "off-the-shelf" software components will be massive, creating extensive opportunities for Independent Software Vendors (ISVs) and corporate software developers to gain further return on investment by placing components they have built internally onto the open market.

"Software components are playing a major role in the eBusiness platform. Worldwide revenue in this market will increase at a compound annual growth rate (CAGR) of 40%, from $516 million in 1999 to $2.7 billion in 2004."
Source: IDC, The Software Construction Components Market, 6/2000

"By 2003, 70 percent of new applications will be deployed as a combination of pre-assembled and newly created components integrated to form complex business systems"
Source: GartnerGroup, Component-Based Development: The Next Wave, 4/1999

PriceWaterhouseCoopers Graph

The PwC research uniquely quantifies the total value of the open market for software components over time. Predicted growth rates for the next eight years indicated in the research follow:

"The market for "off-the-shelf" software components will be worth more than $1 billion by 2002"
Source: Franchee Harmon, PricewaterhouseCoopers (PwC), 1999

ComponentSource - Pioneers of the open market for reusable components

The open market for reusable components is supply driven. Today through ComponentSource, there is an ever-expanding supply of 1,000's software components listed in over 100 different categories available on the open market. Many thousands more are needed to achieve critical mass and meet market demand.

Founded over half a decade ago in 1995, ComponentSource is a global eBusiness and is the pioneer of the open market for reusable software components. Today ComponentSource is home to the world's largest business-to-business marketplace and reusable software component community for .NET/COM, J2EE/Java, VCL/CLX and CORBA. The company has assumed a market-building role since inception and has broken down the barriers for component publishers to enter the open market with their expertise (see Building Component Supply), and for organizations to readily adopt "off-the-shelf" components within their applications (see Aiding Component Adoption).

Through our approach of matching supply with demand and the extensive marketplace reuse services we offer, our user base comprising a half a million software developers in over 100 countries is able to "Buy Before They Build". Thus leveraging expert-built, standards based components - to speed up their time to market and stay ahead of the competition.

(1) "A long-term megatrend in the AD marketplace has been a shift from build (where all functionality is constructed in-house) to blend (where functionality is delivered by blending from a range of sources). Packages offered time-to-market advantages at the cost of flexibility, whereas development offers flexibility, but compromises time to market. Through 2003, enterprises will increasingly have the option to buy components in the form of business process components or aggregates of components in the form of application templates." - Michael Blechar, VP Internet & eBusiness Technologies, GartnerGroup, Ramco Value 2001 Tour.

(2) Source, META Group - Reuse Productivity by Donn DiNunno, September 2000
From the META Group series: IT Performance Engineering & Measurement Strategies: "Our research shows reused code averages 25% of the defects found in new code, and reusable components enable the final product to be delivered 40% faster".

Highlights:
  • ComponentSource has undertaken a market-building role growing component supply and aiding corporate adoption since 1995
  • Click on our company timeline to trace the evolution of this market over the past 6 years
  • Industry research indicates that the open market for reusable software components is a billion $ market
  • ComponentSource's user-base of a half a million corporate developers is reaping the advantages of "Buy Before You Build" today
  • Organizations that ComponentSource has brought to market with their components include: EDS -Engineered Business Components in 1999; IBM 1999