Web services are currently in the early adopter phase, with immature standards and infrastructure. Organisations are experimenting, primarily behind the firewall, with Web services for application integration and new development.

From a technology perspective, the key barriers to adoption are:

Security: There is no broad agreement on the type of security needed and there is overlap or conflict between emerging standards.

Identity: There is no agreement on how information about users should be managed.

Transactions: Web services are based on a loosely-coupled architecture - there is currently no support for distributed transactions.

Messaging: There is no standard mechanism for reliable messaging, and there are conflicts between proprietary messaging systems.

Processes: The means to define collaborative business processes, such as XLang from Microsoft and WSFL (Web Services Flow Language) from IBM, are only in the early phases.

Infrastructure: There is currently no system for billing, payment and provisioning for commercial Web services.

Interested organisations should monitor these barriers, and consider joining the Web Services Interoperability Organisation (WS-I). They should also assess how Web services could benefit their infrastructure, focussing on tactical rather than strategic initiatives.

It is still too early to guess at the financial implications of Web services. In the short term simplified integration and outsourcing promise benefits, but investment will be required in new skills and new architectures. Immature technology is typically expensive to deploy and support and there are significant unanswered questions. What business models will work? Who will provide the commercial infrastructure?

As the technology matures, between 2004 and 2005, we will see collaborations between trusted partners, rather than the global collaboration envisioned today, as the mechanisms to establish mutual trust will still not be in place.

Neil Macehiter is a senior consultant at analyst firm Ovum.

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