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The paper proposes ξ-calculus, a formalism for describing interactions in Service Oriented Architectures. The calculus treats interactions between services as a core concept to capture important architectural characteristics of the system. The focus of ξ-calculus is on the higher level abstraction rather than on the lower level details like parameter passing, use of stacks, closures etc. And hence it can be used to specify, study, and compare different service oriented systems from an architectural point of view. The paper also introduces a notion of interaction types suitable for the level of abstraction under consideration. These types are used to describe the type system of the calculus. The paper introduces a notion of design time non-functional capabilities and also present the application of the calculus in a real business scenario.