Microsoft details web services prices

Microsoft has announced its first chargeable web service, MapPoint.net, which will deliver geographical information, including postcode searches, location services and downloadable driving instructions.

Rik Temmink, group product manager for MapPoint.net at Microsoft, sees consumer portals, mobile service providers and retail chains as potential users of the service.

Enterprises will also be able to develop services that integrate with Microsoft Outlook. The service will be sold directly by the software giant, as well as through its independent software vendor (ISV) channels.

Temmink admitted that educating its partners is important, particularly in the enterprise market. "We still need to educate ISVs on how web services can be used alongside services such as BizTalk," he explained.

Microsoft will charge for the use of MapPoint.net using a transaction-based model.

Each transaction is likely to cost 0.5p and businesses will be required to buy a minimum of one million transactions in each 12-month period. This equates to £5,000 per year to use the service.

Transactions are classified as low-level functions, such as searching for an address or zooming into a map.

Temmink maintained that the transaction model is an experiment in web services pricing.

"There is a problem in identifying how to charge for web services," he said. "We know about software licensing, but different models are needed and we are still establishing these."

Rob Hailstone, software research director at analyst IDC, agreed that current pricing structures are not appropriate.

"Existing commercial charging models don't work for web services. Microsoft's plan is a good start if it is seen as a first attack, but it's unlikely to be appropriate forever," he said.

A lack of technology to support billing models may also cause problems for web services charging in general.

"There's little in the way of mechanisms and technology available for effective transactional charging at present," explained Hailstone. "In the longer term, this will become even more of a challenge."

He believes that the current model will be most appropriate to service providers, which will be able to sell transactions to businesses or consumers at a profit.

John Gillespie, chief technical officer at Pollen Mobile, a UK company that develops mobile applications, said: "We're using SMS to send location instructions to users, so the need to use a separate transaction for each pan or zoom action doesn't affect us.

"The transaction model works well for us, as charges to our consumers are also on a per-use basis. The pricing model is more competitive than other services we've looked at offering location data."

Temmink explained that Microsoft will also experiment with subscription schemes, and insisted that this model could prove better for businesses with 'known' users, such as in-house systems for enterprises.

Subscriptions would comprise a platform access fee, plus per-user annual charges.

However, Gary Barnett, research director at Ovum, expressed doubts as to whether many companies will be prepared to invest in web services at present.

"Web services won't generate a lot of new commerce overnight. There's so much scepticism surrounding them at the moment," he said.