RealTime IT News

The Business of Web Services

Despite the heavy marketing blitz by Web services providers ... or maybe because of it ... corporate America doesn't seem quite ready (or even prepared) for the many applications and processes the technology will bring to the table. While the interest level in corporate IT rooms across the country are at all-time highs, many managers are still determining what framework, platform and service best suits their organization.

The marketing hype is one of three challenges developers, corporate IT managers and Web services providers will need to address before the promise of the new technology is realized. In addition to overcoming hype, Web service providers and standards bodies like the Worldwide Web Consortium are going to need to resolve questions like interoperability and security.

Fred Hoch, eBusiness division director for the Software & Information Industry Association, said a blizzard of standards, frameworks and platforms has created confusion, making decision-makers wary of any new Web service.

"The hypes of the past few years have forced corporations to be skeptical of any new technology, so thereby you put a lag in the development of new Web services because people are so skeptical," he said.

Hoch believes industry-wide adoption will come in the next three years, as companies build up a level of trust in the technology. Like others, he thinks businesses will first use Web services to integrate systems internally (on what was formerly thought of as the "intranet") before any business processes are rolled out beyond the firewall.

He's not surprised by the skepticism in the IT world, which he said is slowing down an inevitable process: putting the workplace on the Internet in a manner that is so streamlined, so free-flowing that it is revolutionary.

As such, the most obvious opportunity for businesses to immediately capitalize on (aside from selling the various developer platforms and tools like Microsoft, Sun Microsystems or other software vendors) is the systems integrator. And one company that has jumped in head-first is webMethods , of Fairfax, VA. Scott Opitz, vice president of strategic planning, expects commercial interest in the industry to explode, once companies get past the hyperbole and conflicting information.

"This has really been an overnight phenomenon," he said. "The interest level right now is high, (though) most are in the fact-finding stage. Customers are pretty wise to the conflicting messages they're hearing."

"The reality is that there's no magic," Opitz continued. "Companies have to find what's most effective for their business and what requirements work for them."

As for standalone entities in the business of selling software components via web services, though, right now that revolution is on hold. And even staunch advocates predict that business model is a long ways away with companies and providers only now addressing how to make revenues from Web services.

"I think that's the question we have to answer soon," Hoch said. "We're at such an early stage with Web services as a model, it's really unclear."

For the time being, individual software components (no matter what the "killer app") serve no good until adoption of the platform occurs industrywide. Even then, components are viewed more as a luxury item compared with the mission-critical task of systems integration.

So what's holding back other viable business models? See Page 2.