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Web Services: Can We Talk?

Web services are getting plenty of buzz, but if they do provide a simple way for applications to talk to each other, the hype may be justified.

Sun’s chief technology evangelist, Simon Phipps, says that it’s too soon to tell whether the WS-I will succeed in establishing standards or simply become “just another industry consortium that does testing.”

Notwithstanding the sniping, vendors know that in these times of extremely tight IT spending, even technologies with enormous buzz won’t get far unless a solid business case can be made for them. “My toughest job,” says Marvin Balliet, CFO of the technology and services group at Merrill Lynch, “is to manage the euphoria that crops up around every new technology. There is always a new white paper out about some technology that will save the world.” (Not to mention bullish analyst reports put out by his own company.)

Merrill Lynch is, in fact, pursuing Web services on several fronts, but Balliet says “dedicating resources to [emerging technologies] has been substantially reined in. Eighteen months ago we let our best and brightest explore new technologies, in part to keep them from leaving for dot-coms. Today we still do it, but it’s far more controlled.”

The same philosophy holds true at companies that Merrill Lynch relies on. Business Engine, for example, provides IT project management services to Merrill in an ASP model. As such, it’s a strong candidate to explore the potential of Web services. But John O’Neil, the company’s CEO, is approaching the technology cautiously. “We don’t want to be 12 months ahead of our customers,” he says. “Today most companies don’t want bleeding-edge, they want bandages.”

O’Neil says his firm is “optimistic but sober” about the eventual benefits of Web services. “But it’s a road, not an event.” True enough, but all indications are that this road may soon be as heavily traveled as that other metaphorical highway.

Scott Leibs is a senior editor at CFO.

No Overnight Success

Web services will enter most organizations in three distinct phases.

2002: Within the firewall

  • Simplified application integration
  • Increased developer productivity

2004: Contained external users

  • Simplified business-partner connectivity
  • Richer application functionality
  • Subscription-based services

2006 to 2008: Fully dynamic search and use

  • Casual/ad hoc use of services
  • New business models possible
  • Commoditization of software
  • Pervasive use in nontraditional devices

Source: IDC

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