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The cost of Web Services as a Platform?

Tim O’Reilly is definitely one guy moving the fast lane. For awhile now he’s been covering how websites such as and eBay are beginning to look more like an application rather than just a site that lets you buy books or sell stuff online. They offer many other services on top of their base services which you can access via many Web Services APIs and blah blah blah.

You can find more of Tim’s writing on this here and here.

In many ways Tim is quite right about this becoming a paradigm shift. However, one has to wonder if this is eventual and how will the players turn out? To create a web services as an application first of all you need to be able to AFFORD to keep running your service. This requires lots of other ancillary-seeming things such as a web server, an application framework to hold all of yotur web services, an Internet connection, power, machines to run all of these thiings. And MOST importantly, data of some sort.

This in my opinion puts out a lot of smaller players from being able to consistently compete in this web services as an application game. The costs will eventually bleed you to death on those side parts and large companies are easily able to throw money to provide many of those other parts. And providing the web service isn’t necessarily going to get you money unless you charge for it. But then you need to offer a service people are WILLING to pay for and at the current moment many of these services as applications are dirt cheap to outright free. That doesn’t leave great margins for competing unless you have another core business that you can make money on to fund your ventures into this new territory. Obviouslly O’Reilly Associates doesn’t ahve to worry about this from the business point. They make money on books. So does Amazon.

So I ask… where does the small guy fit into this? I don’t see it. If you’re a small business you’re scraping buy and staying lean and hungry most of the time unless you’re in the growing phase. But that’s a different story.

If you’re a small business and you DON’T have core competencies in building these web services as an application paradigm I seriously doubt you’ll be able to afford:

  • The system builders to buidl you a system
  • The programmers involved to program the customizations for the system
  • The maintainers to maintain whatever you’ve built and keep it tracked to your core competency very well

Prove me wrong here. Sure, Open Source tools are free and the aspiring person can just d/l it and try getting started. But once you hit that thorn you’re so screwed because every minute you’re spending trying to fiddle with getting a system built into place you’re losing time on your business unless you’re willing to lose sleep which will affect your bottom line eventually.

For now I only see web services as an application for the bigger players or people with enough money to just throw around

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