IBM's WebSphere group has announced the planned acquisition of DataPower, a Web services appliance maker. One unusual aspect of this development is the fact that a software group is purchasing a hardware vendor. Appliances from Data Power are largely Web service application-level routers. The company's main piece of intellectual property is an XML processing chip set on which its products rely. With this acquisition, the concept of XML-based Web services combined with networking becomes a more credible strategy. Web services offer a standards-based view of application-level APIs, which allows intermediaries to manage messages between applications. Some industry analysts contend that by 2008, the basis for 80 percent of new software development will be provided by Web services. Web service intermediaries (WSI) will be the driving force for most of that development, and hardware appliances will be a strong component in that strategy because they are thought to be simple to operate. However, configuration of multiple devices in disparate areas of a network can be difficult. Therefore, the synergy of IBM's acquisition is such that IBM can use WebSphere as the integration infrastructure for DataPower devices, thus adding real value to DataPower appliances. Also, DataPower's XML chip set and software could move from appliances toward other form factors, which could widely disperse application-level routing across networks.