Web services is this emerging area, where software moves into the Internet cloud. Writes Ludwig Siegele in The Economist:
In this new world, a payroll service, for instance, would be a combination of several other web services. A company would outsource its human-resources system to one provider, while another would keep track of the hours employees work. The payroll firm would also be hooked up to a service that delivers information about regulatory changes and, if the money has to be transferred abroad, with a bank offering foreign-exchange services.
The network thus becomes one huge distributed computer, just as Sun Microsystems, the leading maker of network servers, has been predicting for decades. And just like a mainframe or a PC, this mother of all machines needs an operating system, a platform on which all these services can be developed.
This is where the battle of tomorrow is being waged. Sun, Microsoft, IBM, HP and Oracle have their own visions of what the platform should be, from .Net to Java to e-Speak. One thing, though, all agree on is that the binding glue will be XML, an extension of HTML, which not only carries the document, but also information about the various fields within the document, making it easy for information to be exchanged and machines to interpret it.
Two other interesting developments in the software world which are enabling this move towards web services are peer-to-peer (P2P) computing and open-source. P2P enables the distribution of data and intelligence across computers connected on the network.
What is making this possible is the availability of high-speed and reliable bandwidth. So, instead of intelligence being at the core (on the server), it is spread across the nodes. New tools and applications are needed to extract and leverage these resources. Open-source is software which is the public domain, and thus, whose source code is available to all to use or modify. Linux is perhaps the best example of open-source software. As software becomes complex and mission critical, open-source and collaborative development may be the best way forward.
This new world does not come without its challenges. Connectivity to the Internet remains a big challenge in most parts of the world. Security and Confidentiality of data, and Trust are other issues which need to be resolved from the user’s point of view. In addition, using the standardized, “one-size-fits-all” software may entail changes in business processes, which may be harder to do than customising the software (which defeats the utility model).
Thus, the initial adopters of the Software Utilities may actually be companies in countries who have long been ignored by the software companies, because they either could not pay or were too hard to reach. They have little legacy, are hungry to grow, cannot make large up-front investments, ad would dearly love to leapfrog to the latest technologies.