Web Services Business Models

Web Services Business Models


To explore the infrastructure though which Web service providers deliver their services.

To discuss service-level agreements (SLAs) and how they help ensure the quality of Web services.

To introduce payment mechanisms for Web services, and to discuss available bil1ing solutions.

To examine service-to-consumer (S2C), service-to business (S2B) and service-to-employee (S2E) Web services, and to provide examples of each.

To examine Web services registries, brokerages and networks, and to provide examples of each.


It is an immutable law in business that words are words, explanations are explanations, promises are promises-but only performance is reality. Harold S. Green

To be of true service I must know two things: his need, my capacity. Nikita Nikolayevich Panin

Introduction

For Web services to reach their potential in the business world, companies must establish plans how services are marketed, distributed, paid for and

managed

Going to introduce frameworks for providing business-grade Web services including who the key players are how they interact to facilitate Web services transactions Two important aspects of these models

service-level agreements payment mechanisms

Frameworks for Delivering Web Services Web services technologies can create new

business opportunities For software vendors, Web services

represent a new method of distributing their products

develop software applications in house to fill corporate needs, such as supply-chain management, human-resources admin istration or inventory control

Frameworks for Delivering Web Services Enhance their business models and increase

revenue by packaging their business processes as Web services, then marketing the services to other companies that require similar functionality

Need new business and possible frameworks though which businesses can create, distribute, sell and use Web services

Service-Oriented Architecture

Created by IBM A generic model describing service

collaboration Comprises relationships among three entities:

a Web service provider, a Web service requester a Web service broker



Service provider A server or system that makes a Web service

available over a network, such as the Internet. Achieves this through a service interface

a software component that enables other applications to access the service

Publishes the service to a service broker after creating a service interface


Service broker A networked server or system that maintains a directory or

clearinghouse for Web services Act as liaisons between service providers and service

requesters communicate with service requesters and direct them to

appropriate service providers E.g.,

the operators of the public UDDI Business Registry (UBR) offering information about service providers and their available

Web services. Web services brokerages and portals

aggregate Web services targeted to a specific industry


Service requester A networked server or system that accesses

and employs a Web service Interacts with a service broker to find a Web

service that fills a specific computing need


E.g., companies that aggregate content communicate with a variety of data sources to amass information and present it to customers.

yahoo.com or msn.com rely heavily on combining information from multiple sources

•Although the provider, requester and broker technically are computing systems, we use the terms more generally to refer to the individuals or businesses that manage those systems.


Service aggregation a newer concept referring to businesses that

combine electronic services to provide a single, more comprehensive service to customers

E.g., a company offers a composite service for automobile owners combining features such as on-demand directions, roadside assistance, online concierge and stolen vehicle tracking

Service Provider

A service provider can be any organization that creates or hosts software and wants to make that software available over a network. For example, Application service providers (ASPs)

ASPs already possess infrastructure Independent software vendors (ISVs)

Company that specialize in the development and sale of software

Not directly associated with a specific platform might become Web service providers

Companies create Web services available only within their organizations or to trusted business partners

Service Provider

Not necessarily the creator of the services May employ a third party to host and maintain the

services the hosting entity is the Web service provider

it manages the computing system on which the service resides

The creator of the service is called the asset owner If a company both develops and hosts a Web service,

that company is both the service provider and the asset owner

Stages of Web Service Development and Deployment

Discuss the tasks that comprise the Web service development process, from generating an idea for a service to actually deploying and selling that service

Web Service Business Lifecycle

Four stages: creation, publication, promotion and sale

Creation

Creation includes the initial construction of the Web service the steps required to prove that the service

operates correctly

Designer Developer assemble documentation

test

Creation Stage

Creation

Creation Testing Organizations that develop Web services can

test them in house. However, an independent third party that

specializes in the assessment of Web services functionality and interoperability should administer the tests and provide a form of certification

No standard testing procedures now Should be crucial to Web services development

Creation

The final step Creation process is handled by a distributor Can be either the same as or separate from the

service's owners Package all the code and documentation relating to the

Web service in a format that can be understood and used by other applications

Make decisions regarding the publication of the Web service

Exposing all necessary pieces of a Web service on a network

Can outsource these tasks ASPs, ISPs, and Web-hosting companies are the

most obvious choices to host Web services

Promotion

Third parties must enable service requesters to locate the service

Carried out by brokers public UDDI registries

the UDDI Business Registry (UBR) private registries

promote Web services available within an organization or among partners

www.xmethods.net and www.salcentral.com have created their own Web services directories

Sale of Services

Two main anticipants a company or organization that manages Web

services accounts can be the entity that hosts the service or a

separate organization that specializes in billing Web service auditor

an individual or organization responsible for reviewing the functionality of Web services

service provider might ask an auditor to reevaluate the service on a regular basis

