Web Services Business Models

1. Web Services Business Models

2. Web Services Business Models • To explore the infrastructure though which Web service providers deliver their services. • To discuss service-level agreements (SLAs) and how they help ensure the quality of Web services. • To introduce payment mechanisms for Web services, and to discuss available bil1ing solutions. • To examine service-to-consumer (S2C), service-to­business (S2B) and service-to-employee (S2E) Web services, and to provide examples of each. • To examine Web services registries, brokerages and networks, and to provide examples of each.

3. Web Services Business Models • It is an immutable law in business that words are words, explanations are explanations, promises are promises-but only performance is reality. • Harold S. Green • To be of true service I must know two things: his need, my capacity. • Nikita Nikolayevich Panin

4. Introduction • For Web services to reach their potential in the business world, companies must establish plans • how services are marketed, distributed, paid for and managed • Going to introduce frameworks for providing business-grade Web services • including who the key players are • how they interact to facilitate Web services transactions • Two important aspects of these models • service-level agreements • payment mechanisms

5. Frameworks for Delivering Web Services • Web services technologies can create new business opportunities • For software vendors, Web services represent a new method of distributing their products • develop software applications in house to fill corporate needs, such as supply-chain management, human-resources admin­istration or inventory control

6. Frameworks for Delivering Web Services • Enhance their business models and increase revenue by packaging their business processes as Web services, then marketing the services to other companies that require similar functionality • Need new business and possible frameworks though which businesses can create, distribute, sell and use Web services

7. Service-Oriented Architecture • Created by IBM • A generic model describing service collaboration • Comprises relationships among three entities: • a Web service provider, • a Web service requester • a Web service broker

8. Service-Oriented Architecture

9. Service-Oriented Architecture • Service provider • A server or system that makes a Web service available over a network, such as the Internet. • Achieves this through a service interface • a software component that enables other applications to access the service • Publishes the service to a service broker after creating a service interface

10. Service-Oriented Architecture • Service broker • A networked server or system that maintains a directory or clearinghouse for Web services • Act as liaisons between service providers and service requesters • communicate with service requesters and direct them to appropriate service providers • E.g., • the operators of the public UDDI Business Registry (UBR) • offering information about service providers and their available Web services. • Web services brokerages and portals • aggregate Web services targeted to a specific industry

11. Service-Oriented Architecture • Service requester • A networked server or system that accesses and employs a Web service • Interacts with a service broker to find a Web service that fills a specific computing need

12. Service-Oriented Architecture • Although the provider, requester and broker technically are computing systems, we use the terms more generally to refer to the individuals or businesses that manage those systems. • E.g., companies that aggregate content communicate with a variety of data sources to amass information and present it to customers. • yahoo.com or msn.com rely heavily on combining information from multiple sources

13. Service-Oriented Architecture • Service aggregation • a newer concept referring to businesses that combine electronic services to provide a single, more comprehensive service to customers • E.g., a company offers a composite service for automobile owners combining features such as on-demand directions, roadside assistance, online concierge and stolen vehicle tracking

14. Service Provider • A service provider can be any organization that creates or hosts software and wants to make that software available over a network. For example, • Application service providers (ASPs) • ASPs already possess infrastructure • Independent software vendors (ISVs) • Company that specialize in the development and sale of software • Not directly associated with a specific platform • might become Web service providers • Companies create Web services available only within their organizations or to trusted business partners

15. Service Provider • Not necessarily the creator of the services • May employ a third party to host and maintain the services • the hosting entity is the Web service provider • it manages the computing system on which the service resides • The creator of the service is called the asset owner • If a company both develops and hosts a Web service, that company is both the service provider and the asset owner

16. Stages of Web Service Development and Deployment Discuss the tasks that comprise the Web service development process, from generating an idea for a service to actually deploying and selling that service

17. Web ServiceBusiness Lifecycle • Four stages: creation, publication, promotion and sale

18. Creation • Creation includes • the initial construction of the Web service • the steps required to prove that the service operates correctly assemble documentation Designer Developer test Creation Stage

19. Creation • Creation Testing • Organizations that develop Web services can test them in house. • However, an independent third party that specializes in the assessment of Web services functionality and interoperability should administer the tests and provide a form of certification • No standard testing procedures now • Should be crucial to Web services development

