BT expands IT services play with AmberPoint deal

Continuing a push to grow its IT services business, British Telecommunications PLC (BT) has licensed software from AmberPoint Inc. to offer a service that’s supposed to help corporations manage Web services deployed internally at their companies, BT announced Wednesday.

Web services use standard technologies such as simple object access protocol (SOAP) and Extensible Markup Language (XML) to link different types of enterprise applications together, with the goal of automating business processes in a way that is more affordable and flexible than using proprietary integration technologies.

Close to one-fifth of businesses have started to deploy Web services, BT officials said, citing research from IDC. One of the biggest headaches for them is monitoring and managing those services after they are deployed, said Simon Walker, a manager with BT’s global services division.

“The problems you run into are how to implement common standards and policies across the infrastructure. How do you provide and revoke Web services in a common way, how do you provide security, how do you report and log events, and so on,” he said.

The software BT licensed from AmberPoint, in Oakland, Calif., is supposed to solve those problems. It allows businesses to apply policies to their Web services, such as authentication and message logging, and is also supposed to make it easier for customers to update applications already deployed without “breaking” their Web service capabilities.

AmberPoint’s software can also set priorities on transactions, so if performance of an important application lags, resources can be transferred from other applications. BT will deploy the software on proxy servers at customer premises, and its service staff will track and manage the Web services from its central office, Walker said.

The service is supposed to complement an offering rolled out earlier in the year through a licensing deal with Flamenco Networks Inc., extending what BT calls its Web Services Management Layer. While the Flamenco service helps customers manage Web services that reach outside their corporate firewall, the AmberPoint service is for managing internal Web services, Walker said.

However, one analyst was surprised that BT had to turn to another partner.

“I suppose it sounds good for AmberPoint, but it’s a little bit surprising that BT has had to go to a different vendor to get all the functionality they need,” said Rob Hailstone, a London-based research director with IDC.

“I think the reason Flamenco was chosen is that it’s a good architecture to deploy as a hosted service, and in the original model, BT wasn’t running the management software themselves, they were having it hosted by Flamenco. It seems that, probably in light of earlier experiences, they’ve decided to rethink that,” he said.

BT’s Walker said the company will mix and match the Flamenco and AmberPoint offerings depending on the needs of its customers.

“We selected them based on what we consider to be their respective areas of expertise,” he said.

BT faces competition from more established IT services providers such as IBM Corp. and Hewlett-Packard Co., Walker acknowledged. But he argued that the telecommunication company is successfully repositioning itself as a trusted IT service provider.

“We’re trying to move up the value chain – aren’t we all. But rather than go in as a software play, we’re playing on our core competence and going in as a managed services play. Management (of Web services) sits logically close to the network,” he argued.

BT approaches Web services management from a different angle to its competitors in the sense that it owns some of the network over which the services are delivered, IDC’s Hailstone agreed.

Web services are “the way that applications are likely to be built increasingly in the future,” he said. “It takes away a lot of the interoperability problems. The downside is it that it raises a new load of management concerns, and that’s the problem this service is out to solve.”

Success for BT depends largely on timing, Hailstone said. Rolling the service out too early would give BT’s rivals time to copy what the company is offering. Rolling it out too late would give others time to step in and gain the early momentum.

“An awful lot depends on the market coming out of stagnation in the latter half of this year,” he said.

BT is still ironing out details of how it will price and package the AmberPoint service. It hopes to start rolling it out for customers in Europe, which will be its initial focus area, in about three months, Walker said. It will likely be offered at no extra charge for customers with broader IT service agreements with BT, and also be sold on a standalone basis for other businesses, he said.

BT claimed to have secured some customers already for its Flamenco-based service, although it wasn’t ready yet to discuss them publicly.

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