Are Content Proivders Ready For Web Services?

Although the current incarnation of “software as a service” has been around for six years (branded as web services or SOA), I continue to be amazed at the number of content providers that remain unprepared for the new distribution channels afforded by web services. Interestingly enough, most of the hand wringing surrounding web services has more to do with developing a coherent business model that supports the channel rather than the technologies required to leverage the channel. Fear of alienating traditional partners, cannibalizing existing sales and in some cases, sheer market leader arrogance, are keeping many providers on the sidelines.

Without a doubt, web services is a both disruptive technology and business concept. The prospects of devising new business models to support customers of different stripes can be daunting. However, web services offers providers a golden opportunity to expand distribution beyond the narrow market segments they traditionally serve. So while the challenge of constructing new models is significant, failure to do so can be devastating. Most organizations are slow to implement new or supplemental business models because; they’re expensive to devise, promote and implement, they’re difficult to retract and they may expose broader strategic plans to competitors. While these concerns are genuine, collectively, they represent the largest impediments to innovation which is an open invitation to bolder and more nimble competitors.

So, is there a way to gauge the new business opportunities presented by web services in a covert way? The answer is yes and the concept is far from new. For years, organizations have tested new offerings and expanded distribution through carefully selected partners. In fact, there are a number of syndication partnerships in the content business today that could easily serve as a model for organizations looking for new distribution channels. For example, a number of content and software providers have partnered with companies such as Salesforce.com to co-distribute their wares in ways and at price points they never dreamed possible. Although most customers think of these combined offerings as “Saleforce add-ins”, they actually allow providers to test new business models in a more covert manner. By providing add-ins under the Saleforce umbrella, providers are free to experiment and limit the risks of making a commitment to a specific model.

The point is content providers need to acknowledge that web services will ultimately change the way their industry works and open them up to a plethora of new opportunities and customers. However, there is no need to go for broke right out of the gate when they can test new business models by partnering with organizations such as strong vertical application providers, web services networks and data aggregators.

In the web services world, content providers should look for partners who have complementary offerings that can be bundled together to create new offerings.