Web Services: The Software Utility

Will dominance in the House of Database translate into leadership in Web services?

Competition is good: This maxim of unfettered capitalism is taking a beating here in California, where rolling blackouts are now part of the nightly weather report. Energy customers of all shapes and sizes, used to the steady, relatively fixed cost of power, are suddenly out in the middle of an OK Corral shootout. Economists and politicians will forever argue over whether deregulation is working, didn't work, or never really had a chance to work thanks to strings attached by prevailing interests; but the bottom line is that our notion of a "utility" no longer matches the current state of power generation. All the energy is expended on endless heated debate.

What happens matters to IT. First, it matters on a symbolic level: How many times have we heard that the endgame of some software titan's strategy is to become a "utility" - a Web tone, query tone, or other simple, indispensable service? Today, the word that comes to mind when we talk about utilities is "troubled." Second and more concrete, thanks to stable, robust, and economically feasible power, the IT industry has prospered, letting loose into the world a genie in the shape of mission-critical applications that depend on cheap, reliable power. In California (and perhaps elsewhere soon) it feels like an entire way of life has become less certain. Forget the nerds; the early 21st century is about the revenge of the Ewings.

IT ingenuity will be critical to making the energy market efficient. But, as our current economic slowdown suggests, the IT industry is still climbing its own steep learning curve. The "network is the computer" makes for a nice marketing slogan, but the reality continues to challenge current approaches to building higher organizational intelligence, engineering smarter data and application integration, and putting together a robust infrastructure. Now, we can add to the vagaries of networks, bandwidth, and the Internet the availability and price of electric power itself. How will IT applications insulate users from that?

SOFTWARE POWER PLAY

In ways small and large, the IT industry is realigning itself for the next great crusade: the establishment of Web services as the dominant IT delivery and deployment architecture. By now, all of the major IT solutions providers - Computer Associates, Hewlett-Packard, IBM, Microsoft, Oracle, SAP, Sun Microsystems, and others - have set out their own concepts of Web services, albeit subject to change. Enterprise information portals of the future will be the primary interface for Web services, although much of the critical integration work will happen behind the scenes.

Definitions vary, of course, but the basic framework, built upon extensive use of XML, SOAP, UDDI, and other integration standards, is to offer users a suite of "services" accessible via the Web or private networks, rather than via desktops laden with software. Web services embrace, or perhaps build upon, notions of collaborative B2B commerce, enterprise application integration (EAI), workflow, and business process integration. However, the idea extends deeper than just software integration; HP and other hardware vendors are introducing "server appliances" that offer embedded solutions aimed at specific applications, such as email. Server appliances anticipate greater intelligence in the network itself - intelligence available, that is, as long as the network is reliable.

It's interesting to consider Web services in light of current energy difficulties. The availability of economical and reliable power could begin to dictate where Web services are physically hosted. In the West, California's Silicon Valley and environs would not seem like the best choice; Texas, Utah, and Colorado are probably on their way to becoming the great hosting citadels of the future. However, current power grid architectures might leave West Coast operations with few alternatives but to pay - or relocate.

IT organizations could get very interested in outsourcing at least the physical management of energy-hungry servers, storage, and other systems - especially as Web services providers sweeten offers with surrounding business or telecommunications services. Then again, few CIOs would bet critical business applications on a network that could disappear under a rolling blackout: Despite the cost, it might be safer to maintain applications and systems in-house where IT can manage disaster recovery, failover, and switches to other sources of power.

With the major software providers, we will surely see more consolidation as the competitors fill out their basic suites of "services" applications. HP's recent acquisition of Bluestone Software demonstrated how critical application server and integration technology will be to Web services; now that Sybase has picked up New Era of Networks Inc., one can't help but wonder how many acquisition offers companies like BEA Systems, Iona, and Silverstream are entertaining.

Oracle is betting its future on the assumption that most businesses would rather work with a single vendor than a partnership of many vendors - and that it is unique in its ability to provide such a single-source solution. However, Oracle has its own integration challenges, particularly in the areas of business intelligence (BI) and data warehousing tools; we will see how well they have addressed them in the 9i release.

Oracle is billing this release as the most significant since Oracle 7: And while 9i aims to satisfy a number of scenarios, the new release strongly supports Oracle's larger strategic course toward Web services. Oracle's most convincing buzz about Real Application Clusters, the biggest technical innovation in 9i, articulates how this approach supports application-hosting scenarios for major enterprise systems, such as SAP's R3 System and Oracle 11i Applications Suite. The company's message is to reduce cost by reducing complexity - and what better way to do that than by allowing Oracle to provide features as a fully configured service?

DUEL IN THE HOUSE OF DATABASE

Far more than just a postscript to the once fiery database wars, IBM's pending acquisition of Informix Software could be a significant stroke in the coming Web services contest. As databases grow bigger and consume more of IT's server, storage, and pricey personnel - and as XML data integration middleware matures - hosting elsewhere under a Web services contract starts to look like a bright idea. The kinds of services that might surround a database implementation, such as data mining, customer analytics, and realtime BI are areas in which IBM's service organization has tremendous depth.

As many analysts have pointed out, IBM will have its hands full supporting all the database engines Informix collected over the years. At this point, there's probably no other company that would dare take on this challenge, which might be why IBM was able to acquire Informix for a mere $1 billion. In announcing the acquisition, IBM's top brass made it explicitly clear that DB2 was IBM's flagship database product. No doubt, the company will reduce the number of engines over time by folding the products into an extended DB2 Universal Database suite. But it may matter less now how deeply all of these engines are ever integrated into one - as long as the services surrounding them can create a cohesive whole when required by customers.

Oracle CEO Larry Ellison, during the company's April 24 "competitiveness" press conference announcing Oracle's "global CRM in 90 days" program - held coincidentally on the same day as the IBM/

Informix deal - scoffed at the strategic value of the acquisition. And he may be right that the deal will not substantially change the market share picture: however, the Informix network of customers and integrators will strongly increase IBM's influence in the Unix and Linux communities - far more than it could ever accomplish by spray painting penguins on city sidewalks.

Competition in the database industry is tightening; slower growth and thinner margins are pushing the remaining vendors to find other ways to infuse this critical platform with innovation. There's still a lot of competitive advantage yet to be uncovered in the data resources companies are amassing. Web services could be how such features will be delivered at a price users can afford - as long as they don't have to wait out a rolling blackout to receive the goods.