Web services' new promise: Integrated technologies could save millions.

• Author: Stokes, Jeanie

I.T. departments are ALREADY BUZZING ABOUT IT, AND, IF THE TECHNOLOGY EVEN COMES CLOSE TO FULFILLING ITS PROMISE, CHANCES ARE BOARDROOMS MAY SOON BE SINGING ITS PRAISES, TOO. THE BUZZ IS ABOUT "WEB services," a loosely applied name for new technologies that purport to save companies money by making it far simpler for software programs to talk to each other over the Internet and exchange valuable business data.

The goal of Web services is to allow companies to retain the costly computer systems and applications they've deployed over years, while sharing key elements with customers and/or vendors that use completely different applications and operating systems. Web services also enable companies to mix new Web-enabled programs with legacy systems and to reuse certain application building blocks rather than building each new application from scratch.

Web services thus promise to save companies big bucks in terms of application development and integration. "Promise," however, is the key word. Although a few companies are dipping their toes in the Web services water, a bevy of issues remain to be worked out before the nascent technology meets expectations.

The promise, however, is grand indeed. Worldwide revenues from integration-based e-business solutions are expected to rise 61 percent, to $54 billion, between 2000 and 2005, according to International Data Corp., of Framingham, Mass. Web services account for a chunk of that pie, and some of the nation's biggest tech companies are angling to get their share.

Those companies include Microsoft Corp., IBM, Sun Microsystems Inc., Hewlett-Packard Co. and Oracle Corp. Their participation is catching the eye of other big companies as well as the most likely users of Web services -- small-to-medium size businesses.

Still, analysts caution potential customers to be wary of an immature technology and vendor hype.

"Web-services technologies can save millions in integration costs today, but companies must proceed cautiously," says Simon Yates, an analyst at Forrester Research Inc., a Massachusetts technology industry research company. "Executives must be mindful of technology barriers, such as vendors who can't yet articulate clear business values as they put a Web-services veneer on existing product."

In short, many IT managers love the new technology's potential, but they're not always the ones buying it. Often, CEOs want to see the potential return on investment before they shell out money for new...