Service-Level Agreements (SLAs)

Legal contracts in which a service provider outlines the level of service it guarantees for a specific Web service

SLAs cover a specific time period, after which the agreements must be renegotiated

When customers purchase Web service subscriptions, their subscriptions guarantee service according the contents of the SLA

Service-Level Agreements

Most SLAs define relationships between Web service providers and requesters Delineate the requester's needs goals with regard to the service the capabilities of the provider to meet those requireme

nts

In SLAs between developers and providers the developer specifies the capabilities of the service the provider outlines the level of service it will provide t

o the service's requesters

Service-Level Agreements

An important function of SLAs is to address quality of service (QoS), which refers to the level of service that a particular Web service provides

QoS is defined by factors such as the probability that a service can respond to a

request at a given time, how well a service executes its tasks, how quickly a service works how reliable and secure it is Etc.

SLAs stipulate QoS requirements

Availability Describes the probability that a Web

service is ready for use (i.e., available) Measured as a percentage E.g., a Web service might be available to

service requesters 99.99 percent of the time.


Accessibility Describes the group of users that can

access a service, as well as how difficult it is to access the service

For example, a Web service that supports multiple languages (such as Spanish, Japanese, etc.) would more accessible than a Web service that supports only English


Integrity Describes the probability with which a servi

ce performs its tasks in the exact manner described in the service's WSDL document or service-Ievel agreement (SLA)


Performance comprised of two main factors: throughput

and latency Throughput

Represents the number of requests that a Web service processes in a given time period

latency Represents the length of time that the service

takes to respond to each request


Reliability Describes the ability of a Web service to

function correctly and provide consistent service, even in the event of a system or network failure

Also encompasses procedures for data backup and redundancy


Conformance to standards Describes whether a Web service employs

the specific standards and implementations Service providers must adhere to standard

s agreed upon in SLAs otherwise, requesters might not be able to acce

ss the services


Security involves technologies and processes such as

authentication, message encryption and digital signatures

An SLA defines the amount of security that a particular Web service requires, and the service provider then must maintain that level of security

Importance of SLAs

SLAs are crucial to the success of the Web services industry Web service customers must be able to trust t

hat services will adhere to certain quality-of-service requirements

Help ensure the reliability of a Web service Include information regarding liability

If a deficiency in service impacts the requester's business, the provider is legally responsible to compensate the requester.

Importance of SLAs

However, even with SLAs in place, quality of service is not guaranteed. Service providers still might not honor their co

ntracts providers know that the cost of litigation often is f

ar greater than the cost of switching to another provider

Web Services Payment Models

Web Services Payment Models

Free Charge

Most publicly available Web services are free It is important that service providers supply free

services to publicize Web services and to encourage users to experiment with the technology

Designed to provide an immediate benefit while requiring little commitment on the part of the requester E.g. supply news-headline services and calendar

services for free Some offer free services in exchange for

displaying the provider's brand or logo

Free Charge

Service providers hope that, after successfully using free services, requesters will return and subscribe to more complex, fee-based services

Free services can be appealing, fee-based services usually are more reliable Free services are not governed by SLAs or oth

er QoS assurances

Pay-per-use Model

Involves the smallest commitment from customers Most pay-per-use services require that requesters

purchase a set number of service invocations Requestors prepay for a certain volume of service, Then can decide whether to renew once they exhaust

their prepaid limits If no minimum to the amount of service that customers can

buy, The small usage fees might not justify the cost of billing

Include a mechanism counts and records the number of times each requester

uses the service

Pay-per-use Model

Charge on a sliding scale requesters who buy more service invocations incur a

smaller cost per unit

Requesters use the service before paying Model billed according to the number of times they invoke the

service Such models are riskier for providers

cannot be sure that customers will pay

Flat-fee subscription Model

Service requesters pay a fee for unlimited use of a Web service during a specific time period

Most experts believe that, flat-fee subscription will become the most common way to charge for Web services

The providers can better predict their incomes Can place service providers at a disadvantage if

providers underestimate the amount of service that requesters will use

One-time charge Model

Requesters pay a single fee in exchange for unlimited access to the service for the entire lifetime of the service

For most services, this billing model is impractical However, one-time payment is an ideal charging

mechanism for perishable services, or services that exist for a finite period of time E.g. specific Olympic games, World Series or

presidential campaign

Business of Publishing Web Services

Three main categories Models that support service-to-consumer

(S2C) Web services Models that support service-to-business (S2B)

Web services Models that support service-to-employee

(S2E) Web services

Service-to-Consumer (S2C) Web Services Web services intended for consumption by

individuals, rather than businesses Brokerages list S2C services that provide general

information E.g., news headlines, sports scores or stock quotes.

