Speaking
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on topics related to business, strategy and technology. From conceiving and implementing FAST strategies to pragmatic technology approaches, I seek to challenge traditional assumptions and help uncover simple, yet profitable solutions best suited to your company's situation. Get details >>

Papers
- Moving from Push to Pull - Emerging Models for Mobilizing Resources (PDF)
John Hagel and John Seely Brown

- Capturing the Real Value from Offshoring in Asia (PDF)
John Hagel

- The Agile Dance of Architectures – Reframing IT Enabled Business Opportunities (PDF)
John Hagel and John Seely Brown


- Overview of Working Paper Series (PDF)
John Hagel and John Seely Brown

- Break On Through to the Other Side: A Missing Link in Redefining the Enterprise (PDF)
John Hagel and John Seely Brown

- The Secret to Creating Value from Web Services Today: Start Simply (PDF)
John Hagel, John Seely Brown and Dennis Layton-Rodin

- Service Grids: The Missing Link in Web Services (PDF)
John Hagel and John Seely Brown

- Some Security Considerations for Service Grids (PDF)
Martin Milani and John Seely Brown

- Control versus Trust: Mastering a Different Management Approach (PDF)
John Hagel and John Seely Brown

- Orchestrating Business Processes - Harnessing the Value of Web Services Technology (PDF)
John Hagel and John Seely Brown

- Orchestrating Loosely Coupled Business Processes: The Secret to Successful Collaboration (PDF)
John Hagel, John Seely Brown and Scott Durchslag

   

Viewpoint
June 25, 2002

Where will Web services be deployed? - Part 1

Confusion reigns supreme in the Web services world (for a brief, business-oriented view of Web services technology, see my article "Your Next IT Strategy" in Harvard Business Review). Technologists unwittingly contribute to this confusion. Let's take two examples. Read the technology press and you hear two themes. First, Web services are about the dynamic composition of applications from many micro-services. Second, Web services will be deployed first within the enterprise and then migrate beyond the firewall.

Start with this notion of dynamic composition. The average non-technology executive hearing this scratches his/her head and says, "Great, but where are all the micro-services to be knit together?" We've got the proverbial chicken and egg problem. We can't compose, if we don't have micro-services. We won't have micro-services unless there's a lot of composition going on.

Dynamic composition is a great vision of a distant future. But what are we going to do with Web services today? The answer is pretty boring, at least for the technology visionary. We're going to use the technology in a very mundane way, to build low-cost and flexible connections across very large and diverse applications already installed in companies. While mundane from a technology perspective, this capability gets a business executive's juices going. "You mean I can take 15% out of my operating budget with modest investment and short lead-times by eliminating the swivel chair connections I now use to connect major applications?" Yup.

In these economic times, that's a compelling value proposition (for more on early experience with this value proposition, see my article "Your Next IT Strategy" in Harvard Business Review) Equally importantly, it gets us out of the chicken and egg problem. The applications are already in place. All we're doing is automating connections. This process will start to build necessary skills and experience, and then the light will go on. Other uses of this technology start to come into focus.

To the dismay of the technology visionary, these uses of Web services still involve large legacy applications. The next stage will enhance the functionality of these legacy applications. Today, the big frustration is that these mega-applications (e.g., procurement, inventory management, order entry, billing) are solid like the Rock of Gibraltar. That's the bad news. Try adding a new feature - let's say you have a great new product you'd like to introduce to your customer and you need to modify your order entry system. Stand in line - the queue begins way over the horizon and maybe by the time you retire you might actually get near the front of the queue.

Web services technology will help to more quickly add functionality to existing applications. Rather than implementing new functionality as part of the core application itself, new modules can be developed on the side and accessed by the core application through Web services interfaces (see the example of CommerceOne using Citibank's payment processing engine as a way to enhance its electronic marketplace platform discussed in my "Break on Through to the Other Side: A Missing Link in Redefining the Enterprise" working paper. This expands the range of programming resource that can be mobilized and the queue begins to shrink to a more manageable size. Once again, the chicken and egg problem is minimized. More skill and experience accumulates around this new technology.

Now we're ready for a third stage. Sorry, it still doesn't involve dynamic composition of major new applications. It does involve development of major new applications using Web services technology. Application developers will start to have enough skill and experience to begin to attempt the design and implementation of major new applications with this new technology. They will also see the advantages of employing this new technology in terms of flexibility to incorporate new features over time. While these applications will be designed around major components or modules, these components or modules will be largely fixed, at least at the outset. We won't be dynamically composing these modules - they'll already be in place.

