Web services technology could sound the death knell for packaged enterprise software within five years, market watchers are predicting.
The main advantage of enterprise applications to users is that they can provide a level of functionality and integration more cheaply than best-of-breed point solutions, according to Neil Ward-Dutton, research director at analyst firm Ovum.
"Web services will make the integration issues far easier," he said. "Having software delivered as a service will force businesses to make changes."
This is expected to force software vendors to make radical changes in the way they sell products. "Companies like SAP and Siebel are already altering their business models," explained Ward-Dutton.
Siebel has announced plans to release an integration toolkit using web services standards such as XML and Simple Object Access Protocol to ease the integration between Siebel systems and other enterprise applications.
Meanwhile SAP has been pushing its portal technology as a means of simplifying integration.
Other firms such as Akami have enhanced their content delivery technology, enabling them to deliver cached applications at the edge of the network.
This is indicative of the way that boundaries between infrastructure and application vendors are changing, said Ward-Dutton.
"For businesses, this means that they have to start piloting [web services] technology now, even if it's not part of their short-term agenda," he explained.
"But firms should not be fooled into replacing infrastructure with expensive 'web service' enabled stuff yet. There need to be good business reasons for doing so."
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