Chapter 2. Web Services

"As a result of the changes in how businesses and consumers use the Web, the industry is converging on a new computing model that enables a standard way of building applications and processes to connect and exchange information over the Web."

Bill Gates, Microsoft

Web services are currently the most promising "next new thing" in the software industry and are starting to gain some visibility in the business world as success stories from the pioneers and early adopters become known. Web services promise to usher in a new evolution of computing with impacts for both business and technology strategies. The technology enables business services, including applications, information, and tasks, to be exposed as software services running on the network. These network-resident services can be published and subscribed to by other such services running over standard Internet protocols and open standards. The potential business benefits of Web services include the opportunity to enter new markets via new service offerings, increased business agility, improved competitive advantage, and migration toward the virtual enterprise. Increased business agility is enabled because Web services enable software components to more easily talk to one another across disparate operating systems and programming languages. Migration toward the virtual enterprise is enabled since businesses now have a powerful and standardized mechanism by which to unbundle and expose their business functionality and business processes as software.

Over the past two years, Web services have captured the imagination of the broader software community, venture capitalists, analysts and media, and the general business community. This buzz of activity has surrounded the continued development of standards, the launch of new Web services platforms and development environments, and the activities of both the "big five" vendors namely Hewlett-Packard, IBM, Microsoft, Oracle, and Sun and a number of new entrants such as Bowstreet, Cape Clear, and Grand Central Communications. Another landmark event was the announcement of the Web Services Interoperability Organization (WS-I) in early 2002. The organization is chartered to work "across a number of standards organizations to respond to customer needs by providing guidance, best practices, and resources for developing Web services solutions." Thus far, with a few notable exceptions, the mainstream business community has been content to observe, learn, and perform some initial, internal proof of concepts and low-risk deployments. One of the challenges for the business executive has been to determine what exactly Web services are all about and how, when, and where they should be applied within the corporation.

With so much activity going on in the Web services arena in terms of standards, applications, business models, and new entrants, it is worth taking a look back to see how this area of the industry has evolved, almost under the radar in some cases, and is building a new value chain among industry participants. By understanding this new value chain, the business decision maker will be able to understand the angle from which various software vendors are attacking the space and where they fit in terms of providing business solutions. It will also help to reveal some of the current gaps and white spaces in the current form of the technology which may impact the timing of business adoption.