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Companies prove Web services ROI is possible

At the Open Group's "Boundaryless Information Flow" conference, an IBM executive explained where Web services are today, how companies are using them to save money and gain new revenue and where the technology is headed in the future.


BOSTON -- In just a few short years, Web services have come a long way. With most major application vendors adding Web services support to their products, developers, infrastructure architects and business managers are clamoring to learn more about the technology and its potential impact on the corporate bottom line.

According to Rod Smith, VP of emerging technology for the IBM Software Group, this is evidenced by the 250,000 visits to the Web services section of IBM's developerWorks Web site and the more than 5 million hits on Google for Web services. He cited the figures during his presentation Tuesday at the Open Group's "Boundaryless Information Flow" conference.

Smith said the main reason businesses are so interested in Web services is that many are looking to automate business processes and get products to market faster. He said companies want to re-purpose existing IT assets to gain new business advantages, instead of building from scratch. They are also looking to integrate not only in a technical sense, but in a business collaboration sense as well.

Said Smith, "Integration is now synonymous with the ability to change rapidly. The point I like to stress about Web services is that it's about business relationships -- people being able to discuss software aspects in a way that's less about technology and more about what to expect for a return-on-investment."

Proving ROI

Smith pointed to the Bekins Company, a Hillside, Ill.-based moving company that used Web services to create their Tonnage Brokering Exchange (TBE), a system that enables Bekins to provide instant notification of brokered shipping opportunities that meet a company's specific criteria.

The TBE system has increased the company's yearly revenue by $75 million on top of an annual savings of $1 million. TBE reduced the cycle time of brokering processes by 25% and shortened the development cycle by 60%, thereby saving $100,000 in IT development costs.

Another company, VANS of Sante Fe Springs, Calif., a youth clothing manufacturer, implemented a Web service interface using an online payment services provider and re-using existing application assets, resulting in 33% faster deployment. Productivity and efficiency of sales processes have increased and response time to consumers for their online purchases has improved.

The next phase

In the first phase of growth, Smith said Web services are proving to be a simpler, cheaper, faster approach to existing internal infrastructure integration.

So, what's the next phase? Smith said that the next platforms with be devoted to business contexts where business content, rather than the technology itself, is king.

The future of Web services depends on cross-platform interoperability and the creation of a security standard -- two problems that Smith hopes will be solved by the Web Services Interoperability Organization, a vendor consortium devoted to promoting Web services. He notes, however, that the WS-I hasn't actually produced anything yet.

Finally, in terms of business development, Smith said Web services will usher in a new generation of business applications that provide seamless Web client experience and live flow of business events.

For architects and developers, he said Web services may provide the ability to discover and assemble in the composition layer, and the ability to transform existing applications in addition to creating and publishing new ones.

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