The Bloor Perspective: IBM and Microsoft must co-operate, offshoring and Openwave's open source gamble

Recently we wrote about IBM and Microsoft being on the same stage and demonstrating web services interoperating across their platforms. This was made possible because they used the same coordination and transaction specifications. IBM and Microsoft stated they plan to take these specifications to a standards body sometime soon. Since that article OASIS has set up a Web Services Composite Application Framework Technical Committee which will have its first teleconference meeting on 31 October. If these two initiatives do not come together the industry is going to suffer. The promise of web services will not be fulfilled. The promise is that business processes can be built up by connecting web services from various partners and vendors. This vision will only work if they all use a common protocol. Consider what would happen if a road network was being set up for a new country and as part of that process each town could decide which side of the road they would drive on. It could be made to work but it would always be prone to accidents and failures. Looking at the specifications there do not seem to be any overwhelming technical reasons why one is superior to the other. Therefore any long-term schism will be caused by attempts to gain commercial control by promoting one over the other. In the early days of developing a specification for a standard it is important that as many good ideas are investigated as possible and that the process is not over burdened with committee bureaucracy. The trick is to ensure standards are developed before too much capital - emotional, developmental or fiscal - has been spent. If this does not happen the cost is either pain for the consumer or blood on the carpet of the suppliers.

Our view is that we have now reached the inflection point and the market must persuade the two groups to join together. If this does not happen in the next six months then our industry, and in a sense the whole world economy, will be permanently poorer. Vendors who will use this technology, especially the application suite vendors, and all enterprises must lobby Microsoft, IBM and the WS-CAF team to get their act together quickly to develop a single standard. The Oasis meeting on the 31 October would be a good date to aim for.

*New name for offshore outsourcing?* The IT industry has the dubious reputation of taking words with a specifically understood and recognised meaning and using them to describe something entirely different. It is a sector plagued by jargon and obscure language. At minimum it can be confusing to the purchaser or user of technology goods and services. Sometimes it can be misleading. In the case of what is described in the industry jargon as 'offshore outsourcing' the industry has adopted a phrase with tainted connotations. This creates unfavourable perceptions both in the minds of the general public, the recipient of these services and in the mind of prospective buyers of these services. Offshore outsourcing has become a popular route for the financial services sector to reduce its fixed costs, not only of infrastructure but more significantly business processes, which may interact directly with the customers of the financial institution, subject to the outsourcing agreement. This is achieved by transferring the operation of those services via a partner to countries with a substantially lower personnel cost base and less rigid labour structures, rules and regulations, than in Western Europe in particular.

This distinguishes the process from outsourcing of what is now termed 'on shore' outsourcing, words used to describe variously outsourcing of services in the same country or within the US Western Europe. Unfortunately, the word 'offshore' has developed connotations of tax avoidance, lack of transaction and reporting transparency as well as poor or light regulation of the financial services industry.

While 'offshore' outsourcing may lead to job losses, it should not be perceived as a contemporary form of colonial exploitation. The organisations and people who deliver these services are frequently more highly skilled and educated than those who formerly provided the service within the financial institution.

The outsourcing industry would benefit by offering a substantial financial reward for a substitute term to describe 'offshore outsourcing'.

*Openwave and open source*

When you're a mobile user, operating systems don't matter. The more important items on your mind are likely to be usability, style and battery life. So why are there suddenly several important players talking about their plans for mobile open source? Openwave announced the availability of their Phone Suite Version 7 for Linux at a recent conference. V7 for Linux has been validated and works with MontaVista Linux CEE. This operating system includes advanced features applicable to the mobile device space such as dynamic power management, rapid boot time and close integration with the supported hardware platforms.

Openwave's powerful graphics and user experience makes a good combination with the MontaVista Linux. Each allows device manufacturers to innovate and take advantage of improvements in mobile hardware, especially display technology to ensure that the end user experience is compelling. This in turn gives content providers and operators a more receptive audience to target with new revenue generating services.

V7 makes extensive use of XML, so that handset manufacturers can create their own distinct but still consistent user experience, while operators can still tailor to their own styles. In the still immature market of mobile data devices, such variety should be encouraged as user interaction style is just as personal as choice of ringtone. Openwave software is already pretty widespread. With V7, Openwave has widened its software to include file and application management and Real Networks' RealOne mobile player in addition to the existing browser and messaging client. Openwave has a strong high utility approach to mobile client software and providing V7 on Linux will only broaden the appeal to handset manufacturers.

So perhaps now, in addition to Symbian, PalmSource and Microsoft smart phones, there will be more handsets based on Linux? This is good news for the mobile industry. It might increase the challenges for handset manufacturers, content providers and operators as they cope to spread consistency across variety. It might allow the media and analyst industries to speculate on wars of supremacy, as the rivals slug it out.

However, the richer choice should allow those skilled at making mobile devices, handsets, gadgets and gizmos to innovate. Real variety and innovation, beyond raw performance, has been sadly lacking in the personal computer industry for many years, with the valiant exception of Apple, and the occasional slightly rounded, slightly less beige boxes from other vendors. It's still too early in mobile handset market to settle for a default beige box or even a silver slim brick. Only through experimentation and innovation will we arrive at a suitable mix of mobile appliances fit for purposes from business, through personal communications to gaming. In their different ways both Openwave V7 and Linux CEE provide additional opportunities for handset variety.

Bloor Research is a leading independent analyst organisation in Europe. You can find out more at www.bloor-research.com or by emailing mail@bloor-research.com.