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September 3, 2001

The E-Business Software Weekly is a series profiling trends and developments in software and applications that support e-business, the Internet, and other electronic communication channels. Look for a new story each week in this space.

"Software as a Service"

Phil Wainewright fears that information technology may be stuck in a time warp. As the founder of ASPnews.com, the leading Internet publication devoted exclusively to the application service provider (ASP) market, Wainewright has been a box-seat witness to the birth, meteoric rise, and subsequent death spiral of the ASP model, and now watches with the strained optimism of a sports columnist for a struggling home team as he searches for signs that ASPs are mutating into a new, more viable form.

He's not sure he likes what he sees.

"Back in 1995," he recalls, "an enormous buzz took hold in the IT industry, as the popular emergence of the Web browser and the creation of Java seemed to have laid the foundations for a completely new form of computing. People started saying that the PC would be consigned to history within a year or two, replaced by Java-based browser applications delivered via cheap, networked appliances."

But while Java soon became a handy tool for adding animation and interaction to Web sites, its business value remained questionable. "The knowledge that Java was good for developing lively Web content was hardly reassuring for enterprises wanting to know if they could run their businesses on it," says Wainewright. "As doubts emerged about its reliability, scalability, and compatibility, Java struggled to contradict the view that it was good only for Web page gimmicks."

Fast forward to 2001. The advent of the Web services model-one of the most provocative of the potential ASP evolutions-"is starting to sound just like 1995 all over again." A wide range of technology watchers, Wainewright included, are proclaiming Web services to be the foundation of a completely new form of computing, "destined to gradually supplant and ultimately obsolete traditional standalone software applications." But, Wainewright worries, "the only live, operational Web services we can point to are just a handful of cool gimmicks for Web sites. Who," he insists, "is that going to persuade?"

Defining Web Services

At this point, persuasion may be the least of the tech watcher's concerns. First is a simple matter of definition. As with other new technologies, gauging the potential of Web services begins with specifying exactly what we are talking about-no small task given the expansive, often fuzzy nature of much high-tech terminology. Like ASPs before it, the "Web services" concept seems to mean different things to different people, ranging from tiny Web site applets to full-blown Web-based applications to pretty much anything in between that suits the convenience of the commentator. Properly defined, however, Web services are a distinct, straightforward class of technology. To understand Web services, it's helpful to begin with the well-established concept of a software application. As anyone who has used a computer instinctively knows, software applications are computer programs that enable individuals to create, command, and interact with data for some specific purpose. The data itself may take on a wide range of forms, including textual (as in word-processing programs), graphical (as in photo-editing programs), audiovisual (as in video-editing programs), numerical (as in spreadsheets), or some combination thereof (as in most database-dependent applications). Likewise, software applications may be used to carry out a variety of tasks, from calculating budgets to designing a brochure to managing hotel reservations.

Despite these differences, software applications are all conceptually architected, at the highest levels, in the same way. Schematically, software applications can be represented by three "layers": (1) the "presentation layer," which is the interface through which the application and data are displayed; (2) the "application layer," which is the structured framework of rules that govern how individuals may use the application to create or interact with data; and (3) the "data layer," or the repository where data are stored, from which they are imported into the application, and to which they are exported when the application's work is completed. In principle, applications are modular, such that the application layer and the data layer can reside in different physical locations, and can be viewed through a host of different presentation layers.

This conceptual architecture is less mysterious than it sounds, and is, in fact, part of most computer users' everyday experience. For instance, on a standalone PC, in which software programs and data are typically stored on the computer's hard drive, both the application layer and data layer reside wholly on the same computer, and all viewed through a single, dedicated presentation layer (i.e., the computer's monitor). On many office PCs, however, while software may reside on a "client" computer's local hard drive, data is often stored on and drawn from a centralized, network-based server. Hence, in this "client/server" environment, while the application layer is a purely local phenomenon (and is still tied to a single, dedicated presentation layer), the data layer becomes network-based: that is, it draws on information resident outside the computer's physical boundaries.

The Technical Architecture of Web Services

The use of networks to deliver data, of course, is hardly revolutionary. In the early years of enterprise computing, not just data, but entire software applications were stored on and accessed from centralized mainframe computers-the antecedents of modern-day servers. Employees interacted with both applications and data over an in-house network, meaning that both the application layer and the data layer were network-based phenomena. Employees' workstations (i.e., the presentation layer) consisted of the proverbial "dumb terminals"-they contained no intelligence, no operating rules, no data. They merely acted as a display mechanism through which users could view and interact with data. Moreover, in contrast to the emerging PC-based and client/server architecture, in which a "client" application would need to be installed on each user's computer, any "dumb terminal" could be used, without modification, to access the same central data base.

