Singapore's NTUC Income Insurance is doing it. So is Australia's national statistics collection body, The Australian Bureau of Statistics, as well as U.S. mobile operator Virgin Mobile USA. Corporate heavyweights are experimenting with Web services, an emerging approach to application development that promises to change the way companies build and use software.
Web services are made up of pieces of custom-developed code that let two or more Web-based applications talk to each other. These services can pull a single piece of data or an entire business process. Web services advocates believe that, down the road, the technology will allow organisations to integrate and reuse software that they or others have already built. The hope is that, through the use of Web services, the pain involved in integrating systems will dissipate, leaving both companies and consumers better able to use and exchange a wide range of capabilities and information over the Internet.
Adding to the momentum, top technology vendors, including BEA Systems, Inc., IBM Corp., Microsoft Corp., Oracle Corp. and Sun Microsystems, Inc., have agreed to support a set of standard software technologies that spell out how different computer systems should interact with each other.
In addition to the data exchange format, XML, three new standards - Web services don't come without drawbacks. For the moment, most companies are keeping their Web services projects behind company firewalls because of network security and reliability concerns.
Three organisations - NTUC Income Insurance Cooperative Ltd, The Australian Bureau of Statistics and Virgin Mobile USA, LLC - provide clear examples of how to begin a Web services strategy and gauge its potential for your business.
Blowing the Web Services Trumpet...
At NTUC Income Insurance Ltd, an entrepreneurial spirit inspired the use of Web services. The Singaporean co-operative insurance society's charter, says its CIO James Kang, isn't just to make profits but to enrich the lives of Singaporeans. Since 1995, its website has been offering the procurement of household services online. The result: 200,000 happy customers are able to engage a maid, hire a tutor, find a plumber or buy insurance without the need to step out of their houses.
But the insurance firm wants to use Web services technology to engage customers via channels other than its website. Using Web services, Income plans to make its travel insurance services available via more partners' websites, including those of airlines and travel agents where travel tickets and vacation packages are bought, so that it can be closer to where its customers are, and be present at the time of need for its products. "Web services allow me to park myself in places where my customers are, and when they need my services," says Kang.
In contrast with the more traditional means of integration and data sharing, such as EDI, Web services, which offer more flexible or "loosely coupled" ways of linking applications, will allow Income to open up its systems and share a wide array of information with far less tailoring. This is especially important in fulfilling its ambition of taking its service concept global, says Kang.
While EAI packages allow companies to exchange data, they lack common standards and are expensive to implement; Web services, on the other hand, are a low-cost and effective protocol, Kang adds. "The key advantage of using Web services is that they use the Internet, and standards have been established. This is the first time in the industry that standards have been established and agreed upon by all the major vendors - Sun, Microsoft, IBM and BEA. It's [the only] solution offering integration, collaboration and interoperability," he says.
So when Income was approached by the Infocomm Development Authority (IDA) of Singapore to be the first poster child for a national Web services project, it jumped at the opportunity. The project would bring together the three Ps - People, Public Sector and Private Sector - to make Web services work in Singapore's context.
Of course, necessity bred action. The time frame for the project is 18 months, says Kang. Coding work started in August 2002, and in less than 12 weeks, the BigTrumpet portal (www.bigtrumpet.com.sg), was born. In October 2002, it was launched with three areas of services: Career, Money and Household.
While the time frame for the project is going to be never-ending, Kang believes that the company's vision is within reach. That's because the Singapore government, through the IDA, has thrown in tremendous support behind the project, as it views it as strategic to Singapore's infocomms industry. The project also had the benefit of high-level support from Microsoft. Microsoft CEO Steve Ballmer flew to Singapore for the launch of the portal on on 15 October 2002, and Kang's team also had the opportunity to work with Microsoft engineers flown in from its Redmond, Washington headquarters. In addition, at Microsoft's invitation, the team flew to Washington for skills training and project discussion. "Microsoft shared with us their direction, thinking and technology. We were given insights and skills that the marketplace would otherwise never have had the chance to gain," reveals Kang.
