Web services — software designed to be used by other software via Internet protocols and formats — are spreading like wildfire throughout the software industry, but according to new research from Forrester Research, Inc. (Nasdaq: FORR), it’s time for business executives across all industries to pay attention. Web services will drive productivity gains by making it easier for firms to collaborate — internally and with business partners — by interconnecting software systems regardless of the platform they’re run on.

In a new series of reports, Forrester sifted through the hype and found that:

  • Web services will ease collaboration, but executives must watch out for immature technology and vendor hype.
  • Firms should put basic “read-only” Web services that serve partners or meet internal needs into production now.
  • Execs should keep an eye on evolving Web services standards to take advantage of more advanced capabilities as they emerge.

When it comes to Web services, Forrester found that few users are on the same wavelength as their IT suppliers. Although integration, vendors’ top priority for Web services, is also the highest IT priority for most companies, of the business executives that Forrester interviewed, most were unaware of or hesitant about Web services. Despite the common integration interest, most firms don’t see how the technologies can help in today’s market conditions.

“Web services technologies can save millions in integration costs today, but companies must proceed cautiously,” said Simon Yates, senior analyst at Forrester and author of the new report “The Web Services Payoff.” “Despite Web services’ rapid climb up the buzzword ladder, 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 products and the lack of security standards.”

As Web services technology lets firms interconnect software systems faster and cheaper, it will also streamline business collaboration. But Web services won’t bring flexibility to 30 years of proprietary systems overnight. Executives should take a practical approach and choose activities that promote visibility like inventory alerts — and lay the foundation for more complex collaboration as technology barriers fall.

“In the past year, new specifications have emerged to standardize basic Web services that open up broad growth and cost-cutting opportunities,” said Frank E. Gillett, senior analyst at Forrester and author of the new report “Start Using Web Services Now.” “Companies should exploit these standards now to build simple links between internal apps and their business partners.”

These new standards aim to remedy expensive and painful problems that plague business uses of information technology. For instance, most business apps are monolithic and closed — making it an ordeal for firms to adapt them to changing conditions. Development tools that use the new standards, though, can help firms assemble more flexible apps from Net-resident services — like credit checks, shipping locators, and inventory services — anywhere on the network. However, advanced Web services standards are still immature, and the software industry is far from agreement on some key aspects of Web services, including security and transaction control.

Many vendors already push Web services as the new solution for enterprise application integration (EAI). But until 2004, when Web services’ performance improves and standards for security, auditing, and transactions stabilize, traditional EAI technologies will prevail. As executives gain confidence with basic Web services and the standards mature, by 2006 companies will apply these technologies to more complex, transactional business processes and to relationships with qualified but previously unknown parties.

Forrester will further explore Web services at its Technology Leadership Forum, in Scottsdale, Ariz., from February 3 to 5, 2002. For more information click hereor contact jkong@forrester.com.

The following reports and brief are now available: “The Web Services Payoff,” “Start Using Web Services Now,” and “Executive Overview: Web Services.”