Oil giant Royal Dutch Shell is doing it. So are financial services company Merrill Lynch and travel technology company Galileo International. Those corporate heavyweights are experimenting with Web services, an emerging approach to application development that promises to save time and money by changing the way companies build and use software. Web services, a major new trend in standards-based software technology, is made up of pieces of custom-developed code that lets two or more Web-based applications talk to each other. Those services can pull a single piece of data (such as a stock quote) or an entire business process (such as checking a customer\u2019s credit and giving him a credit score). Down the road, advocates say, Web services will allow organizations to integrate and reuse software that they or others have already built. Instead of owning and maintaining all their own hardware and software, companies will buy IT systems as services provided over the Internet. The hope is that through the use of Web services, the blood, sweat and tears now involved in systems integration will dissipate, leaving both companies and consumers better able to use and exchange a wide range of capabilities and information over the Internet.Web services can help companies integrate disparate systems for less money than traditional methods. EDI has helped companies exchange data for years, but it lacks flexibility and is costly to maintain. And where an enterprise application integration package can run into the hundreds of thousands of dollars, Web services that can meet comparable business goals can be built for tens of thousands of dollars. Adding to the momentum: Top technology vendors, including BEA Systems, IBM, Microsoft, Oracle and Sun, have agreed to support a set of standard software technologies that spell out how different computer systems should interact with each other?an unusual level of cooperation. In addition to the data exchange standard XML, three new standards?simple object access protocol (SOAP); Web services description language (WSDL); and universal description, discovery and integration (UDDI)?let Web services talk to one another. So far, companies experimenting with Web services have been focusing on XML and SOAP and are still examining uses for UDDI and WSDL, which will allow them to advertise their Web services in online directories.Web services doesn\u2019t come without drawbacks. For the moment, most companies are keeping their Web services projects behind company firewalls because of lingering network security and reliability concerns. Other technology and business questions also remain unanswered: How will organizations make sure that the company delivering a Web service will keep the service up and running reliably? Who will be held accountable if a Web services rollout fails? A public online directory of Web services is months, if not years, away, but IT leaders now need to experiment with Web services technology. Three organizations?Life Time Fitness, the MedBiquitous Consortium and Nordstrom.com?provide clear examples of how to begin a Web services strategy and gauge its potential for your business.Nordstrom.com\n\n\nIf the Web Services Shoe Fits...Retailer links three generations of systems to boost website sales\n \n\nAt Nordstrom.com, a technology need inspired the company\u2019s use of Web services. The online arm of Nordstrom department stores calls itself "the world\u2019s largest shoe store," offering more than 20 million pairs online. Each time a customer orders a shoe, that order is sent to the shoe manufacturer via EDI, XML or e-mail messages. The result: Orders move more quickly and smoothly than if Nordstrom had to keep all the shoes in stock, and customers benefit from a wide selection.\nThe online retailer wants to use Web services technology to communicate more than order and inventory information to its suppliers. Using Web services, Nordstrom.com plans to make forecasts and reports instantly available to its drop-ship vendors so that they can better match inventories to Nordstrom.com\u2019s sales forecasts. In contrast with the more traditional means of integration and data sharing, such as EDI, Web services offers a more flexible or "loosely coupled" way of linking applications. Where EDI allows companies to exchange data, such as purchase orders and invoices in structured formats, Web services lets companies open up their systems and share a wide array of information with far less tailoring. Ideally, customers will have a better experience because the shoes they want will be in stock more often.So necessity bred action. Even though Nordstrom.com doesn\u2019t have an exact time frame for this project?largely because many of its shoe vendors can\u2019t yet support Web services?the company\u2019s vision is within reach, says former CTO Paul Onnen. That\u2019s because Nordstrom.com is already using the technology to link its online operations to mainframe systems at parent company Nordstrom in Seattle and at banking subsidiary Nordstrom Federal Savings Bank in Denver. "Web services are already a part of the way we do business," Onnen says. "We just happen to be a little bit early because we had the need and the technology."Onnen latched on to Web services last spring when he was looking to sell cosmetics on Nordstrom.com. The website is built on a Microsoft platform, but the ERP system that checks inventory and places the order is a Nordstrom.com system running on HP Unix servers. To complicate matters further, all the inventory information is stored on an IBM mainframe at Nordstrom\u2019s Seattle headquarters. The goal here was to get all the systems talking to each other.Onnen considered going the more traditional route, using IBM\u2019s MQSeries middleware to knit the systems together. Instead, Nordstrom.com chose a software platform from Iona Technologies. That allowed developers to build a Web services application that links the disparate systems and provides real-time inventory information across the different platforms. (So a shopper could see if that Lanc\u2122me body cream was available.) Using Web services, Onnen accomplished this for less time and money. With middleware, Onnen says, one application exchanges data with another in a connection that must be custom built. But with Web services, Nordstrom.com can take the customer\u2019s order data and hand it off to numerous other systems. "The key with Web services is that you only have to build it a single time," says Onnen.Most recently, Nordstrom.com used Web services to allow customers to buy gift cards online and by telephone. In this case, Nordstrom.com wanted to connect the website directly to an IBM mainframe at its savings bank to do gift-card balance queries and redemptions. Onnen and his team built a single Web services tool that allows all the parties?Nordstrom.com, the bank, the call center?to query a gift-card balance. So when Ms. Smith wants to redeem her Nordstrom\u2019s gift card, she can either go to a store or cash it in at Nordstrom.com.Onnen says he sees no drawbacks to his company\u2019s early experimentation with Web services and plans to expand its use on the company\u2019s systems. The challenge with being an early user is that some merchandise vendors and business partners may not yet have tools in place to support Web services. In order for Web services to work effectively, he says, those partners must implement the same technologies so that the systems can speak to one another.Onnen stresses that Nordstrom.com hasn\u2019t yet used Web services over a public network, choosing instead to interact with internal units and trusted business partners over a secure network. That\u2019s because sending Web services over the Internet can leave companies vulnerable to both security and network reliability problems.Life Time Fitness A Web Services Warmup\n\n\nApplication to serve customers could end up generating revenue\n \n\nUp until January, when Life Time Fitness\u2019s 300,000 members wanted to make an appointment for a personal trainer, book a racquetball court or schedule a massage, they would have to call their individual club. If their favorite masseuse was booked, they had to call another club. Add all of that up and you get lots of hours wasted by members and employees alike.