Income latched on to Web services last May. The BigTrumpet portal is built on a Microsoft platform running on HP Intel servers. Standards used include WSDL (via Visual Studio.Net) but precludes UDDI for now, although there are plans to use the web services discovery standard in subsequent phases of the project. Kang did not even consider going back to the traditional route of using hyperlinks for his portal. Instead Income chose a Web services framework from National Computer Systems Pte Ltd. The framework comprises a suite of common services that allows rapid deployment and development of Web services.
Using Web services, Kang expects that his portal will be built in a more cost-effective manner. "It is a question of 'deploy once, share many.' I can see internal productivity increasing in the long term, as the technology is very structured, and components can be reused, saving us development time and effort. Once we start to build our services they can be shared across the world. But in the short term, however, it is going to be a huge learning curve for my IT team. We are investing in training them in component reusability and making Web services a discipline. The building of infrastructure will take time but in the second and third year productivity will be ramped up."
With Web services, Kang says, he is confident that Income will be able to take the big leap to the next phase of providing richer solutions, something EDI or pure hyperlink technology can't do. "Many websites have so many hyperlinks, but the volumes aren't there. In contrast, Web services allows users to have a single interface and complete transactions that they would otherwise have to enter five or ten sites to do, and where they would need to relearn how each is organised. With Web services, data integrity is also assured as data is not duplicated everywhere when a change needs to be made, because Web services can grab data whatever its form." Ideally this means customers will have a better, more user-friendly experience. "The complexities are all hidden to the user - that's the beauty of it."
Kang says he sees no drawbacks to his early experimentation with Web services and plans to expand its use on his firm's systems. This includes, besides collaboration with complementary service providers, providing trusted services. More services will be rolled out by May.
The challenge with being an early user is that merchants and government partners do not have tools in place to support Web services. To do so they must implement the same technologies so that systems can speak to one another. "Together with the IDA, we are educating private and government sector organisations to address their perceived concerns about Web services, which include security, cost, standards maturity and confidentiality of data shared." Governments, he believe, are a crucial link in the Web services chain. "People want end-to-end services, which invariably involve government services. For instance in buying car insurance, customers have to ensure their road taxes are paid. If citizens want to travel, besides buying tickets and insurance, they have to ensure their passports are valid, so government collaboration is key."
So far, the team has sold Web services collaboration successfully to Singapore's Ministry of Manpower and the People's Association, and is currently working to bring several more government agencies aboard the next phase. For the Manpower Ministry, which came on board with job openings on the portal, a concurrent Web services implementation took place. The security used in the communication with the Manpower Ministry is Secure Socket Layer (SSL) certificate, so the communication channel is encrypted. Kang foresees having to add additional layers of security with more fanciful applications.
A Web Services Revolution
For 30 years, integration has been an issue at the Australian Bureau of Statistics (ABS), says its CTO Bryan Fitzpatrick. Since the 90s, it has had an architecture built around Lotus Notes. Over the years, this national statistical agency, which produces 200 to 300 collections of surveys published monthly, quarterly or annually, has been building systems to organise this data to allow its statistical consultants to access data across collections.
But these stop-gap measures were neither productive nor cost-effective in the long term, says Fitzpatrick. "We have made many changes using Notes and building workflow and collaboration applications, but we concluded that we should build component interfaces on pieces of infrastructure in our systems because we weren't getting enough reused. In some of the processing and dissemination systems, statistical clerks were still the glue that integrated these systems."
Enter Web services. The ABS plans to use Web services in two areas: presenting statistics to consumers of its data, and in internal CRM. On using Web services to present statistics externally, Fitzpatrick explains that currently, the ABS presents statistics - be they national accounts, unemployment figures or retail sales data - to external parties on its website and in its publications in the form of tables, or multidimensional data cubes. The data is needed by organisations for planning purposes, such as by the Australian Treasury in running economic models of the Australian economy, or by McDonald's, which would look at the age and income distribution of people in that area before opening a restaurant there. "What is currently given to these organisations is a big data cube or collection of tables that they have to run through to find the numbers they want. And they then type those numbers into their models. With Web services, however, they can hook up their spreadsheet to the particular number they are interested in, from our website. They no longer have to hunt through ABS tables for the desired numbers, nor update their figures every time a new publication is published." Demonstration services are expected in May.