Web browsers and Web sites employ a parallel architecture-except that the mainframe computer has been replaced by a global network of networks called the Internet. As with mainframe applications, a given Web site can be accessed from any browser-enabled computer without the need for further modification to the computer. But there is a key difference between mainframe computing and the vast majority of Web sites. As informational vehicles, most Web sites send data to and occasionally receive data from the user's browser, but they typically do not allow users to create, modify, or otherwise manipulate the data, as a typical software application does. Even the standard transactional Web site adds little more than a sophisticated data input and capture mechanism that then feeds into a back-end transaction-processing engine. The upshot: as rich as they are, the majority of Web sites contain only a presentation layer (the Web browser) and a data layer (the site's components, as stored on the Web server); there is typically no application layer.

With these concepts established, it now becomes a simple matter to define Web services. We can approach the definition in two ways:

  • As a "Webified" application. Functionally comparable to traditional application software, "Web services" are merely software-like applications designed to be delivered completely over the Internet. That is, both the application layer and the data layer are resident on a centralized server or network of servers, and are accessed by the Web browser (the presentation layer) as needed-in much the same way that so-called dumb terminals of the mainframe age would access application functions and data from the local mainframe. Other than that, the Web service's applications are intended to function exactly as they would if they were resident on a computer's local hard drive.


  • As an enhanced Web site. Web sites intrinsically offer users a certain degree of interactivity, if nothing more than the freedom to choose which links to click. To the extent that a Web site's interactivity is enhanced in such a way that users can actually create, manipulate, store, and recall data, the Web site will acquire some of the essential characteristics of a Web application, and so gradually evolve into a full-fledged Web service. As with the data layer, the application rules for such a Web site would be stored on the central server or network of servers.


  • These two approaches to the "Web services" definition are useful because, in fact, Web services can be created in either way. In some cases, applications will be written from the start for delivery over the Internet, and the Web site over which they are ultimately displayed will be comprised of that application and little else. In other cases, existing informational Web sites will be gradually supplemented with application-like functions until they take on a form that can appropriately be termed a Web service.

    In either situation, however, note that Web services are fundamentally distinct from the conventional concept of application service providers, or ASPs. Typically, ASPs are organizations that deliver existing desktop- and client/server-based software applications over a network. Unlike Web services, ASPs are desktop-based software applications whose data and at most some small portion of application rules have been moved onto the network. With most traditional ASPs, full client versions of the software must reside and be maintained on each individual user's computer. The ASP model is thus not reflective of the Web site architecture that underlies Web services, but is merely an extension of the traditional client/server model-the key distinction being that the central server is accessed, not over an internal LAN or a WAN, but over the Internet.

    The Benefits of Web Services

    Because they basically extend the client/server architecture to the Internet, ASPs afford their business users some administrative and financing advantages over current in-house enterprise computing environments, but little in the way of real computing benefits. The problems and complexities that plague locally hosted client/server software continue to burden the ASP implementations of the same. Nor do the often enormous technical and financial burdens of high-end client/server software disappear under the ASP regime; they are merely shifted in time or space via financial amortization or the outsourcing of IT functions. It is for this reason-the ultimate meagerness of their value proposition-that ASPs have not survived their initial flurries of promise.

    But if ASPs have delivered less value to business than they were supposed to, why should we expect anything different from their progeny, the Web service. If, as indicated above, Web services perform basically the same functions as desktop- or client/server-based software applications, why the rush to trade one for the other? And why the frequent declarations that the move to Web services would transform the delivery of software, even do away with software completely? For instance, a report earlier this year in InfoWorld proclaimed that "Web services may be the El Dorado of the software industry. Just as Sir Walter Raleigh and countless prospectors looked for the city of gold, vendors and corporations alike have sought out ways to enable application accessibility across the InternetÖ"

    But why? Just "because it's there" doesn't seem like a sufficient answer, especially in view of the billions of dollars that would need to be spent to make Web services a viable alternative to packaged and client/server software.

    As it turns out, Web services-software delivered as a service over the Internet-do offer enterprises a number of advantages over traditional forms of software, advantages that the conventional ASP model promised but could never produce. These benefits include:

  • True anytime, anywhere access. Like Web sites themselves, Web services are available from virtually any computer with an Internet connection-at any time, day or night-and, in some cases, from a multiplicity of devices, including Web-enabled cell-phones, handheld computers, and kiosks. Unlike packaged or client/server software, which require installation, upgrades, and reconfiguration of preferences on each computer on which it resides, Web services are instantly accessible, with all preferences and configurations preserved, from any Web-connected computer.


