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Web Services Business Models


Web services brokerages and portals aggregate Web services targeted to a specific industry Service-Oriented Architecture Service ... sports scores or stock quotes. – PowerPoint PPT presentation

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Title: Web Services Business Models

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-tobusiness (S2B) and service-to-employee
    (S2E) Web services, and to provide examples of
  • To examine Web services registries, brokerages
    and networks, and to provide examples of each.

Web Services Business Models
  • 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

  • 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
  • Two important aspects of these models
  • service-level agreements
  • payment mechanisms

Frameworks for Delivering Web Services
  • Web services technologies can create new business
  • 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 administration or inventory

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
  • 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-Oriented Architecture
Service-Oriented Architecture
  • 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-Oriented Architecture
  • 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

Service-Oriented Architecture
  • 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

Service-Oriented Architecture
  • 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.
  • 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

Service-Oriented Architecture
  • 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

Service Provider
  • Not necessarily the creator of the services
  • May employ a third party to host and maintain the
  • 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
  • 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
Web Service Business Lifecycle
  • Four stages creation, publication, promotion and

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

assemble documentation
Creation Stage
  • 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
  • No standard testing procedures now
  • Should be crucial to Web services development

  • 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

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

SLAs stipulate QoS requirements
  • 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

SLAs stipulate QoS requirements
  • Integrity
  • Describes the probability with which a service
    performs its tasks in the exact manner described
    in the service's WSDL document or service-Ievel
    agreement (SLA)

SLAs stipulate QoS requirements
  • Performance
  • comprised of two main factors throughput and
  • 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

SLAs stipulate QoS requirements
  • Reliability
  • Describes the ability of a Web service to
    function correctly and provide consistent
    service, even in the event of a system or network
  • Also encompasses procedures for data backup and

SLAs stipulate QoS requirements
  • Conformance to standards
  • Describes whether a Web service employs the
    specific standards and implementations
  • Service providers must adhere to standards agreed
    upon in SLAs
  • otherwise, requesters might not be able to access
    the services

SLAs stipulate QoS requirements
  • Security
  • involves technologies and processes such as
    authentication, message encryption and digital
  • An SLA defines the amount of security that a
    particular Web service requires, and the service
    provider then must maintain that level of

Importance of SLAs
  • SLAs are crucial to the success of the Web
    services industry
  • Web service customers must be able to trust that
    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
  • providers know that the cost of litigation often
    is far 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
  • 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 other
    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
  • 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
  • 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
  • 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
  • Models that support service-to-employee (S2E) Web

Service-to-Consumer (S2C) Web Services
  • Web services intended for consumption by
    individuals, rather than businesses
  • Brokerages list S2C services that provide general
  • E.g., news headlines, sports scores or stock
  • Web services can simplify the process of
    communicating content or requested data to users
  • Many S2C are free and offer only trivial
  • most service creators do not have defined
    business models or immediate plans for

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
  • Free services
  • E.g., Book air travel, car rentals and hotel
  • Access updated travel information, such as flight
  • Enable travelers to integrate the latest travel
    information into their personal calendar
  • 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
  • Microsoft's .NET Passport
  • Single Sign-on service (SSO)
  • stores users' authentication information and
    enables automatic sign-on at participating Web
  • Each Passport account encompasses four components
  • a Passport Unique Identifier (PUID).
  • a user profile,
  • credential information
  • an optional wallet feature called Express

Microsoft's .NET
  • Assigns a PUID to each, enabling Passport to
    distinguish among users
  • A user profile is associated with each Passport
  • 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
  • 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 security and privacy

Service-to-Business (S2B) Web Services
  • Recognizing the advantages of interacting via Web
    services, many companies are developing S2B Web
  • 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
    partners to access their S2B Web services
  • address a wide range of business communications
  • E.g., Dollar Rent A Car Systems (www.dollar.com)
    developed 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
  • 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
  • With more than 250 client companies
  • Manages retirement. plans, healthcare benefits
    and other services for over 15 millIon employees
  • Want to offer employees convenient access to
    their personal retirement and benefits
  • retrieve data or change options through
    customer-service 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
  • The costs and development time involved seemed
  • 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
    Hewitts mainframe
  • Translates the request from returns an XML and
    processes 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

Web Services Networks
  • 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 Networks
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