Start-ups may fill Web services gaps

Players: Start-ups may get window to fill gaps By Margaret Kane Staff Writer, CNET News.com November 8, 2001, 4:00 a.m. PT If small start-ups want inspiration to take on industry giants in Web services, they need only look to BEA Systems. BEA began doing business at the height of the PC revolution in 1995, when the largest companies--IBM, Microsoft, Sun Microsystems and Oracle--were believed to have carved up most of the territory in high technology. Its ambitions seemed modest at the time: to fill in gaps left by major software manufacturers with products that allowed its customers to connect programs in various areas--linking sales to inventories, for example. Last year, the upstart from San Jose, Calif., recorded more than $800 million in revenue and is widely considered the leader in its field. "The tech market evolves. It was the same question when BEA was a couple of guys and they were going to go take on the middleware market. They did it, and they did it well," said Mark Atherton, vice president of worldwide marketing at Web services company Asera. "Each time there's a big change in the market, there's always one or two guys who make it through." Today, a new generation of start-ups is trying to follow the same path, this time using technologies to link Web services and software--including BEA's products. Although there is always room for new technology and innovation, the head start of so many major players in the industry may make it harder for new companies to break through. Microsoft, IBM and Sun are among the industry heavyweights touting ambitious plans in the emerging Web services field. Asera These Web services start-ups hope to take on the likes of Microsoft, IBM and Sun Microsystems. Roll over the company name on the left to find out more. Avinon Cape Clear Epicentric Grand Central Networks Kenamea KnowNow Oblix OpenDesign VelociGen Ximian But true to the pioneering nature of high technology and the Internet, there is no shortage of start-ups planning to join the fray. Companies such as KnowNow, Kenamea, Oblix, OpenDesign, Grand Central, Avinon, VelociGen and Epicentric are attempting to ride the industry's latest wave by providing Web services development tools, secure networking and other related technologies. Even so-called open-source initiatives such as Ximian's Mono are gathering momentum. "Any major change in the information-technology landscape represents the opportunity for a new ecosystem to evolve," said David Schatsky, research director at Jupiter Media Metrix. That cycle will be fueled by the potential high stakes involved in Web services, which proponents promise will change the way software applications--and businesses themselves--communicate. A fistful of standards From a technical standpoint, at the heart of Web services is a new set of protocols designed to help different software applications communicate with one another. Some refer to the process as "componentizing," or breaking down complex pieces of software so that a developer who wants to perform individual steps can get access to those specific parts of an application in building a Web service. Start-up says multiple standards can workBob Pasker, CTO, Kenamea November 8, 2001 The idea echoes earlier development efforts using Microsoft's Component Object Model (COM) scheme and the Common Object Request Broker Architecture (CORBA) favored by Java supporters. But there is one important difference. Where COM and CORBA relied on proprietary protocols and specifications, Web services are based on four key standards: Extensible Markup Language (XML); Simple Object Access Protocol (SOAP); Universal Description, Discovery and Integration (UDDI); and Web Services Description Language (WSDL). To understand how these protocols work together, imagine an ordinary phone call. In Web services parlance, XML represents the conversation, SOAP describes the rules for how to call someone, and UDDI is the phone book. WSDL describes what the phone call is about and how you can participate. While the rules of engagement in the Web services world are clearly defined for all software makers, the major technology companies clearly hold the advantage. Still, analysts such as Schatsky believe that start-ups may have a window of opportunity before larger players ship Web services technology to their customers. "No matter what your application does, if you have three vendors out there, all of whom have support for Web services, and you don't, you lose," he said. At present, the most fertile ground may be the development of tools to help companies create their own Web services or to deploy new ones. Smaller companies, however, must find a way to compete for this business against the likes of Microsoft, IBM and Sun, which have all launched Web services campaigns to build support for their specific technologies. Asera's Atherton hopes that his company will be one of those that survive alongside the industry leaders. Although companies like SAP are promising to build support for Web services into their applications, he doesn't see customers jumping to take them up on it. Instead, he thinks this will be their response: "That's interesting, but if I've spent $100 million on these applications, I'm not going to rip these all out, with all the customizations I've built in, just to implement Web services." Companies such as Asera hope to build Web services that can work with all computer systems so that there's no need to rework applications, as SAP and others are suggesting. "If you look at most of the big vendors (other than Microsoft), their strategy around Web services is an adjunct to their existing services," said Annrai O'Toole, executive chairman of Dublin-based Cape Clear, a Web services software maker. "If IBM comes in, they draw you the beautiful new WebSphere diagram and it has a shiny new pipe called SOAP, and they say, 'Look, we added Web services.' You need products that aren't bolt-ons, but are true, native Web services products." A limited life span The problem that companies like Cape Clear and Asera will face are similar to the ones encountered by application manufacturers: a limited life span. Eventually, large software companies will re-create any new, desirable tool in their own products. And even if customers demand that their software work with many other systems, it's not hard to imagine the IBMs of the world providing that technology. "Companies like Cape Clear are banking on the idea that they can innovate faster than big tech companies," said Frank Gillett, senior analyst at Forrester Research. "They've got one or two paths: Either out-innovate the big guys continuously, or build something cool and hope (to) get bought. Microsoft will catch up and incorporate enough (new technologies) to dissuade people from buying third-party tools." Others are pursuing a third option, acting as a type of brokerage that helps customers find, buy and deploy the Web services they want. That's what companies such as Grand Central and Lucin are trying. On the plus side, these companies don't have to join the software development race; on the downside, it will take at least a year or two before most companies discover needs for Web services, let alone look outside to get them--assuming the trend takes off at all. "The biggest activity over the next 16 to 18 months will happen internally, as companies try to understand what it is and get their feet wet internally behind the firewall," said Massimo Pezzini, vice president and research director at Gartner. A recent Gartner survey of senior technology managers found that 60 percent said they planned to work with Web services only internally in the next year. That's why Grand Central CEO Craig Donato says it is imperative for new businesses in this market to focus on helping companies, not just on developing new technologies. "Web services are very revolutionary from a business perspective, but not revolutionary from a technology perspective. As a result, compared to other technology evolutions, we don't think there will be so many start-ups," Donato said. "It's not like other changes where the big guys didn't have their eye on the ball. All the big guys have their eyes on it--in fact, they're even driving it."

Start-ups may fill Web services gaps

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