Optimizing the Supplier Selection and Service Portfolio of a SOA Service Integrator

The service-oriented architecture (SOA) paradigm promises to enable software vendors to compose software systems using services purchased from various suppliers. In this paper, we analyze the impact of the SOA paradigm on the structure of the value chain in the software industry. We consider a new actor, the SOA service integrator (Sel), who integrates services from various suppliers in his portfolio in addition to own services in order to be able to fulfill heterogeneous functionality requirements of customers. His decision problem of selecting suppliers and deciding which services to integrate is modeled as a linear 0-1 programming model with a profit maximization objective. The model incorporates service make-or-buy decisions, and considers various cost types, namely the costs of establishing supplier relationships, integrating and using services. Based on this model and generated test problems, we analyze the optimal supplier selection and service portfolio under various cost scenarios.