When Bill Gates first put the words "Web" and "services" together in 2000 at a Microsoft Professional Developers Conference in Orlando, Fla., Web Services was barely more than a novel idea.

Five years later, it has matured into a technology that developers are now including in their business software.

In just the last year, software developers like Best Software, NetSuite, Microsoft Business Solutions and Money Tree Software all have released new products with Web Services included - some of them for the first time.

Some developers, however, were ahead of the curve and realized the technology's worth right away.

"We felt like the only person in town with it," said Craig Downing, vice president and general manager for Accpac mid-market operations at Best Software. "It was like being the first guy with a fax machine. What good is it being the only guy with this technology? But in the last five years, it has matured, so now we can do those point-to-point interfaces using Web Services."

The big splash into the marketplace's pool hasn't formed just yet, explained David Cieslak, a member of the Information Technology Executive Committee of the American Institute of CPAs. "The plumbing is starting to show up, but as of yet, we're not seeing droves of people jumping into the pool saying, 'This is the neatest thing!'" he noted. "From a technology perspective, is it a good way to do things? Absolutely yes, it's a very good and solid way to approach things."

E-mail between apps

Web Services has yet to be defined by the industry, but one definition states that it is a standardized way of integrating applications using XML, SOAP, WSDL and UDDI open standards over the Internet.

Web Services can also be defined as a technology that links applications together using the Internet, with XML, the standard universal financial language, and simple object access protocol.

The best way to think of Web Services, according to Aaron Harris, director of integration engineering for Intacct, is to "think of it like an e-mail between applications instead of between people." SOAP defines what this "e-mail" has to look like, and XML is the language it is written in.

Most financial software communicates with other programs in XML. For example, Accpac has an XML interface built into its enterprise resource planning systems so it can talk to Microsoft's CRM products or any other company's add-on software with an XML interface. Web Services uses the Internet to connect the two applications, and then the two talk in XML.

Without Web Services, companies would need to hire a programmer to create the software code with which the two software systems could speak to each other.

"Web Services really makes things possible that were not possible before," said Harris. "The two biggest advantages are that it eliminates redundant data entry, and automates business processes spanned over two systems."

For businesses that use a point-of-entry system that is not from their back-office software company, for companies trying to integrate their e-based store with their ERP application, or for CRM customers who want to use available tools off the Web like address verification systems from the Post Office, Web Services provides these services free. The elimination of a programmer or middleware product to connect any of these two systems results in substantial savings for small and midsized businesses.

"We're trying to get the smaller companies into an equal playing field as the big guys," said Bob Tira, software architect for Total Planning Systems, a financial planning Web- and server-hybrid application from Money Tree Software. "We can take a firm of five people and they can have the same benefits as some of those larger firms with an affordable way to compete."

Just like any financial software that cuts down on redundancy or dual entry, Web Services makes accountants' jobs easier. Because the integration between two systems becomes seamless with Web Services, the need to perform dual entry is eliminated - which, in turn, reduces human errors.

"It's the Holy Grail for the CPA marketplace who want to reduce the number of separate databases where their client's data is scattered all over the place - it's much better at creating a core application," said Cieslak.

Visibility into clients' financial software is a key factor in how much time an accountant spends chasing down numbers and fixing errors. By having a seamless connection to the general ledger, Web Services technology gives accountants the visibility to see more of their clients' data within one spot and without having to double-check on important figures.

Waiting for the epiphany

True, business is much easier for companies and their CPAs, with one core accounting application seamlessly integrated with all of their business processes. But the "epiphany moment," as Cieslak referred to it, where more companies start buying applications with Web Services, has not happened yet - and it will be a few more years before it does.

"I'm not sure what that magic moment is going to be," said Ceislak. "For the most part, there has been a real slow kind of a light interest, rather than businesses jumping in whole- heartedly and going for it."

He explained that SMBs that already have good integration among their products won't abandon their already-installed applications to purchase new ones with Web Services. "Cost over benefit," said Cieslak. "Why would SMBs spend the extra money for something that is not broken? They would not and they are not."

"Web Services is not a silver bullet," said Mini Peiris, senior director of product management at NetSuite. "Once you write the integration, you have to maintain it. I would caution SMBs with small IT departments that Web Services won't solve their problems. Understand when and why you need it, but make sure there isn't an easier way to automate your system."

While Web Services is essentially the only way in which two different systems can speak to each other without a programmer or extra coding being written, it is still not of the highest quality, said Accpac's Downing. "If I have to integrate with another company in a different system on a different technology, I can still speak to them over Web Services," he explained. "But it's not a high-performance way, usually. It's like when you travel to Europe, most people in big cities speak English, but they are not proficient, but good enough."

Within the next few years, most agreed that Web Services will spread and mature.

"I believe very strongly that one plus one equals three," said Downing. "Systems that can speak to other systems are proportionally more important to businesses than those that can't. Those that offer Web Services will benefit immensely from this."

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