Intellectual hot property
- Article 47 of 77
- Information Age, September 2002
Web services could offer a way for IT departments to turn their in-house technology expertise into a revenue stream.
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IT departments in organisations of all sizes have embraced web services. With few exceptions, they believe the approach will revolutionise the way they build, package and integrate applications and services over the Internet.
But with this enthusiastic acceptance comes a note of caution. IT teams agree that web services is a great asset to internal application delivery and integration, but feel the technology is still too immature for integrating internal company systems with partners' systems. The prospect of using third-party web services, or allowing enterprise systems to subscribe themselves to those services automatically, is even farther down the line, they believe.
Yet there are a few trailblazers. These companies have not only extended their web services expertise to external partners, but are even selling their work to third parties. Online grocer Tesco.com, financial services providers Lloyds TSB (see box, In practice: Lloyds TSB), Dun and Bradstreet, Standard &Poor's and CheckSpace have all deployed systems to their own sites as well as to partners' sites using web services - and some are even considering selling pieces this intellectual property to competitors.
One such pioneer is the Bank of Ireland. Since March 2002, the Bank has partnered with Dublin-based tool developer Orygen to develop web services-based customer-retention applications that it has now sold to 30 businesses, generating £200,000 in royalties. “The business side of the bank is paying us to deliver software,” says Denis O'Leary, head of IT investment for retail banking at Bank of Ireland, “but now we can go back to them with added value - an extra revenue stream.”
The big easy
Proprietary intellectual property becoming a commercial product is nothing new. But only occasionally do IT departments develop software in-house that can be sold on to other organisations - the software is too platform-specific; selling and supporting it is too much of a distraction; and its wider availability can dent the unique competitive edge the organisation sought in the first place. What is different about web services is that it seems to offer organisations an easy way to commercialise their work without having to invest the same amount of time and money in supporting it.
“We've seen all aspects of this over the years,” says Jonathan Hopper, technical director for web site developer Smart421. “There have been floods of companies out there providing IT-based services, organisations such as Reuters or Press Association. [Web services] are not simply a software product you can deploy and copy. They offer a lot of scope for anyone, even hobbyists, to create software code.”
Furthermore, the ease of programming of web services and the fact that development tools from companies such as Microsoft, Borland and Rational comply with agreed standards allows organisations to add web services interfaces to their internal applications and integrate them together with relative simplicity. And since web services use the same transport protocols as web servers to transfer pages to browsers, it is also possible to integrate these applications over the Internet.
“One of the biggest advantages of web services is their ability to encapsulate or componentise applications in a portable way,” explains Gavin King, developer tools product manager at Microsoft. “Traditionally, you've had to think about installation, target platforms, managing DLLs (device drivers) and libraries. But web services are built on open standards and are a platform-agnostic way for transferring applications.”
Online grocery Tesco.com has been using web services to integrate with its partners' sites. Internet community iVillage.co.uk, for example, uses the system to link recipes to Tesco.com - when users click on the link, it will take them to the site and fill their shopping basket with the relevant ingredients. Billing is relatively straightforward, following a click-through model.
According to Jon Higgins, head of ecommerce development at Tesco.com, the advantage of web services is that these links to third-party systems are more difficult to break. “If you link two sites together [in a non-web services environment], a relatively small change in content of one site can break the whole thing. But provided interfaces remain constant, content appearance can easily be altered without causing the link to fail,” he says.
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