Are web services all hype? Leading analysts addressed the issue at
a meeting last week. Cliff Saran reports
Web services are set to provide users with a standard way to link
IT systems together through enterprise application integration.
That was the consensus at a roundtable discussion of the role of
web services in business organised by BEA to tie in with the launch
of Web Logic 8.1 this week.
Referring to the industry hype, Milind Govekar, an analyst with
Gartner, said, "Web services have been positioned by the industry
almost as the solution to world hunger."
Gartner estimates that one third of web services suppliers will
disappear over the next few years. The ones that are likely to
remain include BEA, IBM, Microsoft and Oracle. Although there will
be other companies selling web services infrastructure products,
their focus will be building links to enterprise applications.
The analysts said they do not believe any product will ever provide
users with off-the-shelf web services. Generally, such software
would provide about 70% of the work needed to integrate a user's IT
system, but the remaining 30% would involve costly consulting
services.
Luis Leamus, an analyst with Meta Group, said, "If you have a
dominant application in your organisation it does not make sense to
purchase a [third-party] application integration suite." Companies
such as SAP, with its xApps integration technology, and Siebel's
Universal Application Network, offer integration tools geared
towards existing users.
Rather than using web services to optimise outward-facing business
processes, the panellists agreed that the main focus for suppliers
would be to offer IT departments a standard means of reducing the
complexity within their infrastructure. They said the technology
can eliminate much of the "spaghetti code" that firms use to link
applications together.
But in terms of business-to-business IT integration, Martha Bennett
of Giga Information Group said, "The airline industry has shown
with the Amadeus system what can be achieved with a system that is
integrated across the globe."
Bennett said the problem, at a time when IT budgets are being cut,
is that integration is notoriously expensive. "How do you justify
any spending on IT integration?" she asked.
The good news for users is that IT suppliers are being squeezed and
costs are tumbling. Leamus said the cost of IT integration using
web services is dramatically lower than a few years ago. "The
average deal two years ago was between c1.5m and c2.0m (£1m-£1.4m)
but today it is between c350,000 and c400,000," he said.
Leamus' advice is to look at what level of integration is needed to
achieve a business objective. "System-to-system integration is
expensive; system-to-people integration is cheap," he said. In
other words, if people within the business can be encouraged to
adapt their working practices, an IT director does not have to
embark on what could turn out to be a costly integration
project.
Govekar provided an example of where this has worked in the real
world. "AT&T recently consolidated all its call centres through
a single portal, providing a single point of contact for its
customers, for just $100,000 [£63,000]."
For an organisation the size of AT&T, that represents a very
small expenditure to achieve a clear business benefit in terms of
handling customers effectively.
Clearly there is some substance behind the industry buzz about web
services. The experts see them as one of the developments a
business-savvy IT manager can use to show how technology can take
costs out of the business and enable it to get product to market
quicker.
Users will have to spend money to save money, so they must make
sure there is a watertight case for return on investment.