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IDC: Web Services Consumption to Hit Stride
By Clint Boulton

July 14, 2005

Web services software has evolved from a state of creation to more rampant consumption, according to an IDC report, which expects the market to hit about $15 billion by 2009.

Major vendors such as IBM, Microsoft, BEA Systems, Sun Microsystems and others will blaze trails in Web services security, management, messaging and event processing utilities.

Often deployed under the auspices of service oriented architectures (SOA) to integrate different applications, such software tools allow applications to be ferried across networks regardless of their code or the infrastructure they may be deployed on.

This seamless interoperability is imperative for the distributed computing direction the software space is headed toward.

Sandra Rogers, program director for Web services and SOA at IDC, said some $2.3 billion was spent worldwide on Web services software in 2004, more than double the amount from 2003.

Rogers expects that sum to balloon, noting that companies that may have shied away from “bleeding-edge” software niches such as Web services management are now saying “this is a concern of mine.”

“A lot of people depended on manual or existing efforts to deal with lifecycle and management,” Rogers said. “But as they scale out and more entities utilize shared services within a larger enterprise, they realize they need a more automated solution for management and would like to do security and management together.”

For the last few years, the most advanced Web services software didn’t blossom as quickly as some of the vendors hoped because the market was testing the waters regarding where and how to use those services. Security was also a barrier until standards such as Web Services Security were passed.

“Now we’re seeing a lot more brewing around that service management lifecycle type of architecture,” Rogers said, referring to recent undertakings, such as BEA’s AquaLogic suite and Cisco Systems’ new application-oriented networking (AON) venture.

Currently, the market for development and deployment is the largest Web services software category. But Web services applications software will ultimately experience the highest growth through 2009, fueled by the innovations of application suite vendors like SAP and Oracle, which will use Web services to deploy their applications.

She also said further consolidation is likely in the wake of several security-oriented acquisitions. In the past two years, Oracle bought Oblix; Computer Associates snapped up Netegrity; and Actional merged with Westbridge Technologies, all for the purpose of securing Web services.

If purchases aren’t the route that leading vendors choose to go, partnering with others to get what they need could be the ticket, Rogers said. For those who can’t or choose not to build, she expects OEM deals to be inked in the name of marrying business processes with Web services.

New standards adoption and evolving licensing models are also expected to be a big part of the mix. In other trends, nearly two-thirds of the Web services software market is currently concentrated mostly in the United States. IDC expects North America will continue to host the majority of the market through 2009.

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