20. Creation • The final step • Creation process is handled by a distributor • Can be either the same as or separate from the service's owners • Package all the code and documentation relating to the Web service in a format that can be understood and used by other applications • Make decisions regarding the publication of the Web service • Exposing all necessary pieces of a Web service on a network • Can outsource these tasks • ASPs, ISPs, and Web-hosting companies are the most obvious choices to host Web services

21. Promotion • Third parties must enable service requesters to locate the service • Carried out by brokers • public UDDI registries • the UDDI Business Registry (UBR) • private registries • promote Web services available within an organization or among partners • www.xmethods.net and www.salcentral.com have created their own Web services directories

22. Sale of Services • Two main anticipants • a company or organization that manages Web services accounts • can be the entity that hosts the service or a separate organization that specializes in billing • Web service auditor • an individual or organization responsible for reviewing the functionality of Web services • service provider might ask an auditor to reevaluate the service on a regular basis

23. Service-Level Agreements (SLAs) • Legal contracts in which a service provider outlines the level of service it guarantees for a specific Web service • SLAs cover a specific time period, after which the agreements must be renegotiated • When customers purchase Web service subscriptions, their subscriptions guarantee service according the contents of the SLA

24. Service-Level Agreements • Most SLAs define relationships between Web service providers and requesters • Delineate the requester's needs • goals with regard to the service • the capabilities of the provider to meet those requirements • In SLAs between developers and providers • the developer specifies the capabilities of the service • the provider outlines the level of service it will provide to the service's requesters

25. Service-Level Agreements • An important function of SLAs is to address quality of service (QoS), which refers to the level of service that a particular Web service provides • QoS is defined by factors • such as the probability that a service can respond to a request at a given time, • how well a service executes its tasks, • how quickly a service works • how reliable and secure it is • Etc.

26. SLAs stipulate QoS requirements • Availability • Describes the probability that a Web service is ready for use (i.e., available) • Measured as a percentage • E.g., a Web service might be available to service requesters 99.99 percent of the time.

27. SLAs stipulate QoS requirements • Accessibility • Describes the group of users that can access a service, as well as how difficult it is to access the service • For example, a Web service that supports multiple languages (such as Spanish, Japanese, etc.) would more accessible than a Web service that supports only English

28. SLAs stipulate QoS requirements • Integrity • Describes the probability with which a service performs its tasks in the exact manner described in the service's WSDL document or service-Ievel agreement (SLA)

29. SLAs stipulate QoS requirements • Performance • comprised of two main factors: throughput and latency • Throughput • Represents the number of requests that a Web service processes in a given time period • latency • Represents the length of time that the service takes to respond to each request

30. SLAs stipulate QoS requirements • Reliability • Describes the ability of a Web service to function correctly and provide consistent service, even in the event of a system or network failure • Also encompasses procedures for data backup and redundancy

31. SLAs stipulate QoS requirements • Conformance to standards • Describes whether a Web service employs the specific standards and implementations • Service providers must adhere to standards agreed upon in SLAs • otherwise, requesters might not be able to access the services

32. SLAs stipulate QoS requirements • Security • involves technologies and processes such as authentication, message encryption and digital signatures • An SLA defines the amount of security that a particular Web service requires, and the service provider then must maintain that level of security

33. Importance of SLAs • SLAs are crucial to the success of the Web services industry • Web service customers must be able to trust that services will adhere to certain quality-of-service requirements • Help ensure the reliability of a Web service • Include information regarding liability • If a deficiency in service impacts the requester's business, the provider is legally responsible to compensate the requester.

