Services Pending

In July, executives at Hewlett-Packard Co. announced that the company had submitted its framework for the development of Web-services management. HP submitted its proposal to the Organization for the Advancement of Structured Information Standards (OASIS), one of the two major global consortia overseeing the development and adoption of extensible markup language (XML)-based business-computing standards. The other group, the World Wide Web Consortium, is known as W3C.

In announcing the submission, HP executives noted that a number of high-profile technology vendors backed the company's plan. The corporates on HP's endorsement list were indeed impressive, and included Ascential Software, BEA Systems, Informatica, Iona, Oracle, Sun Microsystems, Tibco Software, and WebMethods.

There was just one problem with HP's list: IBM and Microsoft weren't on it.

The omission, some observers say, speaks volumes about the difficulties currently bedeviling the Web-services movement. Long ballyhooed as a revolution in business computing, Web services, in which different software applications actually talk to one another, has been slow in coming. Three years ago, once-bitter rivals IBM and Microsoft surprised the tech world by announcing their joint support for Simple Object Access Protocol (SOAP), a messaging protocol vital for the development of Web services. To many, the teaming of Big Blue and Big Bill signaled that Web services had arrived.

But some vendors reportedly worried that the powerful twosome would eventually come to dominate the Web—services agenda—and tilt the playing field in their favor. Fueling those concerns, the tech titans jointly released "Web Services Framework," a proposal that mapped out a dozen functional components necessary for the creation of true XML-based business-computing standards.

A good idea, it seemed. But since that release in 2001, several groups of vendors have submitted standards to OASIS and W3C for a number of the 12 functions mapped out by IBM and Microsoft. Without the blessing of the duo, however, it now appears some of the proposed standards may never gain acceptance.

If executives at marquee companies such as Oracle and Sun perceive that IBM and Microsoft are looking to unfairly capitalize on Web services, they may push hard for their own agendas. And experts warn that any falling out among the top software vendors could deal a crippling blow to Web services, which cannot truly succeed without open and agreed-upon standards.

Given all this, it's not surprising that the initial excitement over Web services has given way lately to a fair amount of pessimism. Observes Ben Gaucherin, chief technology officer at Sapient, an IT-services firm based in Cambridge, Mass.: "There was a lot of noise around Web services about a year and a half ago. That's sort of gone away."

Whose Table Is It?
This is not to say Web services is doomed. In fact, in an interview with CFO, a spokeswoman for IBM played down the company's seeming lack of support for HP's proposal. "We're pleased that HP has put its thoughts on the table," says Karla Norsworthy, director of dynamic eBusiness technologies at IBM. "We have some thoughts to put on the table, too, and we anticipate that working together with the standards committees, we'll come up with some good answers for our customers."

Customers would like that. Despite the jockeying over Web services, its premise—applications communicating with other applications—holds tremendous appeal for corporate buyers of computer software. "If you talk to CIOs," says John Kiger, director of Web services for BEA Systems, a San Jose, Calif.-based application-infrastructure software company, "a long-standing headache has been the cost and complexity of integrating their different applications as they seek to automate business processes and improve the efficiencies of organizations."

Efficiencies is the key word in that sentence. Web-based integration of internal software—and fee-based access to the best external programs—will likely generate substantial savings. "With increased concerns about competition and managing IT costs," notes Kevin Pollari, a partner with consultancy Accenture, "Web services is being viewed as a key part of the effort to reduce IT costs."

The early reports are good, that's for sure. Take Avnet, a $9 billion distributor of electronic components and enterprise network and computer systems, which rolled out a Web-services program about a year ago. So far, CFO Ray Sadowski estimates the company has saved $9 million on an investment of $1.3 million. "The Web-services team delivered more than the ROI committed to initially," he notes. Phoenix-based Avnet is planning to invest more money in Web-services projects next year.

A number of other companies are in the throes of rolling out XML E-business initiatives. "We've talked to about all the Global 2,000 companies," claims John Hanger, senior vice president of sales and marketing for Alpharetta, Ga.-based Flamenco Networks, a maker of software for managing Web services. "And I would say that well over 80 percent of them have some sort of Web-services project going on today."

Executives in the travel industry, in particular, seem to have embraced Web services wholeheartedly. The reason? Says Doug Chait, CFO at travel-information aggregator AgentWare: "[The travel business] lends itself to a Web-services approach where you can aggregate information from disparate sources on a single screen."

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