JPMorgan, Schwab, Prove Web Services Is More Than Just Hype

In October 2002, Wall Street & Technology ran a feature article titled, "Can Web Services Live Up to the Hype?" Just over a year later, the answer appears to be a resounding 'yes.'

Consider JPMorgan, a company that recently faced the all-too-familiar challenge of having to quickly integrate several different back-end financial data repositories with research analysts' Excel spreadsheets running on hundreds of trading-floor PCs. The back-end financial systems were built on several Java-based application servers running on Sun Solaris, while the PCs used a mix of Windows NT 4.0 and Windows XP. To complicate matters even further, JPMorgan needed to support operations in various parts of the world - Asia-Pacific, London and New York - but remain flexible enough to handle constantly changing user requirements. Traditional solutions to this integration challenge would have required writing several custom adapters to handle the massive exchange of data. Any changes to the system - adding users, modifying the data format or including new data sources - would have demanded rewriting some of the code that supported the application, which would have been time consuming and expensive.

JPMorgan opted for a different solution to its business problem - Web services. Implemented over a year ago, JPMorgan's Web-services solution was so successful that it now forms part of a wider publishing suite, which provides a collection of Web-based and desktop applications for the company's financial analysts. The system easily scales as adoption grows, and it is very simple to modify. The Web-services solution leverages existing IT assets, resulting in a lower cost of deployment and a fraction of the ongoing support necessary with alternative approaches.

JPMorgan isn't alone. Credit Suisse First Boston (CSFB), Visa International, Charles Schwab and Germany's Bank Verlag are only a handful of the financial institutions that are committed to implementing Web-services technology. They, and others, have discovered that Web services offer a simple, flexible and low-cost mechanism for application integration - a task that is consistently among the top concerns of today's CTOs. But what makes Web services so unique, and why has there been an increase in Web-services implementations by financial institutions?

Standards, Standards, Standards

The power of Web services lies in the standards that underpin the technology, and the unprecedented level of support these standards enjoy. Based on widely adopted industry standards such as eXtensible Markup Language (XML), Simple Object Access Protocol (SOAP) and Web Services Description Language (WSDL), Web services can easily integrate wildly different applications, written in different programming languages and running on different operating systems and hardware, while using universally available Internet protocols like Hypertext Transfer Protocol (HTTP).

Within the past year, several additional standards have emerged that make Web services an even more powerful integration technology for the financial-services community. For example, the WS-I (Web Services Interoperability) Basic Profile specification has ensured that all Web services work well together, allowing financial-services companies to integrate disparate systems effectively. In addition, Web Services Security (WS-Security), another industry standard, has helped promote message-level security of Web services.

As simple as it is to create Web services today, there is widespread interest in supporting financial-business projects that go beyond simple and relatively synchronous applications, like the applications described at JPMorgan. To solve more complex, business-critical integration problems, we need extensions to SOAP messages that guarantee message delivery, eliminate message duplication and provide for message ordering. We need Web services that converse in a loosely coupled and asynchronous manner.

The answer is a new standard, Web Services Reliable Messaging (WS-RM), which provides the essential guarantee that messages sent by an initial sender will actually get delivered to the receiver - and delivered only once. WS-RM goes even further by ensuring that if messages are sent in a critical sequence, they will be delivered in the correct order. There are few business processes within financial-services organizations that can be deployed without these fundamental guarantees.

Another new standard to watch in 2004 is Web Services Addressing (WS-Addressing), which provides a transport-neutral way to address Web services and messages, and which allows message transmission through varying transport protocols and other intermediaries. Web Services Reliable Messaging and WS-Addressing are a powerful combination that will allow pure, standards-based Web services to solve a wealth of integration problems that previously required complex, expensive and proprietary middleware or enterprise application integration (EAI) solutions.

The current and future state of standards will continue to drive the value-add and business benefits inherent in Web services technology.

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