XML is here to stay: Page 2

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Three key areas of XML

One of XML's primary uses is as the "glue" to integrate applications, as GM is doing, says Joshua Walker, an analyst at Forrester Research Inc. in Cambridge, Mass. This is true not only for individual companies but also for entire industries. Wall Street, for example, is looking to XML as a way to simplify electronic communication among brokerage houses, banks, and other financial institutions.

Brokerage houses currently use a confusing collection of standards for real-time electronic stock trading, according to John Goeller, vice president of external connectivity at Solomon Smith Barney Inc. in New York City. Goeller is also chair of the FIXML working group, which is seeking to supplant an existing standard for stock trading called FIX (Financial Information eXchange) with XML.

BML (Bean Markup Language): Access and configuration of JavaBeans

CML (Chemical Markup Language): Allows the graphical rendering of the molecular structure of chemical compounds

FIXML (Financial Information eXchange): Markup language for real-time electronic stock trading

ICE (Internet Content Exchange): An effort led by Vignette Inc. to help establish rules like expiration dates and royalty payments for firms syndicating content across the Web

MathML (Mathematical Markup Language): A markup language designed to present mathematical equations on the Web

MusicML (Music Markup Language): Allows for the publication of sheet music on the Web

OFX (Open Financial Exchange): Internet-based exchange of financial data between financial institutions, businesses, and consumers

RosettaNet: Markup language for e-commerce in the PC industry

SMIL (Synchronized Multimedia Integration Language):Allows synchronization and integration of multimedia sources into Web-based multimedia presentations

VoxML (Voice Recognition ML): A proposal by AT&T, Lucent, and Motorola to standardize the way Web content is accessed by voice recognition software

WIDL(Web Interface Definition Language): Meta language to implement service-based architecture over document-based Web resources

WML (Wireless Markup Language): Providing wireless Internet access from handheld devices

Sources: Zona Research Inc., Forrester Research Inc., and Datamation

Because a single stock trade may involve several different electronic protocols, says Goeller, "having one common message format from start to finish leaves much less room for error." With Wall Street pushing toward stock trading that is electronic from end-to-end, XML is seen--like it is at General Motors--as the common glue that will allow brokerages to unite the differing standards. Other proposed standards aim to harness XML in different parts of the financial industry. J.P. Morgan & Co. Inc. and PricewaterhouseCoopers, for example, recently proposed an XML dictionary called FpML (Financial products Markup Language), which would standardize XML tags in areas such as fixed income derivatives and foreign currency exchange.

XML also promises to bring simplicity and speed to electronic content. As more information on the Web--and on corporate intranets--is labeled with XML tags, searching for specific data will become easier. And XML offers capabilities that go far beyond those of its first-generation cousin HTML. A proposed XML standard called Xlink, for example, will bring greatly enhanced capabilities to hyperlinks. Among other things, clicking on an Xlink hyperlink will let you choose from a list of possible destinations instead of taking you directly to another Web page, as HTML links do.

The third area where XML will see heavy use--and one of the places where it is catching on most rapidly--is in electronic commerce. Vendors such as Ariba Technologies Inc., Commerce One Inc., and Concur Technologies Inc., and others are already using XML to simplify the process of matching up RFPs and purchase orders over the Web. The boom in business-to-business e-commerce has fueled the rush to XML. On-line trade among U.S. businesses will explode in the next few years, from $48 billion in 1998 to $1.3 trillion in 2003, according to Forrester estimates.

The end of EDI?

In the e-commerce arena, XML's attraction is that it's both simpler and cheaper than traditional electronic data interchange (EDI). Implementing traditional EDI can be daunting for smaller companies, says Marcus Schmidt, Microsoft Corp.'s industry manager for supply chain and manufacturing. That's because existing EDI specifications offer so many options that setting up an electronic commerce arrangement involves lots of work--you must match the data structures at your organization to the fields your supplier or customer uses. So EDI has been generally limited to purchasing arrangements among larger companies that can afford the custom programming.

"EDI is expensive and unwieldy, so it's only been used where there is a long-term relationship," says Bob Glushko, director of external standards at Commerce One, located in Walnut Creek, Calif. "That has kept people from trying new business models. XML reduces the cost of experimenting with new suppliers, so all of a sudden, you're free to create ad-hoc, short-term relationships with suppliers."

That model is well suited to building an online virtual company around one event or a specific shopping season. "Suppose you want to put together an online store for the holiday season. If you can easily plug a catalog into a particular marketplace, that's worth doing," says Glushko. "But if it takes you six months to build it with EDI, what's the point?"

XML promises big changes in the relationships between companies and their customers, going far beyond the exchange of purchasing and inventory data in traditional EDI. At Dun & Bradstreet Corp., in Murray Hill, N.J., for example, XML is one of the cornerstones of a new computing architecture that aims to "embed Dun & Bradstreet in our customers' processes," says Laura Keating, manager of D&B's XML project.

"Suppose you want to put together an online store for the holiday season. If you can easily plug a catalog into a particular marketplace, that's worth doing. But if it takes you six months to build it with EDI, what's the point?"
One of the world's largest credit rating agencies, D&B's business is selling information to other businesses. Traditionally, D&B has done that by selling reports, which customers use to evaluate their customers' creditworthiness. Reports may be easy to read by people, Keating says, but it's not how computers deal with data. A customer who wants to automate the credit check process doesn't want to have to break a prepackaged report apart to get the relevant information. So in Feb. 1999, D&B began offering its customers XML-tagged data over the Internet, which they can feed directly into their applications. One D&B customer, an insurance company that sells policies to corporations over the Internet, is using the XML data to run automated credit checks before it agrees to offer a policy to a customer. "If we want to be part of our customers' systems," says Keating, "we have to deliver the data so they can put it directly into their applications."

A common language and its risks

Regardless of whether they're exchanging credit information, purchase orders, or anything else, before two companies can share data, they have to agree on a common language. One of XML's main advantages is that it provides a simple way to do this. XML stores the definitions of tags relating to specific industries in files called Document Type Definitions (DTDs). The files--often referred to as dictionaries, vocabularies, or schemas--serve as a uniform source of data definitions, so organizations don't have to match up their data every time they want to do business.

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