The Sensor Observation Service (SOS) extension for ArcGIS Server (10.1) is implemented as a 'Server Object Extension' (SOE). It allows querying of observations, metadata about procedures/sensors, as well as descriptions of features (of interest) observed by the sensors.
The SOE's interface provides compliance with the SOS 2.0 standard from OGC as well as the new GeoServices REST API developed by ESRI.
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