The E-Business Software Weekly is a series profiling trends and developments in software and applications that support e-business, the Internet, and other electronic communication channels. Look for a new story each week in this space.
Software and The New Internet
The ongoing dot-com implosion, epitomized by the collapse of such one-time Internet poster children as eToys, Pets.com, Garden.com, and Living.com, has called into question the whole premise of the transformative nature of the Internet. And it raises a very pointed question: is the Internet itself on the verge of dying as a tool of commerce?
It might seem so, given the calamitous first quarter of 2001. And the financial bloodbath is far from over. One survey projects that 80% of all Internet companies will cease operations within the next 18 months. In fact, NASDAQ last week warned a record 374 companies--fully 8% of the entire NASDAQ population--that they were on the verge of being removed from the exchange because of their microscopically valued stocks.
Can the demise of the entire Internet be far behind?
An Internet Crossroads
Not likely. The tumult currently underway in dot-commerce merely parallels the crash course between delirium and disillusionment that characterized the introduction of other historically transformational technologies, like electricity, automobiles, and manned flight, before society settled down to the important work of integrating these innovations into the day-to-day fabric of American business and personal life.
It's reasonable to suppose that we're at a similar crossroads with respect to the Internet, that the Internet not only will survive, but will emerge in a new, more practical form--a form in which its role in commerce is likely to be even stronger than it was at the height of Internet euphoria.
Indeed, what the dot-com implosion demonstrates is pointedly not the wholesale failure of the Internet as a tool of commerce--during the 2000 Christmas season, for instance, the soon-to-be-dead eToys actually sold more toys online than any other Internet toy retailer. Rather, the dot-com implosion is primarily a result of the failure of untenable business models and poorly executed strategies. A winnowing of the weak, as it were.
Likewise, the closure of mega-portals backed by such well-heeled sponsors as Disney and NBC proves nothing more than the Internet, as useful as it may be for some forms of content, may not be appropriate for all. Such sites boasted millions of visitors and billions of page views--hardly a "Waterworld" class failure. Unfortunately, they simply cost too much to maintain and failed to generate sufficient advertising revenue.
Transporting Data
The lesson for business executives watching this digital fallout is straightforward: recognize the Internet for what it is. That's easier than it might appear. Dig beneath the blowing sands of Internet history, and you'll soon discover a word that hasn't seen the light of day for, oh, at least two or three years: information superhighway.
Back in those musty, pre-Cambrian days, the Internet wasn't about advertising. It wasn't about content. It wasn't even about commerce. The Internet was a means of rapidly transporting information. The Internet was infrastructure.
It still is.
The concrete superhighways that crisscrossed the American continent beginning in the 1950s--the progenitors of the "information superhighway" concept--proved not to be harbingers of the Utopian, carefree society that fabulists of the time had dreamed of. They were simply a more rapid, more cost-efficient means of transportation, nothing more.
In the same way, the Internet is at its heart a more rapid, more cost-efficient means of transporting data, and that's all. It is no more likely to change the fundamental nature of society than did America's interstate highway system. People won't soon disconnect their TV sets, they won't abandon the shopping malls, and they won't throw away their legal pads. What they will do is increasingly rely on the Internet for those tasks at which it excels: transporting information from anywhere, to anywhere, at near instantaneous speeds.
A Communication Channel
Viewed in this light, the Internet's true nature as an enhancement to existing forms of interaction and communication is readily apparent. It is a technically sophisticated and powerful enhancement, to be sure, but an enhancement nonetheless.
Consider the simple example of the direct-mail catalog. A commerce-enabled Internet storefront accomplishes much the same thing as do print catalogs, but more quickly and cost-efficiently. Yet it is only the presentation and order-entry format that differs between the two communication methods: beyond that, each requires the same products, the same product data, the same fulfillment process, the same quality assurance, and the same customer service.
A similar story applies to almost every other Internet innovation: email, B2B supply chains, auction sites, online video conferencing, and e-learning, to name just a few. Rather than creating revolutionary new business processes, the Internet merely opens up new, more efficient ways of delivering data in support of traditional business processes.
The Internet is, in short, a new, extremely powerful communication channel. As such, it faces the same demands that confront every other corporate communication channel, including such business-critical necessities as accessibility, robustness, and a positive user experience.
The Need for Scalability
This is a benchmark that the information superhighway's concrete brethren increasingly have failed to meet.
When America's interstate highway system was launched, few could have imagined the volume and diversity of traffic it would one day bear. It is a miracle of foresight and engineering that, nearly 50 years later, these superhighways still stand, in nearly the same form as when they were built. Yet the engineers' foresight was far from perfect: many urban freeways today suffer from paralyzing traffic congestion, making them anything but "super."
The concrete superhighways survived, but they didn't scale.
The calamity awaiting the Internet isn't the continuing pruning of unprofitable dot-companies or unsustainable business models. The great fear should be an Internet that doesn't scale, one that becomes as overwhelmed by data as urban freeways are today by vehicular traffic. The danger is that The New Internet will not long be able to do the one thing that, at its essence, it must do: deliver data from one point to another securely, reliably, instantaneously.
A Premium on Powerful Software
Increased physical bandwidth, like additional road-miles, will be part of the answer to the challenges described above. But the resiliency of the Internet as a communication system--its ability to deliver data from anywhere, to anywhere, at near instantaneous speeds--will depend even more on the power, the flexibility, and the scalability of the software that routes the traffic along its seemingly infinite branches.
That software comes in many forms, and serves many specific missions. It will be the task of this column to highlight the most important of these emerging software technologies, focusing not so much on the technical details of how they work, but on the day-to-day business rationale for why they will be an important, even essential part of The New Internet.
Robert Hopkins is a California-based business consultant specializing in e-business software and Internet technologies. He is the author of several articles and monographs on e-customer relations, including "Making Customer Relationship Management Work," published in 2000. He has advised some of the world's leading technology and financial services companies, including American Express, AT&T, BroadVision, Citigroup, IBM, Intel, Siebel Systems, Sun Microsystems, Texas Instruments, and Toshiba.
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