Without a doubt, 2001 is a rebuilding year. The market is down, especially the tech stocks. The dot-coms that were leading the charge are now the dot bombs that we're all trying to distance ourselves from. So it might be easy to conclude that the Internet revolution is over, and the bad guys won. But that would be naïve, and more than a little premature.

While we're definitely experiencing a market correction, and feeling the pain of all those NetMarkets that had more chutzpah than marketing savvy, there's still a strong drive within business to move towards a collaborative environment. As the market moves slowly but inexorably towards a more cooperative model, the fits and starts that go along with that move are nothing more than the growing pains of an economy that needs to become global in order to achieve additional growth.

In one sense, Web Services is in its infancy. It's an infant because the Internet revolution and the dot-com craze showed us that there is value to be had in coopetition. The problem is, it's extremely difficult to determine an operating model that accommodates the idea of cooperation and competition while still providing strong leadership.

And leadership is critical for this next stage of business growth. Technology provides the underpinnings, the support structure if you will, for business growth. But as the Internet has laid bare the true nature of industry economies, it has become imperative that businesses adapt their operating models in order to grow.

The Stagnation Effect
Part of the dot-com fallout has been a reevaluation of the market. It's become clear to the majority that exchanges, while useful, are not the be-all and end-all of the actual market. Nor is the ability to market product online (in a business-to-business context) so compelling that companies are willing to completely change the way they do business.

Many of these businesses have good reason to continue their current patterns. While compelling from a marketing standpoint, neutral exchanges suffered from several fatal flaws. Neutrality also led to a lack of cooperation from the major industry players. While neutrality is a laudable goal, the liquidity of the market actually drives much more value than any neutral exchange can.

Commoditization is another myth within the exchange industry. The reality of the market is that any true commodity would have already achieved a neutral exchange years ago. To the outsider, steel is steel, and benzene is benzene. But to industry insiders, those who truly know the workings of the industry, these are not commodities but distinct, individual products, with specifications and tolerances that make it very difficult to compare them as apples to apples.

It's precisely the collapse of the dot coms, coupled with the failures of exchanges, that has led to stagnation in the industry. And yet now is precisely the time when a new paradigm is rising from the ashes of dot carnage - witness the arrival of Web Services.

Companies can't go back to doing business in the "traditional" ways. For better or worse the dot com revolution has forever altered the landscape and playing field of the market as we know it. We cooperate with people we compete with. We're willing to participate in online markets, as long as there's a perceived gain. The business rules of today aren't carved in stone - we're lucky if they actually get written to disk before they change. The corporations that can handle this environment will thrive; the others will wish they had adapted.

The driving force behind handling that kind of rapid change will be Web Services. We're at the forefront of the revolution now - and in the coming months we'll be seeing how different companies, some vendors, some start-ups, some Fortune 500 are creating the landscape of the Web Services world.

Web Services will be a critical component in the business plans of all corporations, because it provides a means of addressing some of the basic problems of the industry - communication and cooperation, at a level business people can understand. Assuredly, there will be technology involved, but the real value that Web Services will bring is the ability to unite companies in commerce transactions at the business process level. The work that's been done over the past few years within the open standards community to build systems capable of interoperating will now be leveraged to build ecosystems uniting supply chains across industries. The dot-com is dead. Welcome to the Web Services Era.