The financial-services industry is abuzz with talk of another technology panacea. This time, it's a mysterious fix called Web Services that promises to solve all your IT problems.
They're being called Web services. The question is, just what are they? Industry insiders say the latest craze sweeping the world of technology couldn't possibly have a worse moniker, but then have trouble defining it themselves. The best efforts wind up explaining Web services by the protocols and standards that make new levels of application integration possible. Those standards include SOAP, WSDL and UDDI, all under the umbrella of XML.
Web services are basically about standards bodies, such as the World Wide Web Consortium (W3C), and large technology vendors, such as IBM, Microsoft, BEA Systems and Sun Microsystems, agreeing to embrace said standards when developing applications - all in the name of interoperability.
"The big thing that is different here is that every vendor has agreed to play ball," says Ted Schadler, an analyst covering Web services for Forrester Research, a Mass.-based firm that analyzes the impact of technology on businesses.
For many years now, interoperability, resulting from common standards, has been the dream of application developers and technology consumers, who long to combine applications from different vendors, without paying the high price incurred when constructing fixed point-to-point connections to link disparate applications.
Once standards were agreed upon, developers found themselves able to write code in any number of programming languages, without having to worry that an end-user's technology would be incompatible. Also, existing applications, including those residing on hard-to-access mainframes, could be integrated into complex workflow streams more easily than ever before.
"Web services best promise is in integrating applications," says Merrill Lynch Chief Technology Architect Rick Carey. The potential benefits of Web services are very attractive to a large, global institution like Merrill, he explains, because the firm has so many applications, constructed in different formats and residing in distant locations that a technology which can inexpensively locate and combine them could unlock significant synergies.
For a start, simply look at UDDI, which could function as the yellow pages of the Web-services world. Carey says that UDDI could be valuable to a colossal institution like Merrill, where locating specific bits and bytes of information isn't always as easy as one might think. A UDDI directory, he says, could operate on an inter- or intra-institution basis. For the time being, says Carey, Web services are only ready for the safer haven of intra-institutional integration.
That's because issues like security, non-repudiation (both parties are sufficiently authenticated so the transaction cannot be disavowed), redundancy (a message will continually be sent until its receipt is verified), transport (http vs. MQ Series, etc), transaction semantics (do both functions or neither), and workflow (gather information X from this application and information Y from the next) have yet to be adequately solved by Web-services architects, says Carey.
"They all handle security uniquely," he says. "They claim that they interact but it's a little more work than we would like."
As influential as technology shortcomings may be in the reluctance of executives to embrace Web services is the fact that technology vendors involved in their creation, like IBM and Microsoft, may still claim a piece of the Web-services backbone as their own. For example, it is not clear whether either of the software giant's will attempt to claim a patent on one of the established Web-services standards and then charge for their use on RAND (reasonable and non-discriminatory) terms, or, as financial institutions hope, declare the protocols industry-owned and royalty free.
As long as the patent situation remains unclear, financial-services executives like Carey will be reluctant to go too far down the Web-services path, fearing they could one day find themselves being charged for the use of what were assumed to be public protocols. Right now, Carey describes the patent situation as a "big, ugly mess."
"Remember when someone had a patent on scrolling a window?" he asks. "So there is some worry there until that settles, some concern." In response to such concerns, Carey says, it is important for financial institutions to ask vendors what their intentions are in the space. "We are being cautious and we won't let this run free until it's settled."
In the future, Web-services, he explains, might someday be used to join applications in the following workflow scenario.
"You need to have the ability to watch something as it goes through transitions. Many times messages go through a certain path and are enriched along the way. You may be trading this security for this amount and then hand it off and say, 'OK, I need clearing info.' I'll add that and send it to the next guy and then to compliance. There is enrichment all along the way. You don't want to have to burden the front-office guy with trade details he doesn't need. It is about transaction semantics," he says.
Competition comes into the Web-services world when looking into which vendor has the best toolkit or environment for creating Web-services-compliant applications, or tweaking existing applications to make them Web-services friendly. Carey says that Merrill is a strong Microsoft partner and has done work with IBM but adds that his firm wants to remain as vendor neutral as possible when it comes to Web services.
That's because remaining vendor neutral or, at the very least, remaining in a position where the firm can easily move from one vendor to another, is critical. "What if whatever vendor we chose decided to raise their prices 10-fold the next day because they know the move-away price from them is too high," he says. "We would rather have two or three vendors all providing a percentage of our technology."
Carey says he is looking at the potential of Web service with "cautious optimism" and thinks the most important thing is for the technologies to remain royalty free and interoperable. Currently, he contends, interoperability breaks down when applications are examined at the transport level. Being able to show information moving over http, the de facto standard for Internet transport, he says, is not good enough for the kinds of heavy-volume, mission-critical processing that occurs at financial institutions like Merrill Lynch.
"My first test with a vendor is asking them, 'Without http, can you still do a demo?" he says.
As for advice, Carey says it's critical to know what is being offered, not just in terms of an initial deployment but, more importantly, in the day-to-day maintenance of a Web-service endeavor and the workflow it supports. "Let's say I have an active service going and people are calling it. If I've created Web services that run on this machine and it crashes, who is affected by that? How many people were looking at it? These are all operational considerations and things you have to know."
Schadler says that Web services will have a strong impact on the world of technology. "This will be a networking phenomenon just like the Web. The Internet will become a network of software. That's the revolution part. Web-service technology does for the application what the browser did for content, makes it available anywhere, anytime, to anyone."
KEY TERMS IN WEB SERVICES
Source: TechWeb (www.techweb.com)
SOAP (Simple Object Access Protocol): A message-based protocol based on XML for accessing services on the Web. Initiated by Microsoft, IBM and others, it employs XML syntax to send text commands across the Internet using HTTP. Similar in purpose to the DCOM and CORBA distributed-object systems, but lighter weight and less programming intensive (at least initially), SOAP is expected to become widely used to invoke services throughout the Web.
UDDI (Universal Description, Discovery & Integration): An industry initiative for a universal business registry (catalog) of Web services. Led by Ariba, IBM, Microsoft and others, UDDI is designed to enable software to automatically discover and integrate with services on the Web. Using a UDDI browser, humans can also review the information contained in the registry, which is a network of servers on the Internet similar to the Domain Name System (DNS).
WSDL (Web Services Description Language): A protocol for a Web service to describe its capabilities. Co-developed by Microsoft and IBM, WSDL describes the protocols and formats used by the service. WSDL descriptions can be housed in a UDDI directory, and the combination is expected to promote the use of Web services worldwide.
XML (Extensible Markup Language): An open standard for describing data from the W3C. It is used for defining data elements on a Web page and business-to-business documents. It uses a similar tag structure as HTML; however, whereas HTML defines how elements are displayed, XML defines what those elements contain. HTML uses predefined tags, but XML allows tags to be defined by the developer of the page.