The fourth stage begins to introduce dynamic composition, but it won't involve micro-services. Instead, we will be working to dynamically bring together larger application services in process networks (for more on process networks, see my working paper on "Orchestrating Loosely Coupled Business Processes: The Secret to Successful Collaboration"). The goal here will be to access and mobilize very large applications of business partners to tailor broader business processes to meet the needs of specific customers or products.

Finally, after much effort, we may eventually reach the fifth stage where we see the full unbundling of larger applications and the ability to compose applications on the fly from micro-services. By then, there will be lots of micro-services around in the form of elements of legacy applications that have been exposed using Web services interfaces, plug-ins operating around larger legacy applications and components from major new applications designed with Web services technology. More importantly, we might actually have a critical mass of skills and enabling services to help us manage dynamic composition of applications in ways that support, rather than jeopardize, mission critical activities and processes.

Now, by describing this progression as a series of stages, I don't want to imply that these are completely sequential phases. We can see examples of all five stages in play today in one form or another. The real question is "where is the bulk of economic activity concentrated at any point in time?' In answering this question, it is helpful to think of the five stages as overlapping waves of activity.

I know that the technologists will quarrel with me. They will rightly assert that even the mundane connections I talk about in the first stage are examples, although admittedly modest, of dynamic composition of applications. Technically, they are of course correct. My concern is much more with understanding, especially by non-technology business executives. The words and examples used by technologists used to describe dynamic composition of applications are rarely geared to the more mundane examples of the first stage. Instead, they rapidly and eloquently paint grand visions of micro-services floating in the ether and knit together to create entirely new applications on the fly.

Yes, dynamic composition of applications is a marvelous vision of the future . . . the distant future. Executives want to know where the economic value is today. By focusing on dynamic composition of applications, technologists obscure the real opportunity today. They also under-estimate the challenges in realizing this longer-term vision. The migration path may be less exciting for the technology visionary but, by understanding it, we might actually make the distant future a more plausible vision.

No, I haven't forgotten about the second source of confusion - the view that Web services implementation will start within the enterprise and then move beyond the firewall. I've just run out of time, so I'll hold that thought until next time.

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Blogs
- The Big Shift (HBR)
- EdgePerspectives blog

Books

The Power of Pull: How Small Moves, Smartly Made, Can Set Big Things in Motion
by John Hagel III, John Seely Brown, and Lang Davison

ALSO

book
The Only Sustainable Edge: Why Business Strategy Depends on Productive Friction and Dynamic Specialization
by John Hagel III and John Seely Brown

-
Out of the Box: Strategies for Achieving Profits Today and Growth Tomorrow through Web Services
by John Hagel III

-
Net Worth: Shaping Markets When Customers Make the Rules
by John Hagel, III and Marc Singer
-
Net Gain: Expanding Markets through Virtual Communities
By John Hagel, III and Arthur G. Armstrong

Deloitte

ongoing research:
The 2009 Shift Index
The Big Shift Index: Uncovering the Emerging Logic of Deep Change
www.edgeperspectives.com

Cloud Computing working papers

BusinessWeek

The Next Wave of Open Innovation
April, 2009

Does the Experience Curve Matter Today?
April, 2009

Peer-to-Patent: A System for Increasing Transparency
March, 2009

How World of Warcraft Promotes Innovation
January, 2009

Harrah's New Twist on Prediction Markets
December, 2008

Innovation for Hard Times
November 2008

How SAP Seeds Innovation
July 2008

Student Activism Can Change the World
May 2008

Myelin Repair Foundation's Institutional Innovation

May 2008

Learning from Facebook
April 2008

Learning from Tata's Nano

February 2008

Catching the Innovation Wave

January 2008

Phoning from the Edge
January 2008

Embrace the Edge - or Perish
November 2007

Funding Invention vs. Managing Innovation

February 2006

Articles

- Creation Nets: Harnessing the Potential of Open Innovation (co-authored with John Seely Brown) April, 2006

- Connecting Globalization & Innovation: Some Contrarian Perspectives (Prepared for the Annual Meeting of the World Economic Forum in Davos, Switzerland January 25 – 30, 2006; co-authored with John Seely Brown)

- "The Benefits of a Long Distance Relationship" (co-authored with John Seely Brown), August 9, 2005

- "Feed R&D - Or Farm It Out?" (HBR Case Study with Commentary co-authored with John Seely Brown), July 2005

- "Productive Friction: How Difficult Business Partnerships Can Accelerate Innovation" (co-authored with John Seely Brown), February 2005

- "From Push to Pull: The Next Frontier of Innovation" (co-authored with John Seely Brown), 2005, No.3

- "Innovation Blowback: Disruptive Management Practices from Asia" (co-authored with John Seely Brown), 2005, No.1

more articles >>

 

 

 

 

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