The Truth About Web Services

Even the title of the seminar,"Web Services: Another Serving of Hype, Or Something That You Should Care About?",explains the problem. "It's not when, but how. It all depends on what you want to do," says Cesar Brea, senior vice president of sales and marketing at New York-based Razorfish.

And that may be the ultimate problem. Web services holds so much promise and potential that it's hard to figure out what to do first. The IT industry, like the Hyperlink seminar, is brimming with activity and anticipation, but many are confused about how to leverage Web services, either as a customer, VAR or vendor.

"Why does this still feel like hype?" asks an audience member during the Web-services discussion.

Because it is hype, the panelists explain. Brea, along with Seth Miller, president and CEO of Miller Systems; Mark Israel, chief architect at OneSource; and Bob Familiar, .Net architect at Microsoft, try to balance the excitement of Web services with actual value and opportunity. That's not easy, given the broad definition of Web services: a method that allows applications to dynamically interact with other disparate applications via open Internet standards such as XML, SOAP and WSDL.

Even the definition makes it all the more difficult to sell Web services. "It isn't a shiny box with three buttons on the front, so it's not that discrete a purchase," says panel moderator John Francis, CEO of Boston-based solution provider ReadyAbout Interactive.

Many of the questions surround the very nature of Web

services. Is it a software product that can operate via the Web? Or isWeb services simply a set of languages and standards? Or is it a set of IT services? VARBusiness took these questions and more to the panel members, as well as other vendors, solution providers and analysts to unwrap Web services. And, in its 2002 State of Technology (SOT) survey, VARBusiness asked solution providers a variety of questions regarding Web services to determine its place in the market today. The answers follow.

Nailing Down a Definition

The first point to clarify is whether Web services is a software product, a software language or a type of service. Actually, it can be all three. It's a practice that incorporates open standards and uses them as a sort of universal translator that reduces or eliminates proprietary boundaries for disparate software and systems.

If you're Microsoft, Oracle, BEA Systems or IBM, you can sell your middleware products equipped with Web-services capabilities. If you're a software developer or solution provider, you can use the open standards or vendor languages, such as Microsoft's .Net Framework or Sun Microsystems' J2EE SunOne, to construct Web-services systems.

Concord, Mass.-based OneSource, which provides integrated Web-based business information to clients, started deploying Web-services projects earlier this year, but interestingly, many OneSource users will probably never know it. OneSource provides information to clients in the form of a "consumable Web service," i.e., data based on Internet standards that clients can easily assimilate into their systems.

"We have a customer that takes the financial information and integrates the content right into their CRM system, and they have no idea that OneSource was ever involved," Israel says. "We're not going out and selling Web services. For our new customers, we're talking about integration components, connecting CRM to ERP to a sales portal."

Miller Systems, an 18-person IT consultancy firm based in Boston, specializes in IT services and Web design for midmarket clients. The company did a recent .Net implementation for Clean Harbors, an environmental-services firm, creating a news content-management system for the company's employee portal, based on the .Net framework. "They have a lot of news and relevant information they need to distribute," Miller says. "The .Net system is able to distribute business news, and it's integrated with their ERP system."

Molecular, a Boston-based solution provider, constructed a real-time, Web-based insurance-quote and policy-binding solution for a financial services customer built on Intel's Xeon platform for servers. While not exactly a Web-services solution, the system leverages the .Net framework in the underlying software architecture to offer reduced integration barriers and let users access the system online. Most of his company's work today revolves around Web-based applications and portals, says Darryl Gehly, Molecular's vice president of corporate development.

Show Me the Money

Naturally, solution providers want to know how Web services will offer them opportunity. SOT research shows that 69 percent of surveyed solution providers say application-development tools and Internet and Web-design tools have been the most frequently deployed or supported software for Web services in the past year. That may be a result of Web-services deployments being very much in the initial stages, thus putting a premium on the tools to develop the projects.

For the next 12 months, however, both e-commerce applications and content management shot up several percentage points in terms of planned deployment, the SOT survey reveals. As Web services mature, VARs will turn their attention from just the tools to build Web services to more complex e-business applications and middleware, according to the research.

For the most part, vendors and VARs seem to agree that collaborative software holds the most potential for Web services. "The applications that scream for Web services are those that involve three or more parties," Miller says.

Microsoft's Familiar highlighted B2B processes and portals as other key areas, and internal data warehousing and reporting as a major, often-overlooked opportunity for Web services. Breaking down integration barriers and freeing up data within an enterprise is extremely valuable, he says. "There are a lot of companies out there that have no idea how they're doing day to day," Familiar says.

Razorfish has implemented one such internal data solution. "We have a major pharmaceutical client that is expanding its internal data sources and enterprise reporting by simply publishing the underlying data in XML and consuming it internally as a Web service," Brea says.