34. Importance of SLAs • However, even with SLAs in place, quality of service is not guaranteed. • Service providers still might not honor their contracts • providers know that the cost of litigation often is far greater than the cost of switching to another provider

35. Web Services Payment Models

36. Web Services Payment Models

37. Free Charge • Most publicly available Web services are free • It is important that service providers supply free services to publicize Web services and to encourage users to experiment with the technology • Designed to provide an immediate benefit while requiring little commitment on the part of the requester • E.g. supply news-headline services and calendar services for free • Some offer free services in exchange for displaying the provider's brand or logo

38. Free Charge • Service providers hope that, after successfully using free services, requesters will return and subscribe to more complex, fee-based services • Free services can be appealing, fee-based services usually are more reliable • Free services are not governed by SLAs or other QoS assurances

39. Pay-per-use Model • Involves the smallest commitment from customers • Most pay-per-use services require that requesters purchase a set number of service invocations • Requestors prepay for a certain volume of service, • Then can decide whether to renew once they exhaust their prepaid limits • If no minimum to the amount of service that customers can buy, • The small usage fees might not justify the cost of billing • Include a mechanism • counts and records the number of times each requester uses the service

40. Pay-per-use Model • Charge on a sliding scale • requesters who buy more service invocations incur a smaller cost per unit • Requesters use the service before paying Model • billed according to the number of times they invoke the service • Such models are riskier for providers • cannot be sure that customers will pay

41. Flat-fee subscription Model • Service requesters pay a fee for unlimited use of a Web service during a specific time period • Most experts believe that, flat-fee subscription will become the most common way to charge for Web services • The providers can better predict their incomes • Can place service providers at a disadvantage if providers underestimate the amount of service that requesters will use

42. One-time charge Model • Requesters pay a single fee in exchange for unlimited access to the service for the entire lifetime of the service • For most services, this billing model is impractical • However, one-time payment is an ideal charging mechanism for perishable services, or services that exist for a finite period of time • E.g. specific Olympic games, World Series or presidential campaign

43. Business of Publishing Web Services • Three main categories • Models that support service-to-consumer(S2C) Web services • Models that support service-to-business (S2B) Web services • Models that support service-to-employee (S2E) Web services

44. Service-to-Consumer (S2C) Web Services • Web services intended for consumption by individuals, rather than businesses • Brokerages list S2C services that provide general information • E.g., news headlines, sports scores or stock quotes. • Web services can simplify the process of communicating content or requested data to users • Many S2C are free and offer only trivial functionality • most service creators do not have defined business models or immediate plans for profitability

45. Service-to-Consumer (S2C) Web Services • Some companies are including Web services as part of larger offerings, such as travel services or customer-relationship management • “Expedia, Inc" maintains an online travel agency (www.expedia.com) • Free services • E.g., Book air travel, car rentals and hotel accommodations • Access updated travel information, such as flight status • Enable travelers to integrate the latest travel information into their personal calendar applications • Differentiate itself from competitors in the online travel industry

46. Microsoft's .NET • Microsoft's .NET My Services • A set of S2C Web services that stores users' personal information • Username and , password pairs, appointment schedules, travel information and credit-card data • Microsoft's .NET Passport • Single Sign-on service (SSO) • stores users' authentication information and enables automatic sign-on at participating Web sites • Each Passport account encompasses four components • a Passport Unique Identifier (PUID). • a user profile, • credential information • an optional wallet feature called Express Purchase

47. Microsoft's .NET • Assigns a PUID to each, enabling Passport to distinguish among users • A user profile is associated with each Passport account • Credential information consists of an email address or phone number • A password containing a minimum of six characters • Passport user also selects a four digit security key • A large number of business allow visitors to log into their Web sites via the Passport authentication system • eBay, McAfee.com, Monster.com, Office Depot • Critics have raised significant concerns regarding security and privacy

48. Service-to-Business (S2B) Web Services • Recognizing the advantages of interacting via Web services, many companies are developing S2B Web services • communicate with one another and share data, regardless of platform • simplify existing transaction processes • enable the formation of new, more streamlined relationships among organizations • link their databases and applications • companies share updated data • Etc.

49. Service-to-Business (S2B) Web Services • Currently, most businesses allow only trusted partners to access their S2B Web services • address a wide range of business communications needs • E.g., Dollar Rent A Car Systems (www.dollar.com) developed a Web service linking its reservation system directly to Southwest Airlines Company's Web site (www.southwest.com) • Purchase plane tickets and rental-car reservations from the same Web page • Communicate with their client businesses

50. Service-to-Employee (S2E) Web Services • Web services specifically designed for use by employees • The services can take many forms • Some S2E Web services help companies deliver information to employees, whereas others simplify interactions among employees • Enable employees with appropriate access rights to use corporate applications and modify files over the Web