From the Desktop to the Web: XML Web Services and .NET Providing New Opportunity for Service Providers, Application Vendors

REDMOND, Wash., Sept. 23, 2002 — Since its first commercial success in the 1980s, the PC has transformed the information technology (IT) industry. With an operating system open to third-party developers, the PC challenged the proprietary, vertically oriented service and development model then prevalent in the computer industry, thereby creating unprecedented opportunity for technology and services providers of all types and sizes to compete in the marketplace. Between 1990 and 1995, the IT industry grew exponentially. By the end of this five-year period, more than 2,000 companies engaged in the business ecosystem that had evolved along with the PC. These companies — including hardware vendors, business application companies, resellers and services organizations — brought unmatched innovation, flexibility, and value to customers.

Today, the industry stands at the forefront of an equally significant paradigm shift — the shift to XML Web services. Web services use standard XML-based protocols to programmatically interact with other Web services, regardless of the programming language, operating system or application. This, open, message-based, distributed computing model enables an unprecedented level of application interoperability and integration, and promises to spark a new generation of applications designed to seamlessly connect businesses and people to information and resources across the Internet.

.NET Brings Innovation and Opportunity

XML Web services hold tremendous opportunity for the IT industry: The market-research firm IDC that predicts Web-services-related revenue opportunity will approach US$32 billion by 2010, with IT services providing the single largest year over year increases in revenue opportunity. Creating opportunity in Web services for the IT industry and delivering the best value to customers drives Microsoft’s investment in .NET, Microsoft’s software based on XML Web services.

(The scale of that potential is underscored by today’s announcement of a worldwide joint initiative between Hewlett-Packard and Microsoft (see press release link at right) that will deliver .NET solutions to enterprise-scale companies. Already, General Mills International is utilizing such a solution to consolidate and quickly respond to real-time data from 25,000 stores.)

NET technology is integrated across the entire Microsoft software platform — in its servers, operating systems, developer tools, and end-user applications — to quickly deploy, manage and use connected, secure solutions with XML Web services. This shared XML foundation ensures that all .NET-based products work better across multiple platforms, systems and languages and among multiple computer networks.

For developers, Microsoft’s Visual Studio.NET and the .NET Framework consist of a set of technologies and tools that enable developers to build traditional software applications, Web-based applications, and “smart-client” applications that have the ability to work and process information whether connected to the network or not. And since Visual Studio and the .NET Framework were built from the ground up to support XML Web services, applications built with them can function over networks using uniform protocols such as XML, SOAP and HTTP. This set of message formats, collectively referred to as “XML Web services,” serve as a meta-language built into the core of all Microsoft technology.

These solutions provide the potential to enable faster, more agile business integration, transforming how organizations do business with each other. XML Web services provides a common language for applications, streamlining business-process flows and transactions among .NET-based products and services, and enabling robust integration of enterprise applications built on XML Web services on any platform. In addition to enhanced interoperability across systems, XML standards also provide greater content security for information sent across computer networks through the use of encryption, electronic keys and access control tags. XML Web services are poised to deliver a whole new level of productivity and return on IT investment.

“From day one, Microsoft has focused on delivering a software platform that not only delivers the greatest value and return for customers, but just as important, the greatest innovation and growth opportunity for the partners serving them,”
says Sanjay Parthasarathy, corporate vice president of the .NET Strategy Group.
“.NET is no exception. The Microsoft platform and .NET provide the fastest, most reliable and comprehensive approach for building and profiting from the next-generation business solution. We believe .NET is a catalyst for the emerging Web services ecosystem.”

Opportunities for Application Vendors

Leading business application vendors are moving their solutions to .NET to help organizations integrate disparate systems, unlock valuable data, and transform relationships with business partners and customers. AP Automation + Productivity AG converted its P2plus ERP system to .NET. Their existing system provided all that conventional ERP systems offer — integrating production planning and control, merchandise management, finance and accounting, e-commerce, intranet/extranet, document management, workflow, and CRM — but the company wanted to do more.

Structural diagram of AP AG’s P2plus ERP system.

