You'll never get web services off-the-shelf

Are web services all hype? Leading analysts addressed the issue at a meeting last week. Cliff Saran reports.

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.
This was last published in March 2003

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