\nEnter Web services. Through a portal built on Web services technologies, registered users can now log on to the company website to plan workouts, book massages and chart their fitness progress. Life Time employees can also manage their schedules and keep track of clients via the company intranet. This may sound like small potatoes, but the implications for Life Time\u2019s business?and for other companies?are broad. And without Web services, the company would not have been able to afford to build its own scheduling system. The health club chain started working on its Web services approach in 2000, when the IT department was migrating away from its legacy environment and its dependence on a single technology vendor. "The original goal was to reduce the cost of building new applications and to shorten the time it takes to get into production," says CIO Brent Zempel. Life Time initially set out to build a Java-based member management system for its internal use. Once that project was complete, the company started to experiment with Web services that could move beyond its firewall. Instead of developing all the applications in-house, Life Time partnered with vendors such as Xtime, an ASP in San Mateo, Calif., that develops time-management and scheduling software. The result: Life Time is able to integrate its Internet and intranet with the Xtime application using Web services. For example, when a fitness club member starts the Xtime application on Life Time\u2019s website, that move triggers a hyperlink to an Xtime secure page. The sites exchange certificates to verify each other\u2019s identity, and the member\u2019s information is transferred from Xtime back to the Life Time site via a SOAP interface. Life Time hasn\u2019t yet used UDDI because its services are published only to known client subscribers. But it does plan to start using WSDL within the next six months in order to describe what services it offers and how customers can connect.Life Time Fitness says it\u2019s hard to judge exactly how much money it will save through Web services technology. But Zempel and Wesley Bertch, director of software systems, say the company could never have built the "services automation engine" that it now subscribes to through Xtime. "We would not have been able to afford the $20 million it would have taken to do this ourselves," says Bertch.Despite the broad advantages, Bertch notes that moving to Web services is more complicated than plugging into an ASP. The company\u2019s 52-member IT staff had to be retrained in Java technology and in the use of Web services standards such as SOAP. And because Life Time links its website to an outside ASP (Xtime) via Web services, the development team had to set up an elaborate system for security. "We\u2019ve dealt with security using brute force," Bertch says. By that, he means his developers have manually set up authentication certificates between the two sites. "This kind of manual work can be time-consuming," he says. "But the benefits of what we\u2019re getting out of Web services?such as faster development time and cheaper implementations?outweigh some of the pain associated with it."And Life Time officials say they expect that the benefits of Web services will only grow as more suppliers and vendors jump onto the bandwagon. Life Time also has its own plans to bring in revenue from its Web services initiatives. According to Zempel, about 80 organizations, including other health club chains and universities, have asked to purchase Life Time\u2019s member management system.MedBiquitous A Web Services Prescription\n\n\nThe need to link doctors to medical research spurs Web innovation\n \n\nAs a cardiothoracic surgeon, Dr. Peter Greene wanted to be able to stay on top of his specialty online by exchanging the latest on surgical procedures and new research at one site. With that ambition, he helped start CTSnet.org, which brings together 40 societies related to his field into one online community. "My goal was to instantly be able to put my fingers on the latest information from the around the world, all with a single sign-on," says Greene. "We learned that we could share a common server and middleware to help us stay in touch."\nThrough his experience with CTSnet.org, Greene, the associate dean for emerging technologies at Johns Hopkins University Medical School in Baltimore, saw a greater opportunity. Why not bring together the world\u2019s medical societies and allow them to communicate online using a common platform? The problem was that these thousands of sites all ran on different systems and used different software. For the past year, Greene and his colleagues?with help from IBM, Rational Software and Sun?have been working to create core standards that will use Web services to link the associations.The MedBiquitous Consortium, which now has 23 members including the American Medical Association, is in the process of setting up these standards and is testing applications that will allow doctors to share information about the latest research, education and training opportunities on an unprecedented level. "Health care is a $1.3 trillion cottage industry, and there are silos of information that will never get unified on common databases," Greene says. "Web services technology addresses the reality that you\u2019ll never join the hardware, but that you can get them speaking over the same platform."Some applications are already in testing mode. A doctor can log on to her professional society\u2019s website and look for online continuing education courses related to her medical specialty. The society\u2019s site uses Web services to gather course listings from other societies, and the doctor can take one course residing on another society\u2019s server without leaving her own society\u2019s website. With help from CorMed, the consortium\u2019s for-profit arm, individual medical societies can now take advantage of applications ranging from membership management (in a similar way to how Life Time Fitness uses Web services) to journal article submissions and online discussion forums.In the end, the idea is to create a network of communities through which doctors can communicate and keep track of new research and techniques. "We want to make it so doctors don\u2019t have to worry about the technology," says Jon McBride, CTO at CorMed. "They should be able to get real-time information when they need it instead of digging around on dozens of sites."But given that doctors haven\u2019t always been the easiest to convince when it comes to trying new technologies, will they use the new systems? Greene says, "Yes." The main barrier has been convincing doctors that they can save time by using the Internet and other technologies. "Doctors need technology that will help them do their work more efficiently," he notes. "If you slow them down, they won\u2019t use it. We\u2019ll get broad adoption if we get the right, usable technology out there." And Web services might just fit the bill.