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Slowly Weaving Web Services Together

Instead of exploding, the movement to help disparate computer systems easily communicate is gaining in fits and starts. Still, it'll likely have a powerful impact.
Written by Alex Salkever, Contributor

In October of 2000, Microsoft ramped up the buzz machine to sell its latest big initiative. Dubbed .Net (pronounced dot-Net), the project presented a sweeping vision of a new, interconnected world. The software king foresaw a day when consumers and businesses would connect to the Internet anywhere, anytime, via any number of devices -- PCs, cell phones, even refrigerators -- to make life easier. Say you were late for a meeting. If you were a .Netizen, the system could detect from your cell-phone location that you had been delayed, send an e-mail to the waiting parties -- and reschedule subsequent meetings that day.

Microsoft assumed businesses could also use .Net to let disparate software systems carry on dialogues without human interaction, cutting a cost layer and boosting efficiency. Need to find a maker of Widget X and get a bid? In a .Net world, computers could do it with no phone calls or e-mail exchanged, all on infrastructure provided, of course, by Microsoft -- which might ease the transition by providing all this via subscription service rather than by requiring customers to buy their own hardware and software.

Left unsaid was another reason for .Net: A technology with similar possibilities -- Sun Microsystems' Java platform -- was also being used to build the type of framework for distributed computing that Microsoft proposed. Sun and its allies rushed to stitch together a competing offering, and the battle was joined.

STILL UNREALIZED. Since all of these new services would be built on the same underlying technology that powers the Internet, the category was labeled "Web services." With dot-com mania still in full swing, the grand vision was easy to accept. Data would flow like water from one program to another. Bits and bytes would be wrapped in a format that would be both easy to understand and ridiculously simple to integrate across all manner of computer systems.

Fast-forward to the summer of 2003, and Web services remains a buzzword, but hardly of the stature Bill Gates implied when he called .Net possibly a "bet the company" initiative. According to a report issued in June by consultancy and full-time Colossus of Redmond watcher Directions on Microsoft: "Three years later, most of the hopes behind the .NET initiative have not been realized."

The intelligent software that was supposed to weave all types of devices into the fabric of human life hasn't taken hold. Fear of Microsoft has scuttled most of the giant's plans to host customers' critical data. True, businesses are starting to adopt the Web-services model for linking their internal systems and talking to customers. Yet even in that respect, this approach is proving to be more evolutionary than revolutionary. In fact, Web services has become mostly about making software integration easier, faster, and cheaper. That alleviates a pain point for many companies, but it's hardly the dawn of a new era.

NEW CONVERTS. And yet, the vision put forth by Gates and others has shifted the computing landscape in crucial ways. Tech consultancy International Data Corp. estimates that North American companies implemented 3,300 Web-services projects in 2002. Spending on related professional services should break the $1 billion level in 2003, increasing 146% next year to $2.7 billion. ZapThink, a Waltham (Mass.) consultancy that tracks the Web-services market, estimates that spending on the technology was $1.8 billion in 2002 and should exceed $5 billion next year. Those estimates are imprecise, given the blurry definition of Web services.

Still, tech consultancy Accenture estimates that 25% of the customers of its financial-services unit want some type of Web-services component built into what they're buying. IBM now employs more than 1,000 people to work on technologies associated with Web services. And BEA Systems, a server software company that's perhaps more closely tied to Web services than any other outfit, posted revenues of $934 million in 2002.

The newly converted include Yellow Corp. subsidiary Yellow Transportation, the Overland Park (Kan.) trucking company that booked $2.5 billion in 2002 revenues. Yellow has 400,000 customers that often want shipping-rate quotes on the fly. "We know our customers like to have access to their data via our systems, says Rich Hardt, vice-president for technology services at Yellow. "Our objective was to get ahead of them."

THE XML LINK. To accomplish that in fourth-quarter 2001, Hardt built a Web-services function that would let his customers reach into Yellow's internal systems and pull out rates on schedules the two parties had already negotiated. Yellow uses a so-called Web application server -- available from IBM, Oracle, BEA, Microsoft, and others -- to translate information from its internal systems into an XML (extensible markup language) format.

In fact, the key piece of Web services is XML, a format for transmitting data that any Internet-connected device can read. Thus, a customer using XML can build a tailored template to display rate quotes on its own Web site using data supplied by Yellow. Or it can build an engine that lets it compare quotes from Yellow and other carriers. A customer that wants to get really radical can let its employees receive Yellow shipment-tracking information on their Nextel cell phones, which can also understand and display XML in a stripped-down interface.

"It's almost treating our customers no differently than we would treat an employee," says Hardt. As Yellow's system illustrates, a browser isn't needed to talk via the Web. "All of a sudden, when I have a common language, it's easy to build applications that can communicate," says Steve van Roekel, Microsoft's director of platform computing.

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