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SOA (service-oriented architecture) is an architecture in which software is designed into functional units that provide services to other applications. The archetypical SOA application is a DNS that provides TCP name resolution to a variety of clients. The first reason that SOA is so attractive is that the internal applications designed following the SOA paradigm can be made external so that business customers can directly consume the services (as opposed to having to customize the applications for each customer).
Second, there tends to be significant redundancy of operations in an enterprise. For example, the same personnel information is required for HR, security and other applications. The personnel information could be standardized and consumed by all applications. Microsoft's Windows Live ID is an example of this - it is an account that can be used to log on to a variety of Microsoft services and can also be extended for third party providers. The advantages of SOA are that it creates efficiencies in writing software, and software written with the SOA paradigm can be written once and sold to a multitude of clients. In turn, this distributes the cost of writing software for a multitude of clients.
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