Web Services Are Fulfilling Their Promises, Says Yankee GroupWeb Services Are Fulfilling Their Promises, Says Yankee Group

The Yankee Group estimates that 65% of IT development budgets go to the integration of systems. According to the Yankee Group 2004 U.S. Enterprise Web Services Survey, web services promise to change that by offering a platform-neutral, open standard, reusable, loosely coupled approach to interoperability. Web services are a means to solve many interoperability issues in a cheaper and faster way.

Survey results show that web services have been widely used by enterprises, but penetration is low. Enterprises that have implemented web services agree that the technology brings key benefits. Together, this means web services have passed their tests, and enterprises are gearing up for higher spending on web services across all business processes. The majority are using web services projects to move toward a service-oriented architecture (SOA) and most are concerned about security.

"As web services and SOA adoption cross the chasm, they have significant impact on the IT industry," says Siew-Joo Tan, Yankee Group Business & IT Services senior analyst. "They will accelerate the outsourcing markets and enable the on-demand market. Application suite vendors, security vendors, integration vendors and external service providers, among others, will feel the impact of widespread adoption of web services."

According to Yankee Group, the transition to web services and SOA represents a short-term opportunity for external service providers. They also point out that if integration is addressed architecturally rather than through software products, demand for both integration technology products and systems integration will fall off.