For two years now, Metropolitan Life Insurance Co. has believed that serving customers online had to be at the center of its effort to provide banking, investment services, and financial planning in addition to its core product--life insurance. For the past year, the New York company has targeted Web services as the means to do that.

MetLife faces a problem that plagues many businesses: It doesn't always know if a single customer is doing business with it through multiple channels.

"Our goal is to provide customers with a consolidated view online of all their accounts within MetLife and to be able to execute changes to these accounts online," says George Foulke, VP of IT for MetLife Individual Business, a line of business within the company that provides life insurance and annuities to 10 million households.

Foulke's team is working with IBM Global Services and KPMG Consulting to build Web services atop IBM's WebSphere Application Server and DB2 Universal Database on an IBM pSeries Unix server. Right now, MetLife Individual's financial-services unit is using XML tags to store and link information about its customers' life insurance and investment accounts. That lets customers view their account balances from a password-protected area of MetLife Individual's Web site and change annuity allocations.

By year's end, MetLife Individual plans to extend these Web functions to all its divisions, including GenAmerica Financial, MetLife Investors, MetLife Resources, and New England Financial. That will deliver the much-sought-after single customer view.

"We knew if we could get a customer's entire portfolio online, the customer would view us as a savvy company, the customer's satisfaction goes up when they see results, and the customer doesn't have to have human interaction, so our costs are reduced," Foulke says. It costs just pennies to service a customer via the Internet, as opposed to several dollars when customers speak with a person on the phone.

The use of Web services is growing rapidly. Just over half of companies are using Web services, and another 17% are piloting them, according to Information-Week Research's recent E-Business Agenda survey of 375 IT managers. However, the majority of those are like MetLife, which is using XML but not the additional Soap, UDDI, or WSDL standards. Less than a third of managers report using each of those standards.

The most common uses of Web services so far have been for data-sharing inside companies, as MetLife is doing, where it's much easier to get the agreements and data definitions needed even for an open standard such as XML. Web services won't be widely deployed outside corporate walls for five years, predicts Ted Kempf, a Gartner Dataquest principal analyst. "Web services are an amorphous concept," he says.

Still, the lure of easier integration will keep companies such as MetLife moving forward, says David Sink, program director for IBM emerging technologies, part of IBM's software group. "Companies spend 10% to 30% of their IT budgets on integrating applications and systems internally and with their partners," Sink says. "This is almost like a tax they have to pay each time they create and deploy a new system." It's a tax that MetLife plans to cut.