Viva La Revolution ... But Not Quite Yet

• 08/31/2001

A recent report by Jupiter Media Metrix says that only 16 percent of U.S. companies will use Web services technology — software which enables application to application collaboration over the Internet — in the next year to discover and interact with new business partners. According to Jupiter this means that the Web services so-called revolution won't truly begin to affect companies' broader business decisions for another 18-24 months. However, Jupiter analysts expect Web services software to be a valuable driver for cutting internal applications costs during the medium-term.

"Despite the enormous potential of Web services to transform the landscape of the software industry, the technology will find its early uses in the humdrum role of tying together an enterprise's internal applications," said David Schatsky, research director and senior analyst, Jupiter Media Metrix in a prepared statement. "Visions of companies dynamically 'discovering' and collaborating with suppliers and partners through Internet-facilitated interactions is still within reach but the most realistic opportunities for companies over the next 18-24 months is to use the Web services software for cutting costs."

Key findings include:

• Sixty percent of companies will use the Web services technology for internal applications such as retrieving customer information from a customer relationship management (CRM) system or passing a transaction from a front-office system to a back-office system.
• Fifty-three percent of companies will deploy Web services technology for interaction with existing suppliers and partners for purposes such as authorizing credit card transactions or conducting credit checks.
• Twenty three-percent of companies will not use Web services technology at all within the next year.
• Forty-four percent of companies are aiming for new revenue opportunities through the use of Web services software, while 49 percent view the technology as a way to cut integration costs.

"Much of the activity in the evolution of Web services will and should take place below the radar of most business managers for the next 18 months or so," Schatsky said. "But business managers, who are increasingly involved in application vendor selection, should become aware of the increasing role that Web services will have in the selection and deployment of enterprise applications. Jupiter expects that enterprise application vendors will begin to remake pieces of their applications around the Web services architecture by late 2002."

The survey was conducted in July 2001 and included responses from 471 individuals who were targeted by job function (CIO, CTO, Director and/or VP of IT) and company revenue ($50 Million or more).