Gartner Survey Shows Companies Continuing Web Services Development Despite U.S. Economic Slowdown

STAMFORD, Conn.--(BUSINESS WIRE)--The sluggish U.S. economy has impacted the investments by many companies in Web services projects, but it has not killed these projects, according to a survey by Gartner, Inc. (NYSE: IT and ITB). According to the survey, 48 percent of North American enterprises said the economic slowdown has caused them to reduce spending on Web services development, but not so much as to discontinue these projects.

In January and February 2003, an Internet survey was conducted of 111 Gartner/Griggs-Anderson panel members based on their involvement with initiatives relating to Web services. This survey was designed to identify and analyze trends involving current and future Web services development projects during the next 12 to 24 months.

While some respondents said they were reducing spending on Web services, nearly one-third of those surveyed indicated that the economic slowdown has not affected their organization's budgeted investment in Web services development projects. For these companies, application development, including Web services, is one of the last budgets to be raided when budget cuts are made.

"These survey results show the level of commitment that organizations have toward their Web services development initiatives," said Nicole Latimer, industry analyst for Gartner. "For these organizations, Web services development projects are at the top of the list of company priorities and is one of the last budgets to be raided when budget cuts are made."

According to the survey, 54 percent of users noted that they used or planned to use Web services to integrate applications both within the organization, as well as with partners or customers during the next 12 months. During this same time frame, 39 percent used or planned to use Web services only within their organization. However, when the time frame is extended to during the next 24 months, 65 percent of respondents said they used or were planning to use Web services intra- and inter-enterprise, and only 23 percent limited Web services projects to only within the enterprise.

During the next several years, the software and professional services markets will undergo considerable consolidation. Those left standing are likely to have recognized that Web services have ushered in a new design center for development and integration -- the business process. Successful companies will have revamped their skills mix and replaced commodity technology skill sets with business process and management experts and technology.

"To take part in the Web services 'wave', software vendors and system integrators must communicate a clear, concise, cost-saving message to potential customers," said Latimer. "Each vendor must tell a clear, distinct story about how Web services will benefit enterprises and how Web services will evolve to transform their businesses."

Additional information is available in the Gartner Dataquest report "2003-2003 Web Services Development, North America." This report looks at the perception of Web services standards in development and integration projects, and the methods and means that organizations use to plan, budget and integrate them with established business applications. This report can be purchased on Gartner's Web site at www.gartner.com/DisplayDocument?doc_cd=115909.

Gartner, Inc. is a research and advisory firm that helps more than 10,000 clients leverage technology to achieve business success. For more information, visit www.gartner.com.

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