Web services will also be used in internal customer relationship management. ABS staff currently have to call survey participants who have answered questions about activity over a period of time - say employment over a three-month period, or something that happens on the second Thursday of the month - to query why some numbers appear odd. After having received their explanation, however, another staff would sometimes call the same customer a week later to ask the same question, thereby annoying them. All due to the lack of internal integration.
Web services to the rescue. "We completed a proof of concept 12 months ago to integrate a number of surveys using Web services. This will pull data from a variety of application systems, compile it and present it in a fashion that can be shown in an integrated portal to our clerks internally, and even to our data providers when they are on our website," says Fitzpatrick.
These applications may sound simple, but the implications for ABS are enormous. "Without Web services, we wouldn't have been able to do them," says Fitzpatrick. "Web services work very well because we could hook them into different technologies easily. We found we could interact with Web services from Notes 5 and with Visual Studio.Net from Microsoft, although we will not write all our business logic in that language."
In considering other integration technologies, Fitzpatrick's team rejected COM (Component Object Model), CORBA (Common Object Request Broker Architecture) and EJB (Enterprise JavaBeans). "We had systems in Unix that we couldn't get to COM from readily, and there were several phases of CORBA that were not integrated and there wasn't one fibre that worked with all the key bits of vendor products that we used. We also looked at EJB and while it didn't have the same problems, we were sure it wouldn't go well in the Microsoft world. It also proved very complex to build, and we have a large number of applications that we were hoping to simplify," Fitzpatrick explains.
Web services, however, crossed the religions of components. "Its advantage is that all the significant vendors are rushing to provide support for it. If we use other products, we would have to buy a framework from one vendor and build all our systems on the same framework because they would work [best] with that middleware. In our organisation it is not practical to have one environment to build everything in as we have 100 systems and might only work on 10 to 20 in any given year.
"Another attraction is the use of XML. Every vendor was providing good support for it. This means we stop needing to do the plumbing, i.e., writing the codes that link everything together, because we expect all our vendors to be able to cope with it," he says. This is the main source of savings from Web services, he adds.
ABS started working on its Web services approach two years ago as part of a reengineering exercise, the Business Survey Innovation Programme, for its 50-plus surveys, which aims to reap savings of A$10-12 million (US$6.14-7.37 million) a year.
ABS is developing its applications in house, as it is under legislative requirements to protect the security of its data. Its platforms for Web services include Lotus Notes, Microsoft Windows desktops and Oracle databases that run on Unix boxes. It uses Web services standards SOAP and WSDL but not UDDI. "UDDI is not yet a W3C recommendation. Internally we don't need UDDI although we'll need some sort of directory process. Externally, I expect we will register our services in a variety of directories; they might be public UDDI registries run by Microsoft, registries run by the Australian government, or links in the statistical community."
A Web Services Connection
As a new kid on the U.S. telco block, Virgin Mobile USA, LLC, which operates on a 100-percent pre-paid business model, set out to position itself as providing the most competitive pre-paid rates compared to post-paid products, but without the hassles associated with the latter, such as hidden charges, taxes, contracts or credit checks. The partnership between Sprint and the Virgin Group promised its customers easy-to-activate service and high levels of customer self-service and care. As it targets the youth market, it hopes to lure its trendy audience with innovative services including message-oriented applications, Virgin Xtras such SMS games and music content, and relationships with business partners like MTV. "All this meant that our IT infrastructure has to be 'now' and operate in real-time, transaction-focused mode," says Mike Parks, Virgin Mobile USA's CIO, who was tasked with developing all internal and external interfaces for Virgin's business infrastructure within seven months.
