Web Services Gather Converts Are You Listening?

In the biblical story of the Pentecost (Acts 2), the Apostles address a crowd composed of people "from every nation." Despite the fact the Apostles are from Galilee, everyone present hears their message in his native language and is inspired to take action. Some analysts and developers believe Web services will do the same for disparate software applications. A standards-based protocol for Web communications, Web services provide diverse systems with the ability to understand and interact with each other. According to an Evans Data Corp. survey, Web services are a top developer concern, with 78% of respondents planning to implement a solution by 2004. Forward-thinking software developers like Diamelle Inc. (Cortlandt Manor, NY) aren't planning to wait that long. "We were seeing some initial trends in the amount of momentum that was generated as Sun, IBM, Microsoft, and all the other major companies supported Web services," says Suneet Shah, CTO of Diamelle. As a result, Diamelle integrated Web services functionality into its product line earlier this year, and beta sites will likely go live this summer. Shah believes the challenges of being an early adopter of Web services are outweighed by the potential competitive advantage for his 25-employee company.

Instead of a miracle, Web services architecture is based on open standards such as XML (extensible markup language), UDDI (universal description, discovery, and integration), SOAP (simple object access protocol), and WSDL (Web services description language) and is process centric. In other words, it is designed to make things happen, automating processes between disparate systems. (Business consulting and advisory firm The Stencil Group offers a Web services tutorial at www.stencilgroup.com/ideas_scope_200106wsdefined.html.) Many commonly used software products already support XML and other open standards, so integrators can often incorporate existing technology investments into Web services solutions. In a climate of conservative IT spending, the opportunity to increase efficiency without replacing an entire system is an attractive option for end users.

Web Services Promise Easier Integration, Greater Enterprise Visibility
Diamelle offers component-based software suites to end users, VARs, and ISVs (independent software vendors) that are intended to help foster application development. The small, well-defined components, encompassing everything from e-commerce to document management, are linked with small code snippets. This design is intended to help get to market quicker and offer a viable option for midsized companies because of price point, scalability, and integration capabilities. According to Shah, these goals fit perfectly with the promise of Web services. "Using Web services, we can expand outside a defined application and create a level of integration between systems," says Shah. Initial feedback from his channel partners indicates that reducing the time and complexity of application integration is a key selling point. For instance, one integrator plans to use the functionality to link a Java-based call center application to a .NET (Microsoft's framework for Web-based services and software) infrastructure, a project that would have previously required exponentially more programming complexity.

However, Shah emphasizes that integration is just one level of the Web services advantage. The other is that it opens up back end systems to actual interaction with other applications. For instance, in a manufacturer/supplier relationship, an ERP (enterprise resource planning) application can be made visible to preferred customers. The ERP system could place orders, query shipping dates and availability of raw materials, and perform other functions without human intervention. If the supplier's system has access to the manufacturer's, it has the ability to better serve its partner's needs, being able to anticipate rather than just respond to a purchase order for instance.

Early Adopters Buy Positive Customer Perceptions
For a company the size of Diamelle, the early adoption of Web services also marks the opportunity to make a name for itself. "Most companies will tell you they have a road map for incorporating Web services, but we can show our customers that we are already on that road," comments Shah. "Since many of them may not be ready to actually implement Web services, it's really about buying mind share." The competitive advantage of being considered leading edge could be enough to differentiate Diamelle from other companies, even if the customer isn't ready to make the move to Web services yet. Most customers want to know that a software investment will be able to adapt to emerging technologies when they are ready to make the move.

Shah believes Web services will appeal to existing customers as well as open up new markets for his products. He believes vertical markets like finance and insurance, which tend to be tech-savvy, will be open to the message of automating processes with Web services. For example, a hospital might reach an agreement with an insurance carrier to automate processes between their two systems. This would decrease labor required on both sides and speed the processing of claims by entering it into the carrier's workflow immediately. Because Diamelle began in 1982 as a consultant in the financial services industry, it has a strong customer base to which it can market this new functionality as well.

Other customers who have struggled with interoperability and integration issues could be strong prospects for Diamelle and its partners. For instance, Shah believes ASPs (application service providers) will find the promise of Web services attractive. Potential ASP customers could run a virtually unlimited number of applications in-house which they wish to integrate with the hosted solution. A Web services capability could make it easier for ASPs to accommodate customer needs more quickly and with less strain on internal resources. In fact, Web services may be a boon to the struggling ASP market. In a May 2002 report, Hurwitz Trend Watch says large ISVs like Siebel may lose business to ASPs like salesforce.com because "a sales manager who wants 90% of the functionality at 10% of the cost can integrate an outsourced app with the back end CRM [customer relationship management] app using a SOAP interface."

Developer, Train Thyself
With few fully operable applications and no clear road map for industry adoption, one of the major challenges to incorporating Web services may be the lack of formal training. Diamelle opted to take a hands-on approach and let the developers explore the new functionality themselves. Diamelle licensed tools from Systinet Corp. (Cambridge, MA) to add a Web services layer to its existing suite of more than 90 components. Shah says his developers' expertise with XML made the process significantly easier. However, fully embracing the product and related technology virtually monopolized a portion of the company's resources for a couple of months.

"We got the software and spent the time learning," says Shah. "We tend to be in that situation often. If you're building something new and trying to stay leading edge, there's not a lot of formal training. As a result, there's no avoiding the time you have to spend to pay your dues." Diamelle placed the highest priority on various basic features and functions. Then developers learned how to set up the environment and deploy the Web server. After that, they applied the knowledge to the priority list, beginning with the simplest component and the simplest task to get some constants. Eventually, they took on increasingly complex tasks, testing at each step.

As Web services become more familiar to and accepted by end users, Diamelle is likely to have a significant competitive advantage by employing developers who have mastered Web services. Developer training is lagging at most firms, says Hurwitz Trend Watch. Of 300 IT buyers and suppliers surveyed in the first quarter of 2002, more than 1/3 have no plans to train employees for Web services development. Less than 20% are currently offering training to their employees. VARs who have Web services developers will be well positioned to take advantage of what may be a very lucrative market.

Web Services Security Still An Issue
One significant issue the Web services industry must still address is security. After all, exposing valuable corporate data and processes could make them more vulnerable to being compromised. "The security models are very different, and there seem to be several competing standards right now," comments Shah. "The various standards will eventually flesh themselves out and we'll see some evolution. It will only be an issue for a year or two and later it will be a moot point." Shah and other savvy integrators will be monitoring the activities of standards organizations such as the World Wide Web Consortium (W3C) (www.w3c.org) to see which standards are gaining acceptance.

Fortunately, it appears that initial Web services implementations will be used for small internal pilot projects, says Shah. This will offset some security concerns temporarily until companies begin incorporating outward-facing solutions for trusted partners, which Shah believes will happen over the next 12 to 18 months.

Web Services: Miracle Or Mass Hysteria?
According to the Pentecost story, cynics mocked those who believed in the "gift of tongues" and accused them of being drunk. Web services face a small but vocal group of naysayers as well. Some have questioned whether the unproven technology can address real-world challenges such as defining universal standards. Others question whether Web services will really deliver ROI, with one analyst going so far as to call it "a technology looking for a problem to solve."

Most analysts, however, believe Web services will generate substantial revenue over the next several years. Gartner Dataquest's prediction is that Web services solutions will represent a $30 billion market by 2005. Equally optimistic, analyst firm IDC is estimating $34 billion in Web services software, services, and hardware sales by 2006. Regardless of what kind of solutions a VAR provides, the message of Web services could be very good news indeed.