Posted on 4-2-2003

Sharing Gaining Strength Online
by Steve Lohr, NYT, 3 Feb03

The software competition in Web services will be fierce, but it promises to
be a different kind of rivalry than in the past. For decades, technology
companies have competed by persuading customers to buy their homegrown
products. The goal was to "lock in" customers of a company's proprietary
software and hardware so that switching to another supplier and starting
over would be extremely costly and arduous.

Web services should make the lock-in strategy harder to pursue because the
standards allow data to be easily shared rather than locked inside
proprietary software. One sign of the changed terms of trade was the
creation last year of the Web Services Interoperability Organization to
ensure industry cooperation in smooth data sharing. The group was founded
by the two companies that most analysts say will be the leading competitors
in the Web services field: Microsoft and I.B.M. They were joined by BEA
Systems, among others, and later Sun. "Web services is a heterogeneous
technology that connects your new stuff and your old stuff together,"
observed John Swainson, general manager for I.B.M.'s Web services software.
"So our cooperation with Microsoft is in some sense a deal with the devil
for both of us. We're letting them into our world and they're letting us
into theirs."

The Web services project at Allstate Insurance is an example. At its big
data center outside Chicago, Allstate has I.B.M. mainframes, Sun machines,
PC servers running Windows and other systems. Its databases include
I.B.M.'s DB2, Oracle and Microsoft's SQL. To allow information to flow
smoothly among its computer systems, Allstate is using Microsoft .Net
software tools and its Windows server software. But to share data with its
big systems, it is using WebSphere, I.B.M.'s Web services middleware
software. The Microsoft and I.B.M. software have to talk to each other.
"Web services gets you out of the world of proprietary messaging software,"
said Kevin Rice, a technology manager at Allstate.

The software companies competing against Microsoft are offering middleware
software, based on Web services standards like XML and Java, a programming
language created by Sun. They are betting that this will move industry
competition away from the operating system and especially away from Windows.

To be sure, I.B.M., BEA, Sun and others in the non-Microsoft camp all
compete against each other as well. It is still early, and sorting the
winners from the losers will likely take years. Yet most analysts and
industry executives say they believe that over time I.B.M. will emerge as
the leading rival to Microsoft. "The gorillas in this are I.B.M. and
Microsoft," said Thomas M. Siebel, the chief executive of Siebel Systems,
whose customer relationship management software is being fine-tuned to run
on both I.B.M.'s WebSphere and Microsoft's .Net technology.

Microsoft's Web services technology is tailored for Windows. But the .Net
technology is trying to appeal to a wide range of programmers by letting
them write in many different computer languages, including Cobol, C++,
Perl, Smalltalk, Java and C#, which is Microsoft's answer to Java. By
contrast, the middleware of the non-Microsoft camp runs on any operating
system, but it is geared toward Java programmers. "Our goal is to make Web
services easy for software developers, businesses and end users," said Neil
Charney, a director in Microsoft's platform strategy group.

A poll of corporate technology executives by CIO Magazine, released today,
suggests that Microsoft has at least attracted the most attention in the
early going for Web services. When the executives were asked what they
expect to be the leading "Web services platform," 47 percent chose
Microsoft's .Net, while I.B.M.'s WebSphere came in second with 19 percent.
The survey gave no hint of whether the Microsoft vote reflected enthusiasm
for the .Net technology or fatalism that Microsoft, the world's largest
software company, would prevail in this market as well.

Its competitors contend that, in the end, most large corporations will
limit their commitments to .Net, fearful of having their businesses too
beholden to Microsoft. "People are still very leery of Microsoft lock-in,"
said Tod Nielsen, BEA's chief marketing officer, who is a former Microsoft
executive.