For all the buzz they have been generating for the past few years, Web services have not really lived up to the hype. In fact Andrew Bartels doesn’t envision true Web services in the enterprise application space for another two to three years.
The lofty goal of enterprise-wide Web services is to create a consistent user experience by connecting customers, empowering employees and integrating business processes with suppliers and buyers. But standards will be needed for Web services to truly reach their potential. Exactly how these standards will play out is up for debate said Bartels, vice-president and research leader with Cambridge, Mass.-based Giga Information Group.
At the recent RBC Financial Group eBusiness Intelligence Symposium in Toronto, Bartels said several scenarios are possible over the next few years, but that two seem most likely. “If there are no efforts to define standards, then the vendors will define [them],” he said. In this case, what he calls the comprehensive enterprise suite will dominate with vendors such as J.D. Edwards, Oracle, PeopleSoft and SAP leading the pack. Users will be required to buy suites of Web services applications and because of this, the potential cost is high.
If, however, users get involved in creating Web services standards, then the best-of-breed, or the Lego model as Bartels likes to call it (where individual applications from unrelated vendors can be plugged together and work harmoniously), will win out. The advantage of the latter model is that software costs will drop dramatically since users pay for only what they need, when they need it, Bartels said. Following this scenario vendors such as BEA, Microsoft and IBM would dominate, he said.
Hitesh Dani, technology specialist with Mississauga, Ont.-based Microsoft Canada Co., is a fan of the second scenario. IT can act as a catalyst to make Web services happen, he said. Companies will move from silos of applications to “harmonious” applications. “It is all going to be integration through a single architecture,” he said.
The advantage of this integration is what Dani calls business agility, a scenario where a company can respond to business demands “in a timely, cost-effective and non-evasive manner.”
Citing Gartner Inc. and IDC statistics, he said the Web services software market will reach US$1.7 billion by 2003, according to Gartner and spending on enterprise integration will reach US$50 billion the same year, according to IDC.
But Bartels is not as certain. “There is no longer the expectation that it (Web services) is going to take over the world,” he said. Though he agrees that increased use of Web services will help drive corporate change, he is not too certain how soon this is going to happen given the state of the economy. He said 2003 might be a little optimistic.
Traditionally big recessions rebound with big recoveries, and small ones with small ones, Bartels said. Since the recent recession was relatively small there is no reason to expect huge growth in IT spending over the next year. Also added to the fray is the fact IT went on a relative spending spree in 2000 and 2001 and companies are still “digesting what they have already got,” he added.
Regardless, Bartels made it clear he is a fan of enterprise applications. He cited CRM, sales force automation solutions, analytics, HR and financial management as areas that have benefited from an enterprise-wide solution. But there has also been a downside. Many companies, in a rush to adopt new technologies, found themselves with, for example, five different CRM solutions. Before all of this can successfully be moved into Web services, the technology side has to be sorted out, he said.
Another hurdle still to overcome is the issue of liability – in other words, determining who is responsible for what. Bartels said one reason the application service provider model failed is that it lacked an answer to the “when things break, who do I choke?” question. Enterprise-wide Web services will have to overcome this if it is to succeed. “[It] is going to take a while to develop but it will come.”