Reckless

Rebecca Dias - Product Manager, Microsoft Corporation

Web services, a business model?

Welcome to my new blog site.  Hopefully my old entries will be migrated to this new site in January.  For the better part of December I will be silent visiting customers, then family, and finally friends.

Happy New Years to all!

I had an email come across my desk last week asking about Web services business models.  What is a Web service business model?  It felt like a rememberance of .bomb past.  If you have a technology, naturally a business model must just miraculously spring up around it...

eTrade is a successful online brokerage firm.   eTrade's business model was not a result of the Internet; however, the Internet enabled eTrade to gain ground in a market that was already mature.  Established brokerage firms did not move as quickly to the Internet thereby giving eTrade a competitive edge in a new market segment, online brokerage.

I believe that enabling technology can facilitate new market segments.  Web services are enabling companies to extend their business models because the technology lowers the barrier to entry for new service creation and the potential for service outsourcing.

What are some of the killer new services that Web services are enabling?  Some key areas I have seen numerous case studies on are for data validation and cleansing, payment processing, sharing of financial data (stocks, financial reports, etc.), fraud analysis, data warehousing, location and geographic utilities, data reporting (census, taxes, etc), and much more.  Can the need for these services result in potentially new business opportunities?  Absolutely!

Who will own the market segments for services provided?  Will it be existing companies that play in the existing market segments, companies that jump on the Web services bandwagon early, or new startups that specialize in service orientation from day 1?

Web services can be argued to be revolutionary or evolutionary in nature.  The Internet revolutioninzed consumer behavior towards banking, retail purchasing, dating, and getting rid of old junk in the house.   This resulted in a slew of new companies that are still listed on the NASDAQ post .bomb.

It will be interesting to see in 5 years time what companies we can take for granted that use Web services technology as their primary enabling technology.

Published Tuesday, December 09, 2003 9:05 PM by rdias

Comments

 

Steven Vore said:

Oooh, oooh, first post, first post!

and I love that new-blog smell :-)

December 9, 2003 9:20 PM
 

SBC said:

*Web Services can certainly be a foundation brick for a business model but is not one in itself. Hagel & Brown's book - 'Out of the box' gives a good insight to the potential of *WS.
December 9, 2003 10:44 PM
 

Anthony Dias said:

Hi, just trolling around... : )
December 19, 2003 5:36 PM
 

Cameron said:

Rebecca - where would I find a read of those case studies you mentioned?
December 22, 2003 6:31 AM
 

colin adam said:


Rebecca,

I don't agree with your list of enabled services brought about from web services. They already all exist using other technologies.

It is more that web services enable existing services on the web such as payment processing to be more stable, robust (debatable), open and much much cheaper (in the long run, not just now). Basically it is a technology that provides the basis for better market competition. Companies don't need to invest $$$ to connect to a payment processing system.

cheers
colin
December 30, 2003 6:26 AM
 

Rebecca Dias said:

Now that we know where the blogs are living, I will go through and respond to all the comments.

First a big hug and kiss to my newphew Tony. If anyone needs a graphic artist with strong musical talents and a heart of gold in the Bay Area, reach out to him. He is one gifted young man!

I will check out the book by Hagel and Brown, thanks for pointing it out, I have not yet read it.

Cameron: Case Studies are located here-> http://www.microsoft.com/casestudies
You can search for case studies flagged for Web services. Don't forget that I read and review a lot of customer evidence that does not necessarily end up in the public domain as a function of my job. I try to generalize things so I am not giving away NDA based information. I put a lot of energy in timing of customer evidence as well. Sometimes we hold on to pieces and release them to the public when they will have the most impact. Sometimes we don't put the $s into creating a formal customer evidence story because numerous other stories have already been told with other companies with the same message. Or, the customer may not want to disclose what they are doing because they want to keep the information a secret to leverage the technology as a competitive advantage, etc.

Colin: Yours is a longer response and I will get to it shortly...
January 9, 2004 5:40 PM
 

Rebecca Dias said:

Colin: I agree that some of these services existed prior to Web services; however, they were more costly to integrate, often times required a leased line, often times required that both parties agree on the technology in use, generally required more interaction to understand the semantics of the messages being passed, etc.

A more appropriate statement would be killer services that Web services are reducing the cost of development, maintenance, and integration of.

I also agree that it creates a basis for better market competition as well as market expansion. Lower TCO means lower cost of services and therefore potential for services to be leveraged by companies/people with smaller pockets.
January 20, 2004 7:19 PM
 

Internet Changes Everything said:

This post from Rebecca Dias at Microsoft, asks the right questions about Web Services. The are not a business model but they will facilitate new customer centric models, which reverse the old approach of siloed product systems, each with their...
February 21, 2004 9:54 AM
 

JShinn said:

The core value proposition from Web Services is best expressed in terms of the larger Services Oriented Architecture (SOA). SOA is a specialization model of finite capabilities of function, given they must add value to the 'consumer' of the service. There are pervasive models of this approach in all mature industries - from service to manufacturing. Just as in the Struts and MVC design models, there are units of specialization and controllers that (among many things) coordinate the invocation and process results.
June 1, 2004 5:15 PM
 

Rebecca Dias said:

I agree. And like MVC, Policy in concert with Service Orientation (SO) ensures that you can seperate out the business logic from the Security and other communication requirements.
June 1, 2004 5:19 PM
 

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March 12, 2008 10:09 AM
 

Dating said:

Welcome to my new blog site. Hopefully my old entries will be migrated to this new site in January. For the better part of December I will be silent visiting customers, then family, and finally friends. Happy New Years to all! I had an email come acros

May 30, 2008 6:27 PM
 

Weddings said:

Welcome to my new blog site. Hopefully my old entries will be migrated to this new site in January. For the better part of December I will be silent visiting customers, then family, and finally friends. Happy New Years to all! I had an email come acros

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