Is there a Market for Web Services? - An Analysis of
Web Services Directories
Christine Legner
Institute of Information Management, University of St. Gallen,
Müller-Friedberg-Str. 8, CH-9000 St. Gallen, Switzerland
christine.legner@unisg.ch

Abstract. Web services are expected to foster the creation of networks of spe-
cialists which expose their digital services over the internet for the dynamic dis-
covery of services by other organizations. Given this vision, the question arises
whether and how Web services are traded and how this market is organized.
Based on a longitudinal study of commercial Web services directories, this pa-
per analyzes the market structure, the role of intermediaries and the Web ser-
vices offering. The study suggests that the Web service market faces a rather
slow evolution with a significant shakeout in 2006. More recently, an in-
creasing professionalization can be observed given that commercial Web ser-
vices specialists emerge and Web services directories are relaunched. The paper
draws conclusions on the future market development and discusses analogies to
the newer mashup-oriented service directories.
Keywords: B2B intermediaries, electronic markets, infomediaries, Web
services, Web services directories
1 Introduction
Since the early days of the internet, the emerging technological capabilities have
been expected to revolutionize not only the existing information system landscapes,
but also the interactions between businesses. The falling interaction costs were said to
promote the unbundling of functions and activities within organizations and across
supply chains (Ismail et al., 2002). This eventually results in the creation of networks
of specialists exposing their services over the internet for the dynamic discovery of
services by other organizations, thus leading to a global electronic marketplace.
At the core of this vision are electronic services, more specifically Web services,
which expose reusable application functionality based on open internet standards and
can be easily consumed by other organizations. Pure internet players like Google,
eBay or Amazon have demonstrated how to successfully adopt Web services. They
have strengthened their partner ecosystem by exposing product data and e-commerce
functionality as Web services. Although most industry experts recognize the potential
of Web services (Daniel and White, 2005), the idea of a global Web services direc-
tory, which was considered a key enabler of e-commerce in the dot.com era, seems to

2 Christine Legner
have failed with the shutdown of the Universal Business Registry in 2006. Despite
this disillusionment, the vision of a global Web services market has regained popu-
larity lately due to various factors: First and foremost, large software vendors are re-
architecting their software platforms to reflect the paradigm of a service-oriented
architecture (SOA). These efforts are complemented by the establishment of large
service catalogs, e.g. the IBM SOA Business Catalog or SAP’s Enterprise Services
Repository. Second, mashups are among the most promising Web 2.0 technologies.
They are composite web applications which can be built reusing content from third
parties via a public interface or APIs. Last but not least, a very active research com-
munity is exploring the semantic Web. They argue that it will be much easier to locate
providers of particular services and establish (semi-)automated cooperation with them
if semantics are explicitly added to Web service descriptions (de Bruijn et al., 2005).
Given these latest developments, the interesting question is whether and how Web
services will be traded in the future and how this market will be organized. A
thorough review of the experiences gained with Web services directories seems to be
valuable in order to extract insights and conclusions for the further development of
the global market for Web services. Hence, this paper aims at reviewing the evolving
market structure and commercial Web services offerings over the last 5 years. Based
on a longitudinal study, it aims at answering the following three questions:
• Market structure: Who are the market participants, i.e. buyers, sellers
and intermediaries, and how has the market structure evolved over time?
• Role of intermediaries: What is the role of Web services directories and
registries in match-making and facilitating market transactions? How sus-
tainable is their value proposition?
• Web services offering: What are the characteristics of the Web services
offered in terms of their functionality and granularity? What conclusions
can be drawn related to the market attractiveness for business users?
This paper is organized as follows: The next section motivates our research ap-
proach and reviews related work. Section 3 analyzes the Web services ecosystem and
draws analogies to other electronic markets. Key findings of our longitudinal study
are summarized in sections 4 and 5. While section 4 focuses on the market structure
and the intermediating role of Web services directories, section 5 explores the pro-
vider side and the Web services offerings in more detail. Section 6 summarizes our
conclusions on the evolving market for Web services.
2 Research approach
Since empirical data related to the Web services market and the transaction vol-
umes is not publicly available, our research is explorative in nature. It relies on data
that a team of researchers at the University of St. Gallen, Switzerland, has collected
over the last 5 years. Since 2002, we have been observing the emerging Web services
registries and directories, among them the Universal Business Registry as well as
commercial directories and registries. We analyzed them with regard to their specific
role in bringing together buyers and sellers of commercial Web services. For selected
directories, we periodically analyzed their Web services offering. In order to evaluate