Enterprising, but not enterprise.

Peter Rip of Leapfrog ventures has written a great article about the issues creating enterprise standard products using public APIs. Web services are generally released without a SLA (Service Level Agreement) and the terms and conditions basically don't offer very much security to the user regarding uptime and support. Service level problems are already evident in a range of online applications, and occur for a number of reasons. Every Saturday morning Spurl.net goes offline for backup, which might be appropriate for such maintainence in the States, but in the UK its a peak usage time. Even Googles own Gmail service has experienced outages that have desperately upset users, so I don't think there's currently much hope in using Web Services for mission critical applications.

Hopefully this situation will change over time, but the companies who host the APIs need to sort out what kind of revenue model is going to suit them best. Peter highlights that one of the major reasons that Google and Yahoo have not released business models for their web services is that their current model is based on 'direct sales' and not 'indirect sales'. A mashup incorporating the Google API is would be considered by Google to be an indirect sale, so there is no model, and companies like Google can't adopt a new channel strategy overnight.

One route Google could go down would be to move the distinction of the customer up a level from the end user to the developer or company that is using the service. There are also a number of financial models that could be adopted including bandwidth usage, subscription packages or simply pay per hits which could provide a healthy revenue stream for supporting 24/7 uptime for the services.

It's inevitable that the Mashup movement is going to move into an enterprise model and quickly in my opinion. If these first movers don't sort decent SLA's there will be a market opportunity for companies to supply enterprise standard web services to support the mashup movement.

Tags Mashup, Web 2.0, gmail, Peter Rip, Web services, Google, SLA