Web Services are being touted as the next major technological innovation that will solve all the problems that haunt us today. Web Services bring about an entirely new way of developing software. Anyone can publish his services on the web using standard internet protocols and the consumers can combine these services in any way to provide a higher order service, and in the process everyone gets his share of revenue.

The emerging Business Models

Software as a Service
In the beginning software exited as applications that could be installed wherever the user wanted. All the services that the software provided would be on the same machine in the same executable. Web services software to be delivered as a service. Functionalities can be delivered as a set of web services. Organizations can focus on their core competencies and get other services from organizations in complimentary areas. In future web services will be the unit of reuse just as components are now.

There would also be room for software aggregators, who would bring all the services under one roof. This would be advantageous to the developer as he can collect the revenue from one single unit. The consumers would also benefit from this as they can pay for all the services at a single point.

Business to Devices
There has been a boom in the device segment and over the next two years we can expect to see devices that can handle routine tasks in the absence of an individual. This kind of devices would have to be supported by services.? An example would be a refrigerator ordering milk over a web service from a mart. The mart would then send a confirmation to the individual for his acceptance of the new order and then accordingly send in milk to the address specified.

Business Integration
In today's world every business needs to communicate with its partners and customers and more often than not, this interaction involves data exchange. The problem arises when both the ends do not speak the same data interchange language. Web Services use XML for this data interchange and thus can serve clients on any platform and any device.

Development Opportunities

Providing Information as a Service
Currently all the information is available as static HTML pages. Thus applications find it difficult to query this store of data and provide the user with information for use. Web Services liberate your application form having to parse the HTML and try to understand the content. It provides the information that you need. This gives rise to better data reuse.

Functionality as a Service
Some general functionality is accessed by various applications a lot. Such functionality can potentially be provided as a Web Service. Examples include Credit Card Validation, User Authentication etc.

Characteristics of a Viable Web Service
For any web service to be economically viable, it will have to have a way of generating revenue. And generating revenue would mean having to charge the consumer for using the service.

However, there would be many players offering the same service or a functionally similar service free of charge just to penetrate the markets or as a tool to increase their brand value and brand recognition. However as enterprise application move from the client server model to the web service model, the need would be for a certain level of reliability. Service Level Agreements would be the major factor that would dictate the price of a service. For similar functionality a service that guarantees an uptime of five nines would be costlier than a functionally similar service that guarantees an uptime of 99%. The major factors that would play a part in the pricing would be uptime, security level and the response time.

When the user is paying for using a service, the obvious question will be is it cheaper than the cost of maintaining such a service locally. If it is cheaper to install and maintain a similar service at a lower cost, it would be the preferred approach.

For a Web Service to be successful, it will have to meet the following criterion:

• The functionality should not be so small that there are many players offering the same service for free, or that it is cheaper to implement locally.
  
• The functionality should not be too complex. If it is too complex, it would be required by very few consumers, which would reduce the market. Thus it would have to be priced higher and at a higher price it may be more viable to have a local implementation.
  
• The cost of subscribing to a service should be lower than the cost of running it locally.
  
• The data transfer cannot be too large. The bandwidth constraints will come into play if huge amounts of data need to be transferred.
  
• The frequency with which the service is invoked should not be too large (unless of course the data is very volatile). If a service needs to be accessed very frequently, it may be cheaper to implement it locally.

Conclusion
Web Services are technically simple, but have the potential to dramatically change the way be develop software and the business models. It is the next step in evolution of reusability: from objects to components and now to services. But while XML, SOAP and WSDL will continue to be successful as technologies to loosely couple different applications, the use of these technologies to build successful web services would be an altogether different issue. To develop a viable web service there are too many constraints that would need to be satisfied. It is a thin line that divides success from failure. The mistakes of the dot-com era can be repeated. The technologies are here to stay, but would the business of web services be successful remains an open question. However, the one thing that we can be sure of is that there are going to be major changes, and these changes would be technologically good.

Sajith Madhavan is on the Customer Fulfillment team at Stylus. He lives by the saying "Nothing is too small to know, and nothing too big to attempt."

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