If it's true that everything old is new again, then Web services is an old concept indeed. It all boils down to connections, and Web services simply represent a new way of helping different computers talk to each other.
There is something that does make it new, however. Before Web services, inter-computer communications required a specific "bridge" between System A and System B if you wanted your customer, say, to be able to check on the status of an order. There was no standard or easy way to do that; every vendor's software was different and needed separate and unique hooks to whatever other system it needed to communicate with. Doing this took lots of time and cost lots of money.
Web services are all about doing an end-run around those differences with standard ways of helping systems communicate. In Web services jargon, one simply "wrappers" or "encapsulates" both sides of any would-be computer connection with new code or object that's understood by both ends of the equation. System A then recognizes System B as one of its own, and then they can talk. It's kind of like everyone putting on the same color jersey for a pick-up basketball game -- no matter what they may have on underneath -- so all the players know which team they're on.
Of course, it's not quite that easy, and there are lots of challenges. For one, there's an alphabet soup of acronyms, including SOAP, UDDI, WSDL and XML. One is the "wrapper" used to surround the existing application, another is the language used to create the wrapper or to address the "envelop" that the wrapper travels around in, another is used to make sure the wrapper identifies itself correctly to other Web services.
Then, too, creating and testing Web services can result in logistics nightmares. Application builders don't always know ahead of time which Web services they need for their software, and where and how these external services were created in turn. That's why security is such an issue and so is the impact on the network of all these services running around, grabbing data from other external systems and bringing it back.
For now at least, the actual creation of Web services is relegated to specialists and large businesses. It's only a matter of time before the whole deal becomes easier. Microsoft, among others, vows that it's working on software tools that make creating Web services as easy as dragging a computer icon across the screen.