|
|
| Home - Industry Article - Jan 03 Issue |
How to Win at Web Services
continued... page 2 |
Give Me ROI, Not SOAP.
Selling Business Solutions is More Important Than Ever Before.
The message from enterprise customers was clear: They are tired of squabbling vendors and a spaghetti–like jumble of IT systems. They are not compelled by cool technology — they need to see proof of real, bottom–line benefits to adopt and use Web Services.
Web Services is not the dawn of business–driven technology decisions but it certainly intensifies the trend. Platform vendors must learn to sell business solutions in order to survive. These software makers need to show customers how Web Services can help them with tangible improvements to business metrics such as inventory levels or customer satisfaction. The ability of platform vendors to craft and communicate this message may be the single biggest roadblock to Web Services adoption today.
The good news is that all the promises of business value might actually be true. First reports from pioneering Web Services enterprises are positive. The earliest customers say they have already completed pilot projects and are moving on to implementation projects and to future strategy development. But fewer than 10 percent of enterprise customers have participated in Web Services trials and participants estimate that it would be late–2003 before the mass market begins pilot projects.
Contrary to conventional wisdom, these enterprises aren’t just installing solutions behind the firewall: Customers reported that 32 percent of their Web Services related efforts were externally–focused. Early users of Web Services seem to be following their “ROI nose,” sniffing out business value wherever it exists. Participants said that although it cost more to build work–arounds for security and other shortcomings of Web Services technology, the business value justified the investment.
Three–quarters of the 60 Web Services projects analyzed had business goals associated with increasing operating profitability, while the remaining quarter focused on reducing IT total cost of ownership. More than half of all projects with business goals were aimed at improving customer or channel relations. A third were aimed at streamlining supplier interactions. The rest focused on employee interactions.
As Web Services enables interoperability at the technology platform level, business solutions become more important. This implies that systems integrators, application vendors and other software makers with strong connections to line–of–business executives and CIOs will benefit. Systems integrators will increasingly be sought out for strategic partnerships by vendors that don’t have established business relationships.
What’s in it for Me?
Web Services is the Cornerstone of a Services-Oriented Architecture for Application Vendors.
Application vendor adoption of Web Services was rated as critical to the future success of the technology by both industry and customer respondents. Early proponents of Web Services technology have preached that it will reduce lock–in opportunities for application vendors. Many observers felt software makers might shy away from supporting Web Services, or pay lip service to it but not really adopt the technology.
The study found the opposite. Most application vendors plan to support Web Services standards this year. Vendors said they weren’t afraid of losing their lock–in edge because there are no semantic standards in place. Nor did participants feel Web Services would give best–of–breed vendors a big advantage over suite vendors. The marginal reduction in integration costs brought about by Web Services does not appear to substantially impact the traditional trade–offs in this decision.
Then why adopt? Application vendors’ said their main motivation for adopting Web Services in the short term is to help reduce integration costs. According to the vendors surveyed, approximately half of the impact of Web Services will be at the edges of their applications which should serve to lower integration costs. Another one–quarter to one–third of the impact will effect their product architecture.
Two possibilities for adoption by application vendors exist. The first is to paint a Web Service veneer on the application. This will involve exposing APIs as WSDL and supporting standards. The second option is to expose a business abstraction of the application components from the users’ standpoint
.
The first is easy: In 2002, 90 percent of application vendors will support SOAP and 70 percent will expose functionality as WSDL. All vendors interviewed say they will support this functionality in 2003.
The second is much more difficult. Exposing functionality as business services requires
significant re–architecture investment and up–front design. While some respondents said
they are heading in this direction, only 40 percent of application vendor respondents are expected to expose at least some functionality as business services by 2003.
The study asked application vendors to detail their Web Services adoption plans. These answers were compiled into an aggregate roadmap for adoption. Analyzing the roadmap finds enterprise portals and CRM vendors are the most aggressive adopters of Web Services. Other candidates for early adoption were software makers who are in the process of re–architecting their products or have participated in several acquisitions.
Murthy Nukala is a consultant with the Sand Hill Group. He was the founder and CEO of Digital Jones, a vendor of next-generation guided selling solutions software which was acquired by DealTime. After working in global marketing for Baan, Avalon Software and Oracle, M.R. Rangaswami co-founded the Sand Hill Group and serves as a strategic advisor to many fast-growing software companies. The Sand Hill Group is a technology investment and consulting firm based in the San Francisco Bay Area. The firm hosts the popular Enterprise series of conferences for software business executives and publishes Enterprise Critical, an electronic newsletter devoted to coverage of software business strategy.
 
|
|
|