With that ambition, Virgin Mobile USA used Web services in its infrastructure to help them make their value proposition come to life. And this infrastructure, which had to provide both telco reliability and customer and back-office systems that deliver a "100 percent Virgin experience" went "live" when Virgin Mobile USA was launched in the U.S. in June 2002. It was built around commercially available applications from Siebel Systems Inc., BEA Systems, Inc., Unimobile, Telcordia Technologies Inc.'s ISCP and J.D. Edwards, by an inhouse team of 90 staff. Virgin Mobile exposed its environment through SS7 protocols to use the Sprint network and through Web services to facilitate internal and external control. Nineteen HTML, XML and SOAP interfaces, including point-of-sale, order management, product fulfilment and service provisioning were developed. Parks' team also needed to engineer seven additional interfaces to legacy systems using proprietary technologies for network provisioning, call accounting and back-office. Its Web services platform is BEA WebLogic 6.1, BEA WebLogic Portal 4.0, BEA WebLogic Integration 2.1 and XML Schema, using standards including WSDL, UDDI, SOAP and SOAP RPC (Remote Procedure Call).
Parks explains why he did not build his Web services infrastructure on the .Net platform. "We had to provide telco levels of reliability and scalability, and when you put that on the table, you find yourself using a more Java, Unix environment than a Microsoft, .Net one. But Microsoft has evolved the .Net strategy to where it's more palatable. Where it makes sense, we are happy to use it."
Virgin's Web services architecture also overcame many issues facing its business model, one of which was the need to work with multiple distribution channels, content providers and customer contact points. "We needed a technology that vendors and partners could learn and implement real-time transactions quickly. Because several external vendors lacked experience in developing real time interfaces, the Web services framework is relatively easy to teach and co-develop in," says Parks.
Currently, Virgin Mobile USA has over 30 external interfaces to partners, ranging from content providers and distributors to integrators. They include businesses that provide credit card validation services, ringtones, or account top-up up via IVR (Interactive Voice Response), the Web, or phone. It now has two content providers. "These sit outside our infrastructure. Transactions have to happen in real-time, and Web services abstracts interface solutions from connectivity specifics. By utilising Web services over VPN connections, we reduce on-going communication costs," Parks adds.
Most of Parks' internal systems have proprietary interfaces - for instance CORBA interfaces to the ISCP and to Sprint for activation, and connectors that talk to Siebel - but he plans to Web service-enable more of his infrastructure components. "When we move Siebel from Siebel 2000 to Siebel 7, we can migrate it to a Web service. For iterations, we just use XML to communicate between BEA and Siebel, so hopefully we will move more and more to Web services not only externally but internally," he says.
As his Web services are highly exposed, Parks utilises SSL 128-768 bit encryption, secure VPN connections, private line connections, and extensive firewall rules and policies. Other security mechanisms used are proprietary application header credential verification and VML (Vector Markup Language) digital signatures. Under review for possible implementation in the future are XML encryption and XML Access Control Language. Security is also a discipline in communication between developers, network architects and operation teams.
Virgin Mobile USA has reaped enormous benefits from implementing Web services, says Parks. "It has been enabling and flexible, and saved us implementation time and money, allowing us to enhance, expand and create new relationships. Early adopters of Web services realise benefits - ease of use, code reuse and industrial strength - that outweigh waiting for finalised standards."
Could Web services have prevented Virgin Mobile's Asian debacle? Web services, which helped Virgin Mobile USA to garner 350,000 subscribers in just six months into its launch, could have prevented its Asian debacle. Virgin Mobile USA CIO Mike Parks explains that it wasn't only Singapore's highly penetrated pre-paid, youth cellphone market that caused its withdrawal in Oct 2002 with just 30,000 subcribers, but architecture too. He explains: "We now have a horizontally integrated architecture with Siebel and a couple of products that are associated with the telecom business, e.g. the Telcodia ISCP that manages phone calls, and messaging gateway that interfaces with Sprint [black box above]. In Singapore this box is drawn [in blue], so Virgin Mobile [Singapore] did not have the ability to offer a complete customer service. They were very much focused on service, i.e., the CRM piece. It was hard to penetrate the market, not only because it was already so highly penetrated but because so much of what they were doing was in the SingTel world. They had a hard time creating a separate identity and differentiating themselves."