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An inside look at Web services and enterprise applications

In this first part of a two-part column, we'll look at how Web services will affect enterprises and big enterprise application vendors.

The Web Services Advisor
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Enterprise applications, such as customer relationship management (CRM) and enterprise resource planning (ERP), have been the "big iron" of the software world since the 1990s. These heavy-duty suites are used by large companies to power entire enterprises and have led to big productivity gains.

But as Web services gain acceptance, there are those who say that ultimately these mega-suites are a thing of the past -- lumbering dinosaurs that will be replaced by nimbler and easier-to-deploy Web services.

In this first part of a two-part column, we'll look at how Web services will affect enterprises and big enterprise application vendors.

Why big iron software may get small
Enterprise applications have become ubiquitous in large corporations because they boost productivity and tie large enterprises together, solving unique problems. CRM software, for example, allows a company to manage all of its interactions with its customers, whether they are sales- or service-related. The software can also be accessed remotely by employees from any offices around the globe.

Increasingly, though, corporations want their enterprise applications to do not just one job, but to talk to one another as well -- CRM software talking to Sales Force Automation software, for example. To do that, however, requires significant development time and often custom development work.

And that's where Web services come in, according to Sophie Mayo, director, IDC Research Services.

"Web services are affecting the use of enterprise applications because of new strategies around integration," she says. Many companies, she notes, see Web services as the ideal way to integrate applications and so they increasingly want enterprise applications to be Web services-aware. That way, rather than doing custom development work, enterprises can use Web service standards and technologies as a way to get applications to talk to one another and share data, resources and services.

Sandra Rogers, program director for Web services integration software at IDC, says that Web services "open the door for the next generation of enterprise applications that break down the big mega-applications dependent only on themselves for all of their different components." In the long run, enterprise applications could be built from components from different vendors and corporations could mix and match components from different vendors, in essence creating their own unique, customized enterprise applications without all of the typical development work..

In the short term, this means that enterprise application vendors are "under pressure to come up with solutions in which Web-services enabled APIs wrapper different components," says Rogers. In that way, it will be easier for enterprises to get components of different enterprise applications to talk to one another.

Both SAP and PeopleSoft are already moving in that direction, according to Rogers and she expects that other enterprise application vendors will follow.

Where SOAs fit in
Key to all this is the use of service-oriented architectures (SOAs) by enterprises. In an SOA, a corporation defines IT resources as services that can be connected to and used by other services and applications. An SOA takes a top-level view of an enterprise's business and defines necessary components and services. Knitting the SOA together are Web service standards including XML, SOAP and others.

As companies move to SOAs and define different components of their business, they're less likely to accept the big enterprise applications paradigm, in which all data and resources revolve around a single enterprise application. Instead, companies will be able to pick and choose components from different applications, define those as services and integrate them more efficiently.

Putting different components together from various enterprise applications is called creating a composite application. In theory, creating one sounds easy. In practice, of course, it takes a substantial amount of development effort. Because of that, many businesses will continue to buy enterprise applications and avoid building composite applications using Web services.

Mike Gilpin, Vice President and Research Director of Forrester Research, says that it's primarily very large companies that devote substantial resources to IT who are likely to use Web services in concert with enterprise applications, while smaller, non-IT oriented companies will use traditional enterprise applications.

"Companies with over one billion in revenue, that spent over 6% of their revenue on IT and that have a global presence, are much more likely to do more application development and to look at application development as a strategic resource," Gilpin says. Those companies, he notes, are more likely to build composite applications and develop SOAs. Companies with less revenue, that devote less than 6% of their resources to IT are much less likely to build composite applications using Web services and enterprise applications.

Where it's all heading
Although building substantial composite applications using Web services and enterprise applications is not being done a great deal today, analysts expect it to become much more common in the future. What are the implications for enterprise application vendors and businesses that use enterprise applications? That's what I'll cover in my next column.

Continues in Part Two


About the Author

Preston Gralla, a well-known technology expert, is the author of more than 20 books, including "How the Internet Works," which has been translated into 14 languages and sold several hundred thousand copies worldwide. He is an expert on Web services and the author of a major research and white paper for the Software and Information Industry Association on the topic. Gralla was the founding managing editor of PC Week, a founding editor and then editor and editorial director of PC/Computing, and an executive editor for ZDNet and CNet. He has written about technology for more than 15 years for many major magazines and newspapers, including PC Magazine, Computerworld, CIO Magazine, eWeek and its forerunner PC Week, PC/Computing, the Los Angeles Times, USA Today, and the Dallas Morning News among others. He can be reached at preston@gralla.com.

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