Web services are the future of computing - or so the leading IT companies are telling us. But given the bald definition of web services as the use of internet-based standards to integrate computer systems, it is hard to see why even an industry as steeped in hype as IT is making such a claim.

Standards, however, do have the power to transform. Consider how the introduction of a standardised machine (the IBM PC) and operating system (Dos) led the PC to become the mainstream computing tool. Or more recently, how the arrival of HTML (hypertext mark-up language) fostered the creation of more than 30m web sites between 1995 and 1997, transforming the internet from an academic network to a ubiquitous communications channel for business, government and individuals.

The arrival of web services built on XML-based (extensible mark-up language) standards will unleash the next phase in the development of the internet, moving on from static web pages to enabling machine-to-machine interactions.

For some, the power of web services to transform IT is analogous to the arrival of the standard gauge railway, for others it is similar to the move from telephone networks where every call had to be connected by a human operator, to systems that made automatic connections; others liken the changes to having an electricity grid with standard plugs delivering electricity in metered units.

Whichever analogy you choose, the same point is implicit - web services will transform IT from a technology and product-driven industry to a services industry where computing power is a utility.

It is curious that although it claims web services will transform computing, for once in its life the IT industry is not talking of revolution, but evolution.

In part this is recognition that most customers have had their fill of expensive big bang IT projects such as ERP (enterprise resource planning), CRM (customer relationship management), and all flavours of dotcom-style transformation. But it is also because to win the benefits of web services they must be applied layer by layer.

First, by providing a common language for applications to speak to each other, the arrival of these standards will make it much cheaper and easier to integrate systems internally. Then it will do the same for external links with business partners.

Initially, these will be fixed links with existing partners, but as the standards (particularly those relating to security and authentication) and supporting networks evolve, web services will enable dynamic interactions with any number of partners, known or unknown.

At the same time, says Simon Witts, vice president for Europe at Microsoft, web services standards will provide a new way to build software "that can run across a network, not just sit on a PC". This will reduce the cost of writing and maintaining software applications because it will allow software developers to build applications out of re-useable software components. These could be from different business units within an enterprise, or sourced from third parties who will advertise their components in internet directories.

Web services will also resurrect the application service provider (ASP) model of delivering software as a service over the internet. Fergus Gloster, vice president of marketing of the ASP salesforce.com, says: "To us web services is great news. Using web services standards there will be dramatic cost reductions in delivering ASP services. And now, if customers want to integrate our service into their back office systems or other ASP services, it will be easier."

In effect, the deployment of web services will turn the internet from a network for communicating information, into a platform for running applications, and thus implies the internet will need a far more robust, integrated and secure network architecture.

Ron Grevink, European market manager of WRQ, an integration specialist, says the first stage of the web services evolution, creating the standards and providing the software development tools to create web services is the easy part. "The second part, creating a service-oriented architecture is much more difficult."

CJ Stumpf, chief technical officer of Cable and Wireless, agrees that one of the biggest gaps is in the internet infrastructure. "Because they will allow companies to tie applications together across enormous physical distances, web services will create a new network performance problem. The performance and reliability of web services will depend on the internet infrastructure becoming better."

The standards at the heart of web services - WSDL (web services definition language) for defining the interface to a web service, Soap (simple object access protocol) defining how information is transmitted, and UDDI (universal description, discovery and integration) for creating directories of web services - are still under development, but there is general agreement that they are becoming usable. Leading vendors, including IBM, Sun, Microsoft, BEA Systems and others, have launched software development tool kits that comply with the standards.

Adrian Keward, UK technical director of Sun Microsystems believes software developers have "clicked with web services" and he expects applications based on the standards to start arriving in the coming months. "You can look at it and play with it today and deploy test services. There is technology out there but I wouldn't run a business on it yet."

One distinctive element of the push towards standards is the exceptional degree of co-operation between the main industry players, and most notably between IBM and Microsoft. This is exemplified in the Web Services Interoperability Organisation, a body set up by IBM and Microsoft in February this year, not to set standards, but rather to test that each company's interpretations of the standards do, in fact, interoperate.

More than 50 companies, including all the leading IT vendors, and main users - including the publishers Reed Elsevier, Ford, Reuters and United Airlines - are members. However, there is one notable absence in the organisation - Sun Microsystems. Despite being the creator of Java, the basis of most vendors' web services tool kits, Sun was not invited to be a founder member.

Another discordant note is the split between Microsoft and the rest of the industry over Microsoft's Passport technology for authenticating individuals over the net. Fearing this would give Microsoft a dominant position, Sun led the formation of the Liberty Alliance to create a competitor technology.

Jack Messman, chief executive of Novell, the networks and services company, acknowledges there is disquiet over who controls authentication technology. "The whole issue of identity on the internet is going to be crucial, and the aim of the Liberty Alliance is to create standards in this area to ensure you can interoperate. There is a lot of fear about the Microsoft approach with Passport," he says.

Despite this, Mr Messman believes the computer industry's commitment to creating standards for web services should be taken seriously. "Standards are the key to the future of the internet. For the first time, many companies, including our own, have realised there are other ways to compete."

Mr Grevink concurs. "This is exactly what makes it so promising. All the big vendors agree. From that angle, we are in an excellent position with all web services offerings built around the same standards."

But he and many others in the industry agree that for now the standards, especially those relating to security, are not mature enough. However, he adds: "Companies can start applying them internally behind the firewall, using this year as a learning year."

Surprisingly, vendors also advocate this softly, softly approach. Kevin Malone, a software consultant at IBM, emphasises the contribution that web services will make to internal integration. "Initially, web services will provide a clean interface to get at back-end processes. This is not rip-and-replace - IBM will use web services to make what you've got today work better."

Barry Morris, chief executive of Iona Technologies, one of the leading companies in the enterprise integration market agrees. "There is a huge economic problem out there that it is too expensive to integrate systems," he says. "Now web services will bring integration within the reach of the majority of organisations."

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