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I-commerce changes everything

  • April 1, 1998
  • By Cheryl Ball
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Internet commerce is fostering a fundamental shift in the structure of business. Now that security is less of a concern to many business users, Internet commerce is being viewed as a means to deliver new business potential by:

  • Expanding markets globally;

  • Creating new markets and industry communities of interest;

  • Creating unprecedented relationships between buyers and sellers, bringing them closer at a lower cost; and

  • Assisting businesses and consumers in making more informed buying decisions in addition to executing