Start-ups aim to manage Web services

ATLANTA - A new breed of service provider is aiming to help companies exploit Web services, an emerging software concept that may be as complex as it is intriguing.

Start-up Flamenco Networks last week became the latest company to launch a Web service offering that will let customers create applications by stitching together software components on the fly.

Web services, which are being promoted by companies from BEA Systems to IBM to Microsoft, will let applications or clients authorized to interact do so over the 'Net, often without human intervention.

Doing the Flamenco

While the idea behind Web services is to simplify application access, communication and integration by relying on a set of standards such as the XML and Simple Object Access Protocol (SOAP), managing the whole process could prove to be more trouble than it's worth. That's where companies such as Flamenco and newcomer Grand Central Networks, which made its debut in June, come in.

"This is [electronic data interchange] on steroids," says Gartner analyst Daryl Plummer, referring to the technology that dominated online business-to-business communications before the Web emerged.

Don't think of Web service companies such as Flamenco and Grand Central as updated versions of the old value-added networks on which EDI users relied. Those older networks didn't work over a public network such as the Internet and also didn't manage business relationships to the extent that these new networks do, Plummer says.

He says it would be "a real killer" if the new networks turned out to be closed communities, like so many value-added networks, where "you can only access Web services if you're part of the 'right' network."

Flamenco, led by Bell Labs veteran David Spicer and a crew of application vendor alumni, has designed a network service that relies on a centralized site for handling management chores, such as billing and security, and peer-to-peer technology for supporting communication between applications. Beaten to its first choice for a company name - Tango - executives instead chose the name Flamenco because it's a coordinated dance that relies on parties working together. The company has nabbed between $5 million and $10 million in financing from Noro-Mosely Partners and Cordova Ventures.

To use Flamenco's services, companies register at Flamenco's Web site, which relies on a centralized management system at a data center in Atlanta that's connected to the Internet (or to private networks if the customer prefers). Users specify which companies will access their Web services and under which rules.

For example, a retailer looking to streamline its buying process could tie its purchasing system into Flamenco's network and give distributors and suppliers access to its Web services. The retailer could define rules for buying merchandise based on price, day or quantities, and then let its applications interact automatically with those of its business partners.

Each site accessing Web services must first download proxy software that runs on a Web server and gathers information about the Web services traffic that's sent to and from that site. It's also used in the distribution and verification of X.509 digital certificates, which are used to secure transactions.

Flamenco acts as its own digital certificate authority, which lets the service provider issue, authenticate and revoke certificates. The only other requirement is that the applications are SOAP-enabled.

While Gartner's Plummer points out that most companies have not begun to exploit Web services, many already use software that has been upgraded to support it. Gartner estimates that the industry will spend $4.1 billion on products that support Web services this year. Flamenco charges for its service based on the number of connections to its network. A company that signs up for 100 connections would pay about $4,000 to $4,500 per month. Flamenco also charges a one-time set-up fee of $100,000.

Grand vision

Grand Central's aim is similar to that of Flamenco's, although the companies' services are offered in a different way.

Grand Central, which has secured $10.5 million in funding, has set up eight points of presence (POP) on the Internet that house management servers and interconnect with a Grand Central hub where all customer information is stored. Customers' SOAP requests for a Web service connection first hit a Grand Central POP, which verifies each user's request and matches it against previously established rules.

The POPs update the central management hub with information about traffic delivery and usage. Users can access this central management site via the Internet to check on data delivery and status of requests between Web services. Unlike Flamenco, Grand Central does not require customers to run proxy software on their sites.

Grand Central's service works with applications that support SOAP or the Web Service Description Language, but also provides a gateway for older applications that may not have been upgraded.

Gartner's Plummer says it's not clear whether Grand Central's or Flamenco's approach is better. Some users will prefer peer-to-peer connections such as Flamenco's, but others won't want to deal with installing the additional software required to support that method.

Putnam Lovell Securities has worked with Grand Central for the past six months to integrate its customer relationship management application from Salesforce.com with Blue matrix, an application that manages the content, creation and workflow of research. Bluematrix supports SOAP, but Salesforce.com does not, says Rodric O'Connor, vice president of technology at Putnam.

"Grand Central allows us to build connectors to do a screen scraping that gathers data from Salesforce.com through an XML API. Before we had to do a manual export from Salesforce.com, manipulate that data into an Excel file and download that content to Bluematrix. It was very time-consuming," he says.

The managed Web services setup lets Putnam easily and quickly distribute research to clients, O'Connor says. The company is also talking with other application service providers (ASP) it uses to link their separate systems via Web services.

Grand Central's service costs $2,500 per month for five connections and $5,000 per month for 25 connections. There is no upfront set-up fee.

Although Flamenco and Grand Central are the first service providers with focused Web services networks today, the market is expected to get crowded quickly, Plummer says. Expect to see ASPs and other service providers claiming they offer similar services. Management and application integration software vendors such as Hewlett-Packard and IBM could even get into the act, he says.

Start-ups aim to manage Web services

Grand vision

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