(July 21, 2003) - Just a few short years ago, I had my first experience with Web service technology while employed by a Silicon Valley dot-com company. At the time, the new technology seemed to me to be more like a solution looking for a problem. All right, you can use XML for remote procedural calls, but so what? I can specifically remember working on an advanced financial reconciliation engine, where the lead engineers on the team proposed that SOAP be used to interface the engine to the remaining J2EE based services. It seemed to me to be somewhat of an overkill, especially since the interface was fairly static in nature and not very complex. And besides, why would you want to mix SOAP, a Microsoft creation for gosh sakes, with a strictly J2EE-based platform? Mixing the two was considered anathema at the time.

Well, a whole lot has changed since then, with the greatest of these being a complete flip of our economic way of life. In June, I attended an IBM media event in New York where they showcased their suite of integration-based products. Aside from some adapter upgrades and a few product announcements, there really wasn't anything presented that you would find revolutionary in the area of integration, but the keynote, given by Steve Mills, senior vice president of IBM Software Group, put things into perspective and laid out a new vision for an IT industry still shell-shocked from the Internet bust.

Today companies are forced into a "Survival of the fittest" mentality, where business efficiency can be the difference between profitability and bankruptcy. The top-line revenue growth of the late 1990s, where the sky was the limit regarding new business opportunities, has been replaced almost overnight by a bottom-line way of thinking. In other words, it's time to tighten the belt for the next decade or so. Being in the software consulting business, this was not exactly what I wanted to hear.

Furthermore, the corporate CIO today faces the challenge of having to make do with a reduced budget, while at the same time receiving a mandate to make the business operate more efficiently. This means consolidation of existing underutilized systems and making them work together in a way that streamlines business operations. For there are any number of inefficiencies inherent in any business that if reduced can improve profitability. One example would be to eliminate unnecessary labor-intensive operations, such as reentering data into an application from a fax or a printout from another application.

In addition to the presentations from IBM, there were a number of excellent presentations made by IBM customers, providing their success stories using the IBM Integration suite. One common thread among the presentations had to do with making the various "silo" applications within the enterprise work together in a new way, such that various business entities can be managed in a holistic manner across several business processes.

In one example, a major cruise ship corporation decided that in order to be more "guest centric" it needed to integrate a hundred or so applications, using IBM's Integration suite. The ability to better serve the customer in this case will help the bottom line and reduce inefficiencies. In another example, one product-marketing company found that due to unsanctioned entry of UPC data by retail management, a certain percentage of register scans were incorrect and skewing product sale data. When they analyzed the cost of correcting the information, they found that they were spending hundreds of millions of dollars annually reconciling back-end data - most of it due to the labor-intensive process of manually correcting the information. For this company, partially automating the reconciliation process, using portals made possible by Web services, will reduce the amount of resources required, and hence reduce the cost of doing business.

There are a large number of "silo" applications out there, just ripe for integration. And that is where Web service-based technological innovation, coupled with Business Process Management Systems, have a role in making these applications work together as one. In my humble opinion, this will be the major innovation to guide the IT industry, as a whole, through the next decade's "bottom line" way of economic thinking.

Finally, there's a worthy problem