Scalability goes both ways
XML may actually be more suitable for smaller projects
Structured information is useful in many many many fields
While the press is all excited about creating master vocabularies for large organizations and groups of organizations, XML's power may be just as applicable (and certainly easy to use) in a wide variety of smaller situations.
Connecting different kinds of systems
Because XML is basically a text format that can be processed in a wide variety of different environments, it makes it easy to connect systems of different types. Once those systems are connected, it's still easy to add new and different systems to the mix without having to rebuild the format entirely.
Smaller tools for small projects
I won't claim that XML-RPC is scalable, but it's tiny, lightweight, easy to use, and connects systems of various types. Other XML processes are more scalable - and with repositories and caching, the speed limit seems to be pretty high - but building low-cost solutions to small problems is easy.
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