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Wednesday, January 26, 2005

Web Services And Tommorow's World

Britton Manasco writes,

The global service economy is in a state of upheaval and transformation. He expects to see a wider – and more widely distributed – array of services available via networked technology in the coming years. That will prove to be a threat to some as it was in the recent debate over outsourcing and offshoring. As Accenture’s Anatole Gershman has written, the challenge for business leaders "is not tracking the technology or making sense of the standards behind Web services. It is understanding the opportunities that lie ahead. When Web services reach their full potential, they will change the way we do business." Web Services have the potential to redefine and radically grow our modern service economy. The services could be advanced one linking processes virtually like the dynamic, real-time matching of supply and demand for high value services – much as Commodore Vanderbilt’s railroads and long distance communication made it possible to build national and global markets for a "product economy" of manufactured goods in the late 19th century. Many organisations like Fedex are also trying to exploit web services potential in a fundamentally business transforming manner.

This is significant as the potential reach of the web services movement is mindboggling - approximately at 2/3 rd the GDP of advanced countries are driven by services led economy,where webservices can play a dominant role by unbundling and aggregating, liberate and extend the reach of today’s services . As he puts it, "More and more, products will become a channel for service, and customer relationships will change because many newly possible services will be delivered dynamically…Existing suppliers will be able to deliver highly personalized services and maintain continuous customer interaction. Some may join the ranks of intermediaries who emerge to broker web services." There are limitless opportunities waiting to unfold - in the virtual world, eBay, Amazon, Google, Microsoft have shown how new business can be built using web services. Read our recent coverage on Giving Away The Store Through Amazon Web Services.

Any movement would require lots and lots of interventions and accelarators - we recently covered IBM's recent announcement anyone developing open source software will be allowed to make royalty-free use of 500 IBM patents with IBM’s full consent. The scope of the patents is expansive, covering areas as diverse as Web services, e-mail, message queuing, Web browsers, parallel processing, database storage, encryption, voicemail systems, and even systems designed to prevent motorists from falling asleep.. AMRresearch writes,IBM’s promise makes it harder for Microsoft and Sun to monetize Web services transactions. It is also a further signal that anyone wanting to handicap open source through litigation will have to get through IBM first. The patent pledge makes it harder to monetize Web services transactions - The 500 patents include several related to IBM’s approach to Web services. Although many vendors are signing up to provide a Web services platform, they have been relatively quiet about how they would charge for it. Customers are concerned that vendors want to push demand-based pricing too far, actually charging for each business transaction that gets passed through Web services. By making these particular patents available for free use through open source, IBM is suggesting its answer: Web services transactions should be free. This aligns closely with the position of the primary Web standards body, the W3C consortium, which has a preference for royalty-free use of technology. If the W3C finds favor with IBM’s plan, it will be much harder for others to pick the other side..
My Take :While I certainly agree with the humongous potential of web services to create new business value, as we recently covered Do web services matter, Nicholas Carr's point of view -"Web services will play a key role in overcoming incompatibilities between information systems, helping create a more standardized and productive IT infrastructure for business. But they’re not going to usher in an age of protean value chains. And they're not going to usurp the place of managers in negotiating, overseeing and modifying complex partnerships. Machines matter, but people matter more" is equally valid and therefore conclude that the role of IT/Web Services as enabler shall remain only at that and together with powerful strategies, new business models and process transformation, webservices can play a significant role in creating a new service world for the future.

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