Forever free services?

WEB SERVICES, so the story goes, typify the best aspects of modern business software. Their foundation technologies, including XML, SOAP, and WSDL, were hewn by the sharpest minds in the IT industry and made free for the benefit of all. But as vendors turn Web services into products, skeptics fear that the technology’s openness may be bait. Standards could be subverted into springboards for patents, proprietary adaptations may hamper interoperability, and open-source implementations could be subjected to licenses.

Tom: Every business based on that late ’90s free-love shared hallucination of “zero-revenue success” has failed. So instead of competing on the basis of magnanimity, as they did two years ago, surviving vendors are using Web services to drive sales of commercial application servers, client applications, and tools. These efforts are paying off, if the Web Services Applications Survey is any indication. Microsoft, IBM, Sun, and Oracle are moving frameworks, toolsets, and servers to the greatest number of customers. Borland and Macromedia can credit Web services for putting them back on enterprise IT’s radar.

Enterprise computing founders such as Digital Equipment, Intel, and IBM spent fortunes on R&D to create what everyone now takes for granted. They recovered those costs through fees and licenses, the application of which did not slow the acceptance of what they created. You simply can’t expect commercial-grade technology to develop without a price tag attached.

P.J.: Om shanti, spare love for a hippie, Tom. I’ve been screaming for years that the zero-revenue model is an MBA’s version of a Ponzi scheme. There’s nothing wrong with making money from the sweat of your brow. I simply object to seeing the standards process abused by vendors trying to lock users into proprietary solutions. Besides, you’re forgetting how much of the foundation work for the Internet was done in the nonprofit sector. Large chunks of Sun’s Solaris, in particular, and a lot of other TCP/IP implementations, including Microsoft’s, still bear the copyright of the Regents of the University of California for a reason.

Web services are what we’ve been trying to do all along, but now we have better tools than what a simple HTML editor and some CGI scripts can provide. The maturing of Web services presents an enormous opportunity for those who still have some chips left after the burst of the dot-com bubble. But the work isn’t done: 22 percent of survey respondents whose companies have deployed Web services claim they haven’t yet seen the promised benefits, and another 31 percent assert that visible payback took longer to become evident than they expected.

Tom: When Web services started out of the gate, the U.S. tech economy was booming. Vendors were convinced that the positive PR generated by free goodies would boost sales in other areas. That didn’t happen, so now they’re rifling through their assets and determining how much the market will pay for them. That portfolio analysis will undoubtedly raise the long-term price of Web services. The returns are apparently worth it: 52 percent of respondents expect to reap the benefits of Web services within the next year.

Web services, like the Web itself, are gaining traction because they’re built from brilliant ideas that make it easier to do business. The minds that hatch such ideas don’t come cheap. If the ubergeeks’ employers can’t profit from their inventions, what will motivate vendors to fund the research that evolves into standards? Unless you propose to move all of these brainy people to a bread-and-water commune, IT will have to pay for those deep thoughts.

P.J.: Speaking of brilliant ideas, almost a century ago, King Gillette had one: Give away the handles, but sell the blades. In other words, give away the standards, but build ever-improving products that use those standards. That isn’t anti-capitalist, that’s just good business sense.

It’s smart for vendors to put their efforts behind developing standards for Web services. Also, it’s a good idea for standards bodies to resist the temptation to adopt proposals that could become the subject of future holdups through transfers of patent ownership. Forgent’s claim to own the rights to the JPEG specification is just the kind of problem that IT doesn’t need to relive every few years. If a vendor wishes to have a patented technology adopted as a standard, it must be prepared to assign its rights to the standards body for the lifetime of the patent.

Tom: I don’t think you’re a radical, P.J., just a romantic; but your something-for-nothing gravy train has jumped the tracks. Web services are already thriving as a commercial enterprise. Even though Web services can be done for free on Linux, only 3 percent of survey respondents plan to deploy Linux as a server platform.

It’s natural for vendors to explore all possible ways to extract revenue from their inventions. Patents and licenses generate income that companies would be foolish to disregard. When vendors act reasonably in that pursuit, as major Web services players have so far, the market rewards them. If they get greedy and cross the line, the market smacks them down. As far as I can tell, everything’s working the way it’s supposed to.

P.J.: Here’s the tough part: Exactly what is the difference between reasonable returns and shameless greed? Sure, we all know it when we see it, but sometimes, market discipline doesn’t kick in until it’s too late. Guarding intellectual property too closely is as bad as not guarding it at all. I don’t expect something for nothing, but I do expect my bartender to buy me a drink by the fifth round. That’s not a bad analogy, considering the tabs IT departments have run in recent years.