  • Continuous real-time data synchronization. With traditional software, working from different computers often means copying and physically transporting data files, so that the same file winds up existing in multiple versions and at multiple locations. Users cannot be sure that they are working with the most recent data, or that any changes they make will be preserved in the final version of a file. By contrast, because each access point for a Web service draws on the same centralized data base, data is always complete and current, eliminating the need for multiple file copies, data-file version control, and physical transport of data.


  • Enhanced interconnectivity. Because they were designed primarily as standalone applications, most traditional software programs do not interconnect very well. In fact, for some enterprise applications, months or years of work and many millions of dollars may be required to enable multiple applications to talk with one another. Most sophisticated Web services, however, are built with an XML (eXtended Markup Language) interface that affixes a common set of tags to the data generated by the underlying application, and so it becomes a much simpler task to integrate disparate applications, a task that can often be accomplished in a matter of weeks.


  • Simplified administration. ASPs promised a greatly reduced IT administration burden, since the ASP's staff-and not the client company's in-house staff-managed the software, servers, and network. But because desktop versions of the software were still required on all users' computers, the overall amount of administration needed was largely unchanged; companies paid outsourced IT staff rather than in-house staff, but they still paid. Web services offer all of the administrative benefits of ASPs because they, too, centralize applications and data, but since Web services also eliminate the need for desktop software, they actually-and sharply-reduce the total administrative effort required. Not only that, but the centralized nature of Web service applications means that all users are always working from the current version of the application, eliminating the need for software upgrades or version controls.


  • Lower total cost of ownership. ASPs were supposed to reduce the total costs of software ownership, but instead they simply amortized the costs over time, leasing the software rather than requiring an outright purchase. The total cost of ownership was little changed, however, because each client company needed its own software and per-seat licenses, its own specialized hardware, and its own networking. Web services require none of this. They are not leasing arrangements, but subscription relationships, much like cable television or telephone service, that involve no huge upfront licenses and generally no specialized equipment. Not only that, but only one instance of the application "software" is required for the totality of a Web service's customers, making it much less expensive for the Web service's users as development and maintenance costs are amortized over the entire user population.


  • A Web Services Revolution?

    Personal computing and the Internet have profoundly-and permanently-revolutionized the business world. Will Web services do the same?

    Microsoft certainly thinks so. With its .NET initiative, announced in June 2000, Microsoft made clear what it had long been hinting at: that the future of software, in its view, lay in the rental of applications over the Internet. Other industry leaders, including IBM, Oracle, Sun Microsystems, and Hewlett-Packard, have placed their persuasive stamp of approval on the Web services concept. As a March 2001 InfoWorld report concluded, "With all of the major software vendors now backing Web services, little doubt remains about the general direction in which the industry is heading in terms of the dominant environment for business applications."

    Industry researchers agree. A January 2001 study by the Stamford, Conn., based e-business consultancy Gartner Group predicted that all leading e-business platforms would support at least the basic Web services infrastructure by no later than 2003, forecasting that, by that year, more than 75% of the Web services in production would be supported by IBM, Microsoft, and two or three other vendors. IBM, among others, sees the same vision of the future. "Web services are a very profound advancement for e-business," Scott Hebner, IBM's director of marketing for its WebSphere product line told InfoWorld. "They can change the Internet into a platform for integration."

    And therein lies the revolutionary secret of Web services. Within the next several years, if all goes as planned, vast numbers of Web services will work together over the Internet, as seamlessly as if they were part of the same application. The benefits to business in terms of increased productivity and efficiency-not to mention the competitive advantages arising from real-time business intelligence-will be enormous.

    But is all this just another Java-rules-the-world pipe dream? ASPnews' Phil Wainewright, after some serious introspection, doesn't believe it is. He admits that, "when it comes to mainstream business use, all the same kinds of doubts that hung over Java in 1995 hang over Web services today-doubts about security, integrity, reliability, and interoperabilityÖ Nevertheless, the lessons of the past six years suggest that Web services will eventually succeed in earning [their] credibility." He notes that, "back in 1995, while Java applets were making people sit up and look at the browser, the real progress was being made behind the scenes on the server," to the point that "Java is now at the heart of the component architecture on which the world's leading application server platforms are built. It has won the trust and confidence of global enterprises."

    Wainewright predicts a similar course of events for Web services. "Today," he says, "Web services are starting to make their impact with functionality delivered directly to a user through a Web site. But again, the real action is going to happen back in the network, as the industry works to build a robust commercial architecture for server-to-server Web service transactions." Will it happen? Wainewright has no doubts. Reflecting on the once-derided Java, he points out that "the achievements of the past six years have fulfilled many of 1995's wildest dreams." As for Web services, he says, "Expect the next [six years] to deliver a whole lot more."

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