XML provides a neutral, flexible way of exchanging data among different systems, applications, and organizations. With XML, data is maintained in an extensible self-describing format to accommodate ever-evolving business needs. XML documents use tags to describe the data values they contain, and the nesting of tags to express hierarchical relationships between the data items. XML can describe very structured data and enforce the structure through XML schemas, but can also describe semi-structured data which is prevalent in content-oriented applications.

Service oriented architectures (SOA), enterprise application integration (EAI), enterprise information integration (EII), Web services, the enterprise message bus (ESB), and standardization efforts in many industries all rely on XML as an underlying technology for data exchange.

Organizations as well as entire industries have standardized XML schemas to promote exchange of data and are evolving those schemas to meet changing business needs. These efforts include ACORD in the insurance industry, FpML® and FIXML in the financial industry, RosettaNet in supply chain management, ARTS in the retail business, HL7 in healthcare, XBRL for business reporting, and DITA for authoring, managing, and publishing documentation in print and on the Web.

Such industry-specific initiatives, as well as regulatory requirements, are driving the deployment of XML. As more business transactions are conducted through Web-based interfaces and electronic forms, government agencies and commercial enterprises bear greater responsibility for preserving the original order, request, claim, trade, or submission. XML provides a straightforward means of capturing and maintaining the data associated with these electronic transactions. Indeed, XML documents frequently represent transaction records in message-based transaction processing systems.