IBM Pushes Potential For Web ServicesIBM Pushes Potential For Web Services

A week after reporting weak growth in its IT-services business, IBM is releasing a wave of software in its WebSphere line designed to work better with new Web-services standards and target specific industries. It's also putting in the field thousands of consultants newly trained in Web services, an area that could be on the cusp of rapid growth.

IBM updated its WebSphere integration server, a run-time environment designed for applications written with the Business Process Execution Language, and says it will sell consulting services to help customers assess their IT environments and plan for using software written with Web-services specifications. The company also unveiled software and services aimed at the consumer-pro- ducts, energy and utilities, and government markets. This week, IBM plans to release version 5.6 of WebSphere Commerce software, designed to help customers better connect business processes among channels within and outside of their companies.

The Business Process Execution Language is a specification for bringing together multiple Web services as part of an interaction between companies. BEA Systems, IBM, and Microsoft last year submitted the BPEL specification--co-authored by SAP and Siebel Systems--to the industry-standards body Oasis. IBM's newest release lets developers visually construct workflows written with the specification. During the next two months, IBM will launch additional products and services for companies using Web services. "People want to know whether they're getting in over their heads," IBM director Bob Sutor says.

In IBM's first quarter, sales of WebSphere software rose 24%, and overall software sales climbed nearly 11%, to $3.5 billion. But the 9% revenue growth, to $11.1 billion, in its Global Services unit was viewed as disappointing--most of the gain came from a weak U.S. dollar. IBM says the worldwide market for consulting projects related to Web services and standards-based application integration--known as service-oriented architectures--is about $15 billion this year and could total $200 billion between now and 2008. The company says it has trained 35,000 consultants in skills related to Web services.

But consulting and IT-services contracts for these projects account for less than 1% of IBM's Global Services revenue, says Sophie Mayo, an analyst at market-research company IDC. "I'm very bullish about this market but more in coming years," she says. Web-services consulting projects, which can range from $30,000 to $400,000, also can result in added WebSphere sales.

In another move to boost software revenue, IBM has realigned much of its sales and services organizations around a dozen vertical industries. The company released software with specific functions geared to the energy, consumer-products, and government sectors. "I've never met a customer who didn't want to talk about IT within the context of their own business," says Steve Mills, senior VP for IBM's software group.

Most of the software that IBM introduced is based on its WebSphere middleware product, which uses Web-services standards to integrate data across multiple applications and operating systems. Using WebSphere, companies can extract information from disparate databases and feed it to user applications to provide real-time business intelligence. For instance, IBM is working with mapping software vendor ESRI Inc. to build systems that draw on business data to generate three-dimensional geographic displays of sales territories, service areas, and product demand.

-- with Paul McDougall and Beth Bacheldor