Q&A: John Hagel on the business impact of Web services

By Thomas Hoffman

November 4, 2002 12:00 PM ET

Computerworld - Even though Web services are a fairly nascent set of technologies, there are already fundamental flaws with some of the "conventional wisdom" that has emerged from the practice. So says John Hagel III, an independent consultant and author whose latest book with John Seely Brown -- Out of the Box: Strategies for Achieving Profits Today & Growth Tomorrow Through Web Services (Harvard Business School Press) -- went on sale last week.
Hagel, 52, the former chief strategy officer at 12 Entrepreneuring Inc., a San Francisco-based operating company that nurtured IT innovation, was also formerly the leader of the e-commerce practice at New York-based McKinsey & Co. He spoke with Computerworld earlier today about some of the misconceptions surrounding Web services and how they can help companies achieve quick payback through minimal investments.

Q: What led you to write a book on this topic?


John Hagel III, an independent consultant and author

A: I got into this area at the tail end of my last book, Net Worth (Harvard Business School Press, January 1999). I wrote about emerging standards at the time, such as XML, and the business impact they might have. Over time, I began to see more and more potential from [Web services] and more and more confusion from business executives about its value.
Q: What are some of the misconceptions that both IT and business executives have about Web services?
A: It's still in the early stages for Web services, but there's some conventional wisdom that I think is very wrong. For example, some people believe that early adopters should focus on using Web services to dynamically compose a set of applications from a series of subservices. In truth, much of what's being done today is connecting mundane legacy applications with each other. It's not that exciting; it's basic plumbing activity. But a lot of inefficiencies in business today have to do with lack of integration between systems, what I call "swivel-chair'" applications. The real business value in the near term is around connecting existing applications.
A second contrarian view to conventional wisdom is that the initial integration will occur within the firewall. But the early work being done is at the edge of the enterprise, such as connecting procurement and sales processes with other activities. So I think there's a fair amount of misconception about where the business value is and where the technology is going to be deployed soonest.
Q: Who are the early adopters?
A: I'm seeing two parallel paths of adoption. One is within the

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