News

Web Services: Companies move beyond tire-kicking

• By John K. Waters
• October 18, 2004

It's time to stop thinking of Web services as emerging technologies, say industry watchers at the Yankee Group.

The Boston-based analysts recently surveyed 437 enterprise IT decision makers on their Web services plans. They found 48% of those surveyed already have deployed Web services, with 39% planning to in 2005. By this time next year, Yankee predicts, 77% of enterprises will have deployed Web services.

The survey results show Web services "have passed their tests, and enterprises are gearing up for higher spending on Web services across all business processes." The majority of those surveyed are using Web services projects to move toward a service-oriented architecture, Yankee found.

"As Web services and SOA adoption cross the chasm, they have significant impact on the IT industry," says Yankee senior analyst Siew-Joo Tan. "They will accelerate the outsourcing markets and enable the on-demand market. Application suite vendors, security vendors, integration vendors and external service providers, among others, will feel the impact of widespread adoption of web services."

Of those surveyed, 43% said Web-services-enabled applications will replace existing application or business processes; 32% of respondents said they will augment existing applications with Web services; and 25% said they would develop new applications using Web services.

Significantly, the responses suggest organizations are moving beyond the kick-the-tires phase in their Web services deployments. At first widely used as an internal integration enabler, Web services now offer business benefits beyond the firewall. In the Yankee survey, more than two-thirds of respondents realized key business value from Web services from their ability to communicate with partners.

The survey also suggests vertical industries that had lagged behind early-adopter segments--such as telco and financial services--are now catching up in Web services deployments. Sixty-six percent of respondents from government organizations, for example, have already deployed Web services, compared with 67% of wireless telcos and 54% of financial services firms.

These numbers add up to opportunities for vendors, the survey concludes: Application suite vendors, security vendors, integration vendors and external service providers, among others, will feel the impact of widespread adoption of Web services.

Of companies that said they were not interested in Web services, 72% indicated they were not a managerial priority, 44% said they did not understand Web services, and 28% were not convinced of their benefits.

Not surprising, many of the survey respondents expressed concerns about security and cited them as one of the hindrances to external deployment of Web services.