The business benefits of Web services

Users stand to win cost cuts and efficiency gains from Web services, but only if they can manage the complex software...

Users stand to win cost cuts and efficiency gains from Web services, but only if they can manage the complex software relationships effectively

Web services have been around since the mid 1980s when people started to use electronic data interchanges to facilitate transactions. The emergence of the Internet and HTTP as the ubiquitous communications protocol has rekindled the promise of truly open communication and interoperability between applications.

This time the promise is of a new magnitude. An ultimate scenario is being painted of companies and consumers seeking applications or services on the fly that they can use to perform a variety of transactions. The behind-the-scenes complexity reaches new heights with enterprises dynamically seeking out multiple Web services components, which would work together to form one giant application - managing commission payments for the salesforce, for example.

Interestingly, recent research conducted by business applications specialist Compuware reveals it is small and medium-sized companies that cherish the highest hopes for Web services with 53% viewing increased revenues as a key business benefit of the technology compared with 40% of large organisations. Improved collaboration is the main pull for 68% of large organisations while 64% expect Web services to reduce business costs.

"This research suggests that it is the smaller, more agile companies that are most likely to view Web services as an opportunity to not only generate revenue, but increase their business responsiveness and collaborate with partners and customers," says Mike Lucas, chief executive of Compuware. However seasoned industry watchers say this is because smaller companies have no real experience of the realities of integration.

Watch out for obstacles
Indeed before companies, large or small, can reap any business benefits from Web services, there are a number of obstacles to overcome. Managing multiple pieces of software on a day-to-day basis is a whole new ballgame for which there is no blueprint according to ZapThink, analysts specialising in Web services and XML. "Implementation is still a custom exercise. There is no existing best practice in this realm," says principal consultant Jason Bloomberg.

Danny Goodall, EMEA marketing director of Web business specialist Sonic Software, points out that HTTP is a very low-level standard indeed and in the hierarchy of communication, is roughly equivalent to making sounds. "Higher up the stack are words, and above that is language." In other words the hard work of translating and transforming these HTTP- wrapped objects into something meaningful still has to be done.

For example, should a purchase order arrive at a company, the stock-checking application on the mainframe has to understand it and make the appropriate calls. Only at that point may a credit check be necessary and depending on the outcome, the order may be routed through to accounts. All these applications are likely to be written in different languages and that all adds up to a lot of translation.

The great unknown
Systems integrators are the most fearful of the brave new world of Web services as they would bear the brunt of exposing all legacy systems to HTTP. Chris Read, head of digital solutions at Andersen, queries exactly what all this work would be in aid of. "What is the killer app going to be for Web services? I haven't found anyone who knows. The fact that you can knock up a piece of software that can talk to anything is the start of the problem," he contends.

Read believes that while all the excitement has been around the discovery and ratification of an enabling technology it is doomed to failure because business processes are unclear. "No two companies want to do things in the same way," he says.

"The problem with Web services is that it assumes that if, for example, you want to buy tin from Venezuela, you just launch a Web agent and plug in," says Read. Real life isn't like that because you can't trust a supplier's fulfilment capability. There are a lot of contractual and legal obligations that Web services just do not answer," he says.

ZapThink agrees that the business processes have not been thought about sufficiently and singles out the issue of payment as most lethal. "If you are aggregating Web services from different suppliers for your application, and forget to pay for one, then the whole application might fail," Ron Schmelzer, a senior analyst says.

Schmelzer points out that software metering never worked for application service providers and consumers don't want to use a credit card to pay for a product worth under a pound because they'll lose money. "If you're going to rent a sales automation service for one hour, you're going to have to set up an agreement with the supplier first, and agree any discounts at that point," he suggests.

Behind closed doors
While all the thorny business issues are being thought about and discussed, for the time being, large corporates are deploying Web services as an internal exercise. This phase in Web services represents an opportunity to get a handle on technical aspects like network traffic, managing loads and security.

The new messaging standard, Soap, doesn't make a great deal of difference to network managers, says ZapThink's Schmelzer, as it merely replaces Dcom or Corba. But the addition of XML, a clunky, text-based format designed to be read by humans as well as computers - and with WSDL on top - could potentially clog up the network and will need careful managing if traffic loads get heavy.

However, the biggest management headache of this new model of IT may prove to be loss of control over software functionality. The focus in-house would shift from software development to the testing and assembly of various components. It could be the ultimate game of detective work when a bug occurs and there are 30 components involved. For Read, it is the ultimate nightmare: "What do you do in the middle of the night when your key application fails? There's no source code and no fix."

With this in mind it seems we are experiencing the lull before the storm and whatever obstacles exist, businesses will increasingly demand Web services. As Schmelzer says: "Users want to save and make money today - and Web services has a story - it's not just pie in the sky."
This was last published in May 2002

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