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An inside look at Web services and enterprise applications, part 2

In a Web services world, is there room for mega-suite enterprise applications? What's the fate of the enterprise applications vendors themselves? That's what we'll discuss here.

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Continued from Part One

Many analysts and vendors believe the future of enterprise applications, such as customer relationship management and enterprise resource planning, lies in Web services technology. That's because Web services can be used to have different enterprise applications talk to one another and communicate with legacy systems and other enterprise systems.

But in a Web services world, is there room for mega-suite enterprise applications? What's the fate of the enterprise applications vendors themselves?

Roll your own application suite
There are those who believe that the days of the large do-it-all enterprise application suites are numbered and that enterprises will one day tie together smaller reusable components -- in essence, build enterprise-wide applications like you might string together Lego blocks.

Sophie Mayo, a director at Framingham, Mass.-based International Data Corp., said because of the growth of Web services and the convergence between software and services, "the [enterprise applications] industry as we know it today will change in the future, as components become commodities."

Corporations will be able to choose from many different components to build their own customized enterprise-wide applications, and use Web services technologies to stitch it all together.

Since this might be difficult for many enterprises, Mayo said, "You might have a new breed of companies called brokers that will assemble applications from different components, and provide new and efficient processes that are truly best of breed."

In that way, she said, enterprises will be able to buy highly customized solutions specific to their needs. And they'll only have to pay for components they actually use, instead of having to buy a large application with many features that they wouldn't use.

Mayo said there would be two types of enterprise application vendors: those that build the components and those that assemble and customize components for enterprises. She doesn't expect this to occur overnight; she sees it happening five to seven years in the future.

Mike Gilpin, vice president and research director at Forrester Research Inc., said very large corporations with a significant investment in IT might assemble the components into enterprise suites themselves. He expects that smaller companies will buy off-the-shelf applications that are composites of modules provided by many different application vendors.

Gilpin believes that enterprise application vendors will offer a set of services and a set of integration capabilities that can be used for creating composite applications. Also, vendors may sell composite applications targeted at vertical markets or at horizontal business processes such as buying and selling.

SAP and NetWeaver
All this sounds very promising, but elements of it are already evident today. Siebel Systems Inc. and PeopleSoft Inc., for example, are increasingly using Web services in their enterprise applications.

But Gilpin, Mayo and other analysts point to SAP's NetWeaver and xApps as being the furthest along in the use of Web services and enabling enterprises to build customized composite applications.

SAP senior vice president Dennis Moore said SAP is already shipping six composite enterprise applications that use Web services to some degree. The xApps run on top of other applications and use Web services as a way to communicate with them.

For example, he said a traditional CRM product "uses its own database and data and that then has to synchronize with a corporate system." This means a great deal of development work, complexity, the possibility of problems with synchronization, and troubleshooting and maintenance issues.

But an xApp, he said, "uses Web services to talk to underlying systems and don't have to maintain its own data." Instead, the underlying systems maintain data the way they always have. That means a much less complex application requiring less work with fewer potential problems.

xApps are built with NetWeaver, which works with an existing IT infrastructure and uses Web services to build composite applications on top of it. NetWeaver is also built for use with service-oriented architectures (SOAs), which are at the heart of using Web services for enterprise applications.

Moore doesn't agree that enterprises will roll their own applications out of components. He believes it isn't cost-effective to do so. Additionally, businesses generally don't have the necessary skill sets to build them and there isn't any competitive advantage for companies to be their own integrator.

"Because of the complex litigious and regulatory environment, you can't take on the risk of being your own integrator," Moore said.

Instead, he believes, companies will want a mix of off-the-shelf applications and composite applications. In 2005, NetWeaver will include a composite application framework that will make it easier to develop composite applications, according to Moore. In addition, the MySAP business suite will be delivered as a set of composite applications next year. By 2007, he expects the entire product set to be delivered according to an SOA, making back-end architecture available through a service interface.

Where it's headed
Other enterprise application vendors will increasingly use Web services to integrate their applications throughout the enterprise and most likely will follow SAP's lead in building composite applications. It's unlikely that the big enterprise application vendors will disappear; they'll simply follow their customers' lead and build ways for businesses to make use of composite applications. But one way or another, the big one-size-fits-all enterprise application suites are most likely an endangered species, to be killed off by Web services technology.


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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