Clash of the titans

First it was the battle for the desktop. Then came the browser wars. Now the software industry is fighting over a new prize: dominance in Web services - products that help corporations migrate their operations to the Internet.

Companies spend billions each year on integration, struggling to make software from different vendors work together. The biggest names - Hewlett-Packard Co., IBM Corp., Microsoft Corp., Oracle Corp. and Sun Microsystems Inc. - are competing to solve that problem and win a piece of a market that is expected to grow to US$14.5 billion in the next two years.

Web services' roots stretch back to the early '90s and Sun's "the network is the computer" campaign. What's new is that the tech giants have focused on creating the software that third-party developers will use to build "component" programs that snap together into larger systems. The rewards for winning over the third-party programmers are lucrative: increased sales of operating systems, database software, consulting services and computers - especially the big servers that store and run programs within a network. The winner will be to the next generation of business software what Microsoft is to the desktop and the browser.

Right now, adding a feature as seemingly simple as an online shopping cart to a Web site can be a date with frustration. That will change with Web services. The modular approach will make it easier to add, say, online billing services or to install an automated inventory-scanning system to determine whether a product is available for shipping. Carly Fiorina, chief executive officer (CEO) of Hewlett-Packard, recently referred to the new software services as a move "from a do-it-yourself model to a do-it-for-me model."

Standards-based Web services first caught the industry's imagination last June when Microsoft unveiled its .Net strategy. In December, Oracle laid out plans for so-called Dynamic Services, and last month Sun and HP introduced Sun One and the Netaction software suite, respectively. Big Blue, too, has been making more noise lately, although it hasn't given its program a catchy moniker. "We're less interested in putting a name on it," says Robert Sutor, an e-business director at IBM.

The contender with the most to lose is Microsoft, which faces the uneasy shift from selling shrink-wrapped products to making Net-based software. "Everyone pointed to Microsoft as being late to the Internet age," says Barry Goffe, a Microsoft software group manager. Now, "we definitely have bet our company on Web services."

Sun, Oracle and IBM are placing big bets as well. Sun has tied its Sun One initiative to its core line of servers to appeal to companies that already run them. Similarly, Oracle is linking Dynamic Services to its market-leading database. "We're developing a second brand," CEO Larry Ellison said at a recent press gathering. And IBM is lacing a Web services framework into the popular WebSphere software that runs across its broad array of hardware.

The Web services push is widening the gulf between Java, Sun's program-building language, and Microsoft's .Net. On one side are Sun, IBM and Oracle, which use Java to develop their Web-services tools. On the other is Microsoft, which in January settled a long-running legal dispute over its tailoring of Java. Microsoft is also plugging its programming language C# (pronounced "C-sharp"), introduced last year.

While Microsoft's dominance on the desktop gives .Net a boost, betting against Java may be a big mistake given the powerful companies that have embraced it. Windows has 92 percent of the PC operating system market, providing Microsoft with a channel to spread C#. But it still has to convince developers to sign on to Visual Studio.Net, a dramatic rewrite of Microsoft's old development software that requires learning C#. Also, C# is a proprietary technology, so programs built with it won't run on the Unix servers many corporations use.

But while some Microsoft developers are "kicking and screaming" about the changes to Visual Studio.Net, Microsoft's Goffe argues that some competitors are failing to deeply integrate the Web standards - which will allow various software products to communicate - with their own products. Java-based developers, Goffe charges, are attaching the standards almost as if they are afterthoughts and hurting the effectiveness of the new software.

"The industry is filled with zealots with religious drives," says Hewlett-Packard VP William Russell, who hopes to capitalize on the rift. HP wants to make a business out of bridging the two languages with an integrated product line that includes both Java-friendly Unix and Windows servers, Russell adds. "It isn't our way or the highway."

While there is plenty of disagreement among the combatants over the best approach to developing Web services, they do share confidence in its potential to transform the way companies do business. Defining the full reach of Web services may prove to be the software industry's most significant accomplishment in a decade. But then, the players seem to know this: Look who's entered the arena.

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