In addition, some software vendors are already jumping on Web services to improve internal data exchange. Business intelligence software-maker Cognos recently launched its Web services platform to extend its Series 7 BI software suite into other platforms and environments. The platform is built around XML and leverages SOAP and WSDL to connect to both Microsoft and Unix environments. "It's a great technology enabler," says David Marmer, senior director of marketing and sales at Cognos, Ottawa. "It's going to help us with application-server and portal integration and gives us a flexible programming language."

But Web services isn't just about data exchanging or building Web-services middleware. It can also create robust presentation layers. Miller sees value in graphics and user interfaces as well. "Web services lends itself to graphics," he says. "What if you want a stock chart on a Web site instead of stock quotes? [Macromedia Flash MX may be right to present that data."

Ending a Myth

Another question that often comes up about Web services is whether an enterprise has to rewrite its entire software and infrastructure in a Web-services language in order to deploy it. For example, must a bank with a Microsoft environment move all its software from Visual Basic to Visual Basic .Net?

The answer: Absolutely not. It's one of the myths that has probably slowed down Web-services adoption. Application development is expensive and time-consuming,not a top priority for companies looking to cut costs. The great thing about Web services is you don't have to rewrite code or spend hours developing new applications based on the Web-services standards.

Familiar says some customers only need Web-services-compatible data, not entire infrastructures written in new standards and languages. "We're in the wrapping business," Familiar says. "We build XML wrappers for data in the .Net framework so that you don't have to rewrite the code of every application and migrate everything to Visual Basic .Net."

OneSource, for example, specializes in moving data to customers in a Web-services-based document that is easily integrated. "The simplest Web service you can provide is when someone requests information, and you send it back to them in a well-formed XML document," Israel says. "It's a simple interface."

Therefore, an enterprise can move data in an XML layer from IBM MQSeries to another proprietary system and publish the data easily. Some software vendors, such as Softricity, are specializing in Web-services conversions. The Boston-based software company signed a multiyear alliance with Microsoft to use Softricity SoftGrid 2.0, a software installation and upgrade automation platform, to move Windows-based applications to .Net.

In reality, few enterprises currently have the time and money to migrate their entire software architecture to a Web-services standard. "Very few customers are actually at the point where their pocketbooks and ROI justify a complete infrastructure rebuilt on Web services," Brea says.

The Pressure's On

The competition between Microsoft .Net and Java is fierce. The question is, which one will be left in the dust?

It's too early to declare a winner in the Web-services game. Java's developer community is enormous, and despite Microsoft's move to dump Java support, Java is much bigger than just Sun Microsystems. With premier vendors such as BEA Systems, IBM and Oracle behind it, Java will continue to grow. The pressure is very much on Microsoft to match with .Net.

Some analysts have lauded Microsoft's efforts and predict that .Net will be the dominant standard. Others, however, have found fault with Microsoft's initial phase of the .Net strategy. After all, Microsoft chairman Bill Gates himself gave the strategy a "C" back in the summer. Plus, the company pushed back its scheduled release of .Net Server this year to mid-2003, not a good sign.

Despite the criticism of .Net thus far, no one predicts it will fail. The key is that most software developers and vendors will support both standards, and very few will draw lines. Customers have the freedom to choose standards and, because of increasing interoperability, mix and match Java with .Net. In other words, you can have your cake and eat it, too.

Dollars And Sense

In the end, it still comes down to the bottom line: Will the Web-services market be a multibillion-dollar mainstream market in 2003? Opinions vary, even within analyst firms. Research firm IDC released two reports in September. In one report, IDC surveyed more than 750 enterprises; four out of five plan to implement Web-services projects within the next three years, with one in four already in progress. However, analyst Sophie Mayo

stated in a different report that the "Web-services-adoption rate is lower than one might expect," with just 4 percent of the U.S. marketplace achieving some level of adoption.

According to VARBusiness' SOT research, nearly 50 percent of solution providers surveyed say they are currently deploying or supporting Web-services software. But the number of VARs that plan to deploy or support Web services in the next 12 months actually drops to 48 percent. Adoption, it would seem, isn't quite there yet.

"I'm not even sure there is an actual Web-services market per se," says Yankee Group analyst Jon Derome. "Right now, Web services is a just a fancy marketing tool, and there's no intuitive value for the customer. But you can use these powerful new standards to make disparate applications work together better."

No one, however, is doubting the potential of Web services, especially for the channel. IDC also forecasts that Web services-related solutions will reach $453 million this year,and make an Olympic jump to more than $1.2 billion in 2003.

Long term, Web services will clearly have a major impact throughout the industry, and not just on the software. The shift of software as a service has already begun in earnest. The question now surrounds the distributed-computing model,not the boxes themselves, but how they operate across the Internet,and who will dominate the market. Web services will play a crucial role in how the tug-of-war plays out.

"I think everyone has conceded ownership of the desktop to Microsoft, and IBM owns the mainframe," Familiar says. "The distributed computing model is in the middle, and it's up for grabs."