By Laton McCartney
Maybe you haven't noticed, but in recent months the growing phenomenon known as Web services has gained considerable momentum. Indeed, this new technology wave has been picking up speed on several fronts.
For starters, a number of consultancies and other professional services firms are now beginning to strike alliances with Web services providers, adding Web services tools to their portfolios and gearing up to compete in this new arena. EDS, for instance, is working with Microsoft to deliver IT solutions from consulting to integration using Microsoft's Web services platform, .NET. Accenture, which began moving into this market well over a year ago, has developed a complex applications set that it has already begun to deliver. "We've begun to roll this out to clients and have beta projects up and running on it," says Michael Condon, an Accenture partner, communications and high technology.
With all the vendor drumbeating and the attention Web services have received in the trade and business press, potential clients and customers for these offerings have by now gotten pretty much up to speed regarding what Microsoft's Bill Gates has described as a "new computing model that enables a standard way of building applications and process to connect and exchange information over the Web."
"A year ago when we started talking to our clients, I would really have to explain what Web services were," says Condon. "Today I go in and start talking about Web services and everyone knows exactly what they are."
"Customers are at the point now where they're asking a lot of very specific questions," says Bob Wegener, national director of solutions, RCG Information Technology, Inc., an e-business solutions provider and consultancy. "They want to know how Web services impact EAI (enterprise application integration). The B2B companies are interested in using Web services to get rid of middleware. Everyone has a different take on the subject." Not only are customers today quickly becoming savvy about this rapidly emerging technology, but a number of the more adventurous major global companies have already signed on for services. As an example, manufacturer Eastman Chemical announced in February that it had chosen Web services provider Grand Central Communications to provide the enabling network for distributing and managing Web services with its partners and customers.
And recently Deutsche Telekom, the largest telecom company in Europe, said that it would be working with Microsoft to offer Web services across its mobile and solutions business. Similarly, the Royal Dutch/Shell Group is using IBM's WebSphere as a means of generating Web services–based operational reports.
Typically, early adopters are companies that have a commodity product like oil and gas — or in the case of financial services, money — and have a lot of interrelated interests, Condon says. As might be expected, IT management is taking the lead in assessing these service offerings. A recent Morgan Stanley Dean Witter survey of corporate CIOs indicates that 60 percent of the respondents are presently evaluating Web services. Meanwhile, Gartner is projecting that the market for Web services software and middleware products will reach $28 billion in the next three years.
Condon claims that Accenture is also getting inquiries from the business side as well. "They are asking how they can use it to improve the operations side and cut costs. There are even some forward-thinking clients that are moving to use Web services to bundle and create new products."
Probably the most important recent development in this fledgling market, however, is that the two biggest technology vendors as well as dozens of other major players are currently working together to smooth the migration to Web services.
In February, rivals IBM and Microsoft, which rarely agree on anything, and seven other founding members including Accenture, BEA Systems, Fujitsu, and Hewlett-Packard, formed the Web Services Interoperability (WS-I) organization, an industry consortium aimed at resolving remaining standards issues and furthering customer education, awareness, and adoption of Web services offerings. Within a few weeks, WS-I added 55 industry vendors and reported inquiries from hundreds more.
"The momentum of vendors and the cross-industry commitment behind WS-I demonstrate that the Web services community is maturing and focusing on customer needs," says Rod Smith, vice president of emerging technologies, IBM. "WS-I will speed the worldwide adoption of Web services by providing critical interoperability guidance and testing materials that work across multiple platforms."
With the formation of WS-I, says Gary Steele, CEO of Web services provider Portera Systems, "a lot of the thinking by industry leaders such as IBM and Microsoft as to what standards will look like is coming together. As a result, the buyer of Web services sees an industry momentum that is coalescing."
And the fact that bitter rivals IBM and Microsoft are seemingly in sync in promoting Web services interoperability represents a compelling argument that these new tools and platforms may be ready to take off. "With both IBM and Microsoft getting into it, people are beginning to think that Web services are for real," says Wegener.
Benefits All Around?
Obviously, it's still far too early in the game to determine whether Web services can even begin to deliver on the heady expectations that have been set for it by the vendors, industry, and pundits. Clearly, though, even if this turns out to be an incremental technology shift rather than the next big wave, professional services firms stand to gain on a variety of counts.
While Web services greatly facilitate systems integration, customers are still going to have to use professional services firms To-Do integration. "It will also provide consultants with a wider palette of tools, processes, and standards for integration. This means that professional services firms can work faster, cheaper, and better, which will mean better margins," says Dana Gardner, research director, Aberdeen Group.
There are also ample opportunities for management consultants here, since Web services is being considered for business process, reengineering, and work flow initiatives within the enterprise as well as among a group of companies that work together. "That's why I'm not surprised that Accenture has moved so aggressively in this area," Gardner says. "You also have EDS and IBM positioning themselves at the forefront of Web services. IBM discovered several years ago that Java was a great way to tie together products. Web services provide the same benefits — that's why IBM got behind it."