Web services can simplify the process of communicating content or requested data to users

Many S2C are free and offer only trivial functionality most service creators do not have defined business

models or immediate plans for profitability

Service-to-Consumer (S2C) Web Services Some companies are including Web services as part

of larger offerings, such as travel services or customer-relationship management “Expedia, Inc" maintains an online travel agency (www.

expedia.com) Free services

E.g., Book air travel, car rentals and hotel accommodations Access updated travel information, such as flight status Enable travelers to integrate the latest travel information int

o their personal calendar applications Differentiate itself from competitors in the online travel

industry

Microsoft's .NET Microsoft's .NET My Services

A set of S2C Web services that stores users' personal information

Username and , password pairs, appointment schedules, travel information and credit-card data

Microsoft's .NET Passport Single Sign-on service (SSO)

stores users' authentication information and enables automatic sign-on at participating Web sites

Each Passport account encompasses four components a Passport Unique Identifier (PUID). a user profile, credential information an optional wallet feature called Express Purchase

Microsoft's .NET Assigns a PUID to each, enabling Passport to distingu

ish among users A user profile is associated with each Passport accou

nt Credential information consists of an email address or

phone number A password containing a minimum of six characters Passport user also selects a four digit security key

A large number of business allow visitors to log into their Web sites via the Passport authentication system

eBay, McAfee.com, Monster.com, Office Depot Critics have raised significant concerns regarding secu

rity and privacy

Service-to-Business (S2B) Web Services Recognizing the advantages of interacting via Web

services, many companies are developing S2B Web services communicate with one another and share data,

regardless of platform simplify existing transaction processes enable the formation of new, more streamlined

relationships among organizations link their databases and applications companies share updated data Etc.

Service-to-Business (S2B) Web Services Currently, most businesses allow only trusted partner

s to access their S2B Web services address a wide range of business communications nee

ds E.g., Dollar Rent A Car Systems (www.dollar.com) dev

eloped a Web service linking its reservation system directly to Southwest Airlines Company's Web site (www.southwest.com)

Purchase plane tickets and rental-car reservations from the same Web page

Communicate with their client businesses

Service-to-Employee (S2E) Web Services Web services specifically designed for use by

employees The services can take many forms

Some S2E Web services help companies deliver information to employees, whereas others simplify interactions among employees

Enable employees with appropriate access rights to use corporate applications and modify files over the Web

Hewitt Associate LLC

A consulting and outsourcing firm that provides human-resources and employee-benefits services to businesses

With more than 250 client companies Manages retirement. plans, healthcare benefits and o

ther services for over 15 millIon employees worldwide

Want to offer employees convenient access to their personal retirement and benefits information retrieve data or change options through customer-servi

ce representatives

Hewitt Associate LLC Hewitt's client companies requested that the firm provide more

direct access to benefit data Wanted the ability to retrieve information regarding 40lk

accounts and health-care policies from their companies' corporate portals, without going through Hewitt's site

Could achieve this by creating custom connections between its computing system and those of its clients The costs and development time involved seemed unreasonable

Instead, using Web services technologies build a platform-independent system all its corporate clients can integrate into corporate portals or

other applications Use IBM's development tools

Hewitt Associate LLC

The portal translates a request to XML Send it in a SOAP envelope over the Internet

Using IBM WebSphere application server unwraps the SOAP envelope and passes the request to Hewitt’s mainframe Translates the request from returns an XML and proce

sses it

The mainframe returns an XML response to the application server (in SOAP envelope )

Transmits it back to the client application

UDDI Registries

UDDI registries are the most commonly known method of discovering Web services provides information about and access to

publicly available Web services conceptually similar to a that of a phone book

companies can search registries by business entity, business service and other categories

Web Services Brokerages

Web sites that list available Web services E.g. www.XMethods.com Can discover Web services

Some also supply value-added services include advanced search capability Service monitoring Service supports

Web Services Networks

Most enterprises that use Web services require more comprehensive, end-to-end support for Web services transactions

Web services networks can provide additional service support Companies that oversee Web services communications by

offering authentication. security, routing. etc. Similar to the package delivery services provided by UPS and

FedEx when two businesses need to exchange products, they employ a

package delivery service to route the package the delivery service guarantees that the package reaches the

appropriate recipient It arrives by a certain time it remains undamaged


Organizations will not be comfortable conducting important business via Web services unless the participants can ensure that messages arrive securely, on time and intact

Web Services Networks act as intermediaries between

enterprise Exchange Web services As such the networks provide a variety of services that

address QoS, network reliability, security, metering and billing

If a Web service message must pass through multiple parties, the network can ensure that the message is routed correctly


Web Services Business Models

Documents

web service providers

web service available

web service requester

available web services

web services brokerages

web services act

web services transactions

web services registries