8 Jan 03: Despite Hurdles, Thomson Bets Brighter Future on Web Services

Thomson Financial expects to benefit from substantial cost savings and information delivery economies from Web Services as the global economy begins to recover from its prolonged downturn. In an interview with InfoWorld, Thomson Financial’s vice president of distributive technologies, Mark Barbagallo, said the vendor already had made 20 of its most popular data sets available through Web Services in response to client demand, having delivered its first commercial Web service a year ago.

Thomson Financial, part of the Thomson Corporation, is a major user of Web Services. The Thomson XML architecture initiative embraces the entire corporation and commits to standards based on XML, SOAP, WSDL, HTTP and other protocols. Indeed, the corporation’s CTO council recently told IT executives that Web Services would be a “big deal” for the entire company.

According to Barbagallo, the benefits of Web Services have been highlighted by the economic downturn. “People have had to focus more on cost,” he said in the interview, “and since Web Services truly offer an opportunity for cost savings, it’s an area that [technology] consumers, as well as service providers, are now going to focus on. Thomson Corp. has a huge commitment to Web Services.”

Barbagallo said security is one area where progress has been made. “With even minimal agreements on security, there are things that we can do today that we couldn’t do a year ago,” he said.

Thomson is now positioned to take advantage of Web Services once the economy turns upward. Thomson Financial is an established player in the provision of financial information and market data. With clients already receiving such services, Barbagallo said: “they have nothing more to do than call us up and say, ‘We don’t want to take it through an FTP feed or a leased line. We want to do this through a Web Service. Can you do it?’ And we say yes.”

Although 20 represents only a fraction of Thomson Financial’s entire product line, Barbagallo said he expects others to be made available via Web Services once demand is there. Web Services’ latency issues may prohibit its use for real-time data delivery, limiting it to financial portal applications using delayed data.

But despite concerns about latency from Web Services technology, particularly where real-time updating of information is required, Barbagallo reckons ultimately that cost considerations may render such issues superfluous. “Eventually, there comes a point of diminishing returns where the necessity for the trader on the floor to have mini-microsecond access to market data is outweighed by the cost [to] the company to deliver that information to the trader,” he said.

But it isn’t all plain sailing. Barbagallo said the various standards initiatives aren’t yet reflecting the reality of Thomson Financial’s business, and certain technology vendors aren’t helping matters by failing to collaborate on standards with their competitors.

In particular, Barbagallo is concerned that the standards bodies aren’t considering the vendor-client relationship in their initiatives. “We’re afraid that in some respects, if … you completely enable this total e-commerce business-2-business, you take the … the customer relationship a little bit out of the business. We really value our customer relationships…. The standards are pretty much [concerned with] nuts and bolts – discover it, acquire it, utilize it, pay for it – [but] there’s tremendous value in that relationship between our business and the client.” He added: “We haven’t seen the standard yet that really aligns with our business model, so we’re not jumping on board with any of them yet.”

Similarly, Barbagallo said Thomson hasn’t yet been able to leverage is multibillion-dollar status to influence the technology vendors, such as BEA, Microsoft, IBM and Sun. “I don’t think [Thomson’s influence will yield benefits] until we have some major deal and we’ve got two or three of the vendors sitting at the table, and we look at one of them and say ‘We’d like to use you, but unfortunately you can’t get on board with these other two guys’.”

In the interview, Barbagallo singled out Sun as a culprit in this respect. “I’ve been a little bit disappointed in Sun’s reluctance to get on the same page as some of the other vendors,” he said. “I think they could have done a better job in their relationships with Microsoft and IBM and other competitors.”