Harald Witte, CEO of the German-based firm, says his company wanted to develop P2plus to support all types of collaborative and e-business scenarios, all in a unified, customizable structure that delivered valuable information to users through an intuitive Web-based interface.

“If you want to develop a software application within a Web-based environment, I think that .NET is the best solution you can choose,”
says Witte.
“We get better programming structures, better tools in the development environment, and better teamwork assistance for the programming group. And we get the same level of functionality that we had before with significantly less code.”

Basing the P2plus system on .NET has differentiated AP Automation + Productivity AG’s product from the competition, Witte adds. At a time when the market for enterprise software is weak, AP AG’s revenues are growing 35 percent a year.
“If you sell ERP solutions, customers want to buy the software now and use it for at least seven or eight years. Because we base our solution on .NET, we know, and our customers know, that P2plus will have a long lifecycle. This makes our product more attractive to value-conscious customers.”

“The .NET Framework will continue to have great impact in the future,”
says Witte.
“Two years ago I had problems appreciating Bill Gates’ announcement that Web services and .NET would be as important as Windows. But now I see he was absolutely right. Open communications based on XML and the .NET Framework will have a very great impact on the industry.”

.NET technology has also helped AP Automation + Productivity AG codify its product offerings. Previously there were two technology infrastructures, one internal to the company and another operating the Internet. With .NET, both the internal company infrastructure and systems on the Internet run on compatible frameworks.
“This opens the door for more open communication, collaboration and interaction,”
says Witte.
“With our new product generation, P2plus, ERP and e-business are both based on the same platform, without any additional cost for interfacing or different server environments. This allows our customers to implement e-business infrastructures at a much lower level of cost.”

System Integrators Find Opportunity with .NET Technology

In addition to enhanced developer productivity, Microsoft .NET technology extends the opportunity for systems integrators and consulting firms across all industries and customer segments. By removing the complexity of integrating disparate applications, data sources, and systems, .NET-connected software enables systems integrators redirect resources to higher-value solutions and services with the potential to deliver opportunities for new ways of doing business.

Accenture, the global management and technology services company, is recognizing increased return on investment for both their customers as well as their own businesses as they use their Microsoft expertise to build reusable frameworks and methodologies for rapidly delivering .NET-based solutions to customers across industries.

According to Tony Roby, a partner in Accenture’s Global Architecture and Core Technology group, many companies he works with are using .NET technology to build Internet-based systems.
“We have a number of projects underway with clients who are using the .NET Framework in various ways,”
Roby says.
“We find that it’s a better way to build applications or services for Web services, because it’s a cleaner, more robust and better organized set of technologies than what was available previously.”

Roby describes a recent project in which a retail banking solution, based on a core mainframe application, has been extended using .NET technologies to create a sophisticated Web-based front end.
“We used the .NET Framework to communicate with the back-end banking engines,”
Roby recalls.
“.NET not only puts in place a more capable front end but also lays the foundation to open up aspects of the retail banking engine as a Web service.”
This creates new opportunities to transform how the bank delivers its services and interfaces with its customers.

Roby’s team has also been involved in the development of e-government initiatives, which use Web services as a common way to deliver functionality to constituents and to interact with other government agencies.
“We’re working on an e-Government Accelerator, where forms and interfaces are built on .NET technology. It doesn’t matter what the underlying technology platform is.”
.NET, according to Roby,
“provides a common interface that delivers documents and forms across the Internet as a Web service.”

Roby added that a key benefit to using .NET is the superior developer tools Visual Studio .NET provides for clients building products or services for the Web.
“The .NET Framework makes the entire development process cleaner and more productive,”
he says.
“Code that was formerly very laborious and complex can be captured in one or two lines.”
Because the underlying code is cleaner and more consistent, applications are easier to deploy and operate with more stability.

“A decade ago, the PC provided a common platform for people to write applications to,”
says Roby.
“Today, Web services and.NET provide a network-based platform through which you can deliver software, applications and business processes. Delivering services is what Web services is all about, and you have to have a robust underlying platform like .NET to make it work.”

