Web services is a method of communication between different applications, different platforms and electronic devices over a network that using open protocol like Hypertext Transfer Protocol. It is a software function provided at a network address over the Web with the service always on as in the concept of utility computing.
Many organizations use multiple software systems for management. Different software systems often need to exchange data with each other, and a Web service is a method of communication that allows two software systems to exchange this data over the internet. The software system that requests data is called a service requester, whereas the software system that would process the request and provide the data is called a service provider.
Different software might be built using different programming languages, and hence there is a need for a method of data exchange that doesn’t depend upon a particular programming language. Most types of software can, however, interpret XML tags. Thus, Web services can use XML files for data exchange.
With Web services you can exchange data between different applications and different platforms. Web services can help to solve the interoperability problem by giving different applications a way to link their data.
Web-applications are simply applications that run on the web. These are built around the Web browser standards and can be used by any browser on any platform.