* Systems integration to drive Web services-related outsourcing
A year ago, Web services technology was more theory than reality, and many outsourcing service providers regarded it as a speculative market. Today, Web services are clearly becoming a lucrative opportunity for professional services companies, and the race for leadership in the category is on.
According to a study published last week by IDC, corporations will spend more than $1 billion in 2003 for consulting, outsourcing and other professional services related to the implementation of Web services. That figure will increase to $2.7 billion in 2004, IDC predicted, and the total expenditure for Web services-related professional services will reach more than $22 billion over the next five years.
Nearly half of the Web services outsourcing market involves systems integration, according to IDC. Enterprises will spend about $500 million on systems integration projects related to Web services in 2003, and that total will expand to $1.3 billion in 2004, the research firm said. Large companies will account for 72% of the outsourcing spending this year, but small and midsized companies will increase to 40% of the customer base by 2007, according to IDC.
On an industry level, IDC’s figures help to support what many Web services observers already have reported anecdotally: that most businesses need help to implement the technology. To be effective, Web services require not only the implementation of new standards such as XML and Simple Object Access Protocol, but also a reorientation of the relationship between applications. A third-party organization can provide both the required expertise on emerging standards and an outsider’s perspective to help scope out new application architectures.
In this early phase of Web services deployment, however, not all outsourcing providers are alike. Thus far, many providers are treating Web services as an outgrowth of other Web-based integration initiatives, such as enterprise application integration (EAI), while others bundle Web services in with traditional systems integration offerings. These categorizations might make sense today, but in the long run, Web services will have to be viewed as a separate, dedicated category of professional services.
Why must outsourcers create separate methodologies, staffs or even business units dedicated to Web services? Because the duration of most outsourcing contracts are from five to 10 years, and the nature of Web services will change significantly during that implementation time.
Today, Web services are being used primarily by large organizations to integrate data and applications that previously did not work well together. They are regarded by some enterprises – and some outsourcing providers – as a sort of standardized approach to EAI. This approach is useful to some large enterprises, as it takes some of the customization out of the application integration problem.
In the length of one five-year outsourcing contract, however, it will become readily evident that the true potential of Web services is not as an architecture for internal application integration, but as an infrastructure for communication between companies. Today’s internal Web services implementations will become the foundation for tomorrow’s supply chains, enabling trading partners to link applications across corporate boundaries to speed workflow and make business processes more efficient. An effective Web services initiative must include not only an architecture for integrating internal, well-known applications, but also the groundwork for integrating with as-yet-unknown trading partner environments.
When it comes to selecting a provider to help with Web services implementation, then, it is important to find one that treats Web services as a distinct strategy, not as an extension of traditional systems integration offerings. A few companies, such as EDS, already have developed separate Web services practices, and many more will follow suit. When evaluating outsourcers, be sure that your choice sees Web services not only for what they are today, but what they will be in the future.