Adds Portera's Gary Steele, "Web services create a lot of service engagements and opportunities for consulting companies, whether it's at the strategic level for management consultants or at the IT consulting level where people can go out and help implement a solution."
One other potential and important benefit: Once Web services are installed, they can function as a utility, generating a consistent revenue stream. For consultancies seeking financial stability in a volatile marketplace, this can represent a major plus.
Remaining Pitfalls
Despite the recent advances, there remain some significant barriers to surmount before Web services can really begin to have an impact. Security remains a paramount concern, especially for companies that plan to open their systems to external business software and therefore may prove vulnerable. Obviously, in such an open environment a hacker or fraudulent Web service could wreck havoc.
In addition, some early Web users have expressed concerns about what they perceive as a lack of built-in security in one of the key Web services protocols, known as SOAP — especially in large-scale usage.
To complicate matters, two camps have emerged to provide security for Web services transactions. Microsoft is providing .NET Passport, which allows users to create a single user name and password that can be used to access multiple sites and services on the Net. Last year a competing organization, the Liberty Alliance, made up of Sun Microsystems, HP, Nokia, Citigroup, and over 40 other companies, came out with a similar sign-on approach for both consumer and business users. The result: Potential users are now confronted with disparate security approaches.
Until some of the security issues are resolved, it's unlikely that Web services use will extend much beyond the individual enterprise. "Their initial use will be limited to behind the corporate fire walls," predicts Wegener.
Wegener notes as well that there are some major holes that need to be filled in terms of the applications being developed for Web services. "There's a big gap with transaction management, for example," he says.
Condon concurs. "Some big gaps remain in terms of the products out there like guaranteed message delivery, transaction management, load balancing — the high-volume, critical apps that you have to have."
The big vendors are rushing to build products to address these openings, as are a number of start-ups including Flamenco Networks, Grand Central, and Primordial. "It's only a matter of time before the gaps are filled," Condon claims.
That may prove to be the case, but even as Accenture, IBM, Microsoft, and the other charter members of WS-I move to get all the Web services players on the same page, Sun Microsystems has come out with its own Web services integration framework. Concerned that — as Sun CEO and president Ed Zander puts its — Microsoft with .NET may do to the Internet what it did to the desktop with Windows, Sun is using a Java-based approach aimed at the wireless Internet market, where Java is in far greater use than .NET.
Users' Choice
Long-term, Sun's divergent approach, which is backed by other Java supporters such as Oracle, may prove a boon to Web services users. For now, though, it further complicates an already highly complex and as yet unproved market.
Ultimately, of course, it will be the users that determine the extent to which Web services take hold. And right now the bulk of them are still kicking tires. "They are saying that this is neat technology, but I have real live problems I need to solve, and how is Web services going to solve them?" Condon concedes. "Is this just another good idea or is this like client/server technology — something that really did change our computing?"
While users ponder that question, at least some professional services firms are gearing up to catch the incoming wave. How those firms position themselves for Web services today will significantly affect their long-term ability to capitalize on this market opportunity, a recent Web services study by International Data Corporation indicates.
Sidebar: A Web Services Scorecard
Here's a look at some of the key players in this emerging market and their strategies and offerings.
IBM
IBM is banking on its WebSphere Internet infrastructure software in its effort to dominate the Web services market. To date it claims that nearly 50,000 companies worldwide rely on WebSphere, which last year held a 34 percent share of the e-business middleware market, putting it neck-and-neck with BEA's middleware.
Microsoft
Microsoft is betting the farm — along with the bulk of its $5 billion annual R&D budget — on .NET, its XML (Extensible Markup Language) platform. "We think that this software will usher in the business revolution that's been talked about for many years," Bill Gates recently told a gathering of software developers. Microsoft also recently announced Visual Studio.NET, the application development tool for .NET applications.
The software giant has recently signed on a number of major customers, including Citigroup, that intend to implement third-generation Internet applications using .NET.
Accenture
Accenture has been aggressively pursuing the Web services market since more than a year ago, when it came up with the idea for a platform tool for complex applications. "We went to Microsoft with this idea, and the Microsoft guys said, 'This is fantastic — just what we've been looking for,'" says Accenture partner Michael Condon. "Early on, we saw how it fit into Microsoft's strategy." After entering into an alliance with Microsoft, Accenture has been evangelizing the benefits of Web services and .NET to its clients.
Sun Microsystems
By its own admission, Sun lagged behind Microsoft and IBM in defining and articulating its Web services strategy. Now it is playing catch-up with its SUN ONE platform and the Liberty Alliance Group that competes with Microsoft's Passport authentication technology.
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