Designing and building enterprise applications is one of the primary services of G. A. Sullivan, a global e-business solutions company based in St. Louis. G. A. Sullivan builds applications for the financial services industry, including insurance, banking and securities. The firm also works with clients in healthcare, manufacturing and several other industries. Don Benage, the company’s chief technology officer, says that the core of G. A. Sullivan’s business is advising customers as they define their technology needs, then developing applications and systems based on this advice. With the end of the high-flying dot-com economy, customers are much more careful about how they spend their technology budget, Benage says.
“Since the bubble burst, there’s a lot more scrutiny on how dollars are spent on technology. So instead of companies coming to us to say, ‘Build us X,’ they now say, ‘Help us determine if we need an X, and if we need it, help us justify the expense to the people who write the checks.'”

.NET has helped G. A. Sullivan provide its customers with superior quality systems delivered quickly and cost-effectively.
“Customers are concerned about the blank slate problem: They don’t want to hire you to take a brand new computer, load it up with basic programs and then start writing their custom applications,”
says Benage.
“They don’t want to pay you to write everything from scratch.”

According to the consultants at G. A. Sullivan, Visual Studio .NET and the .NET Framework allow the company to turn out top-quality Web-based applications with rapid turnaround times.
“We tell people that when we start with the .NET Framework,”
says Benage,
“we aren’t starting from scratch. There are a lot of good pre-configured capabilities already built into the framework and the .NET Enterprise Servers. Of course, we add intellectual property on top of this, but there’s no denying that the .NET Framework gives us a huge running start. We believe it allows us to build something of very high quality with a very rapid time to market.”

One key way.NET makes it easier for developers to create new applications enabled for Web services is the .NET Framework.
“One of our top developers told me that to develop a Web-based application used to take 15 to 20 percent longer than developing a standard, client-based application,”
says Benage.
“Web-based applications were simply more work. The .NET Framework has leveled the playing field. Using the .NET Framework, we can now develop Web-based applications ready for Web services in the same amount of time as a standard application.”

The future holds great opportunity for companies developing products and services for the Web, according to Benage.
“It’s an exciting time,”
says Benage.
“Web services and .NET represent a nexus with huge opportunities for companies willing to get out in front and lead.”

In addition, Web services and the .NET together point to a future where business processes and fundamental ways of doing business are themselves transformed. As more and more data and applications across multiple companies are connected using Web services, information, knowledge and capabilities are freed to work together in new, more productive ways. Business processes can be reengineered to be more efficient, and information can be interpreted and shared more strategically, leading to better business decisions. Developing strategies and applications to transform businesses into more competitive organizations represents a major new opportunity for integration partners.

.NET Delivers Long-term Business Value

Because industry-standard XML Web services technology is being integrated across Microsoft’s entire software platform, and because the .NET Foundation embraces multiple languages, platforms and client devices, solution providers and application vendors can capitalize on existing customer deployments, technical skills, and intellectual property to do more for clients — whether achieving operational efficiencies, improving employee productivity, or getting them closer to their own customers and business partners.

.NET delivers on the core principles of Microsoft’s long-standing commitment to the partner community:

  • Low total cost of ownership: .NET provides the industry’s best total cost of ownership benefits by enabling partners to take advantage of existing skills, investments and assets.

  • Fast time to market: .NET accelerates time-to-market through an integrated suite of highly productive developer tools and a consistent programming across all tiers of an application.

  • Increased revenue opportunity: .NET opens up opportunities to deliver innovative and empowering solutions for IT professionals, business decision makers, and employees in any industry.

  • Enablement: Microsoft invests in an extensive range of initiatives to help partners build and grow a successful business on the Microsoft Platform, including technical training, sales training, early access to emerging technologies, online communities, technical “know-how, show-how,” and branding opportunities.

As the industry moves forward around an XML Web services-based model, Microsoft .NET will continue to help partners recognize steadily increasing opportunity by breaking down the technological barriers between people, information, systems and devices.

“Early movers and thought leaders in .NET and XML Web services, regardless of their size, have the opportunity to become tomorrow’s market leaders,”
says Microsoft’s Parthasarathy.
“Smaller, more nimble companies can establish niches in emerging areas such as Web services security, subscription services or industry-specific XML schema.”

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