Customer response has been great. With little fanfare to announce that the portal was open for business in early June, Central Carolina Bank signed up an average of 200 users a day in the first few weeks. "The goal was to create the same high-touch effect that we have with our branches," says Howard Brooks, senior VP of Internet banking. "It's hard to create customer intimacy through the PC."

Behind the scenes at Central Carolina Bank's Web site, XML is translating different enterprise applications so they all understand one another and so that transactions such as ordering new checks go smoothly. "You need to get some agreement between programs about a customer. What constitutes a sale? What is a [banking] product?" says Jonathan Rich, director of enabling technologies at C-Bridge. XML provides the answers.

Of course, XML is still catching on. Despite the fact that version 1.0 of the spec was published in early 1998, it has taken time for business developers to design a prototype and deploy systems built with XML interfaces. Simon Tze, CIO of AT&T data and Internet services in Bridgewater, N.J., says his organization built an application two years ago to support internal salespeople as well as about 1,600 external contract sales representatives before XML had solidified as a standard, so developers wrote custom code to support communications among the various applications.

However, a new XML-based system that will let salespeople configure options for customers of AT&T's Internet hosting services is in the prototype stage and will go live late this year. "We need to connect to other systems, such as ongoing customer support, order status, network performance, billing," Tze says. "As functions expand, we'll just plug and play with that." Without the XML option, Tze would have to go back to individual and proprietary interfaces "and that's not scalable," he says.

The point of XML is not to rewrite existing legacy code but to put XML-parsing front ends on older applications so they can communicate easily with XML applications. The older systems are proprietary by definition and need custom-written data interfaces between them to assure that they're speaking the same language. If something changes or a new application is added, code needs to be written to accommodate it. By contrast, any application that can handle XML can get all the information it needs to understand an XML message from within the message itself.

Tze is not alone in adopting XML for new applications. "There's a lot of interest in XML, and large companies are getting started with it in a pilot manner," says Peter O'Kelly, a senior analyst at the Patricia Seybold Group. "I don't think people are going to rip out existing applications, but there's a network effect to it--just like the early days with browsers where one thing builds on another."

For all of its benefits, XML is only one piece of the puzzle, and sometimes unexpected issues--such as network bandwidth resources--determine whether a business customer will use XML. German computer and telecommunications company Siemens AG put in a global knowledge base to support its 6,900 salespeople around the world last year, and though XML was preferred, the company opted against it. The reason: Network bandwidth in many of the 160 countries where the company has offices is still so abysmal that the performance hit created by the extra time to encode and decode XML messages would have diminished the effectiveness of the application.

The company tried to build the system in Java and XML but found that there were "performance gaps with the speed and reliability of the system," says Joachim Doering, VP of business transformation with Siemens' information and communications networks group. The performance drain on top of snail-like download speeds--as slow as 14.4 Kbps in many countries--forced Siemens to approach the system with a less standards-based solution.

"When you have performance problems because connections aren't good, users aren't going to use it," says Karen Czuchry, transmission manager for the system. Instead, Doering's group implemented the system using technology from ArsDigita Corp. ArsDigita's Community System extracts data from a back-end Oracle database and renders it as Web pages on the fly. Siemens uses it to provide a wide range of up-to-the-minute sales information that can be searched using agents or search engines.

While ArsDigita's software is fully XML-compliant, Siemens opted for better performance and didn't use those capabilities. As bandwidth improves worldwide and there's more demand for linking the knowledge base--known as ShareNet--to other systems, XML will get another look, Czuchry says.

And in applications where performance isn't so constrained, XML is clearly taking off. Says J.P. Morgan's Lynn, "We've found that the time to parse and convert [the XML-based] FpML is relatively small, so it's not a bottleneck." For Lynn, XML is the way to go.

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