Its a very loaded question but in a sentence or two if you want to connct another application with your application.
Simple examples are you need to Submit an order to another company site that exposes a webserive to do that.
A weather information from weathr site.
Within an organization you might have AS400 Enterprise application like PayRoll, Inventory, Factory etc and you need to get an important piece of information or move the information around these application. These all can be done much easier then before using WebServices. and how about Credit Card verification webservice ...:)
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