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Use of XML ?

Hi all

I'm involved in a project to exchange data between two seperate
databases ...... and, in an attempt to use XML for data exchange we
developed a schema, and parsed the data into XML before transporting it
over to the receiving system - which in turn 'deparsed' the data into
its own format.

Whilst we were developing the system we came to the startling
realisation that everything we were doing via XML could actually be done
by simply making each side aware of the 'class' (using Java) of the
object that the data is read into - in the same way that both sides
would need to be aware of the schema. So rather than transporting the
XML doc we could just send that object.

We know we must be missing some fundamental point here - but if someone
could just help by explaining why XML is so important as a data exchange
format it would be very appreciated

Many Thanks