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EAI and Web services in the securities industry

Are EAI and Web services two peas in a pod? Or complementary? It seems that in the securities industry there is confusion about what EAI is and where Web services figures in this. Aneet Shah of weighs in.

Market Analysis

EAI and Web services in the securities industry
Are EAI and Web services two peas in a pod? Or complementary? It seems that in the securities industry there is confusion about what is EAI and where does Web services figure in this.

The concept of Web services--now familiar to most companies--is sometimes positioned as a replacement for EAI (enterprise application integration) solutions. This confusion is maintained, and even supported, by the new vendors of 'pure' Web services solutions.

Let us start by looking at the definition of the concepts of Web services and EAI. Web services is a modular application that can be accessed by a network (Internet, intranet, extranet) through a standard XML format interface, while Enterprise application integration (EAI) is a concept that groups together a set of methods, technologies and tools used to consolidate and coordinate different applications, leading to the urbanisation of the enterprise's information system. Does this help? Probably not... read on.

Most companies have an environment of disparate legacy systems, applications, processes, and data sources, which typically interact by a maze of interconnections that are poorly documented and expensive to maintain. Additional problems arise from market consolidation in the digital age, where mergers and acquisitions of companies can increase the complexity of system integration exponentially. The segmentation of information systems was exacerbated with the introduction of commercial off-the-shelf applications such as enterprise resource planning (ERP), customer relationship management (CRM), supply chain management (SCM), and portals. Early on, these systems were designed as self-contained 'black-boxes' with little or no means for accessing internal data or processes. Although many of these applications now provide better access to their underlying data and business logic, integrating them with other systems in the enterprise is still a challenge.

As the need to meet increasing customer and business partner expectations for real-time information continued to rise, companies were forced to link their disparate systems to improve productivity, efficiency, and, ultimately, customer satisfaction. The need for IT systems to communicate within an organization led to the evolution of enterprise application integration (EAI). EAI is the process of creating an integrated infrastructure for linking disparate systems, applications, and data sources across the corporate enterprise. The very origin of EAI solutions can be linked to the need for providing a full duplex, bi-directional solution to share seamlessly and exchange data between ERP, CRM, SCM, databases, data warehouses, and other important internal systems within the company. It is the 'glue' that holds the collection of business processes and systems together. There are four types of middleware solutions to EAI - User Interface, Integration data Integration, Business Process Integration and Method or Function Integration.

As companies move in the direction of collaborative business-to-business e-commerce, they will first have to look inward to their own internal systems, applications and processes. Several business processes span across multiple internal applications. These applications must be able to communicate dynamically in real-time before a company can effectively e-communicate with the outside world - this is where Web Services comes into play. Web Services provide a distributed computing technology for revealing the business services of applications on the Internet or intranet using standard XML protocols and formats. The use of standard XML protocols makes Web Services platform, language, and vendor independent, and an ideal candidate for use in EAI solutions. They eliminate the interoperability issues by leveraging open Internet standards - Web Services Description Language (WSDL - to describe), Universal Description, Discovery and Integration (UDDI - to advertise and syndicate), Simple Object Access Protocol (SOAP - to communicate) and Web Services Flow Language (WSFL - to define work flows).

Web Services are not EAI in and of themselves. Rather, Web Services are just another technology that enables EAI, and it can significantly change the traditional point-to-point integration approach. Thus moving EAI from application integration to service integration. Eventually, as Web services mature and companies have gone through a cycle of replacement of their technology, EAI in its traditional form may become extinct; with Web Services being the way forward.

I hope to expand more on EAI and Web services in a report to be published next year that looks at some of the vendors in this space and their solutions.

Copyright 2003. Originally published by, reprinted with permission. provides IT decision makers with free daily e-mails containing news analysis, member-only discussion forums, free research, technology spotlights and free on-line consultancy. To register for a free e-mail subscription, click here.

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