When calling localhost/.../SOAP from an external development piece is the time out for the call controlled/set in the calling app or in the webservice/SOAP or CRM ?

App -> SOAP/Webservice -> CRM 

The reason being this message is recorded sometimes :
System.TimeoutException: The HTTP request to 'localhost/.../SOAP' has exceeded the allotted timeout of 00:01:00. The time allotted to this operation may have been a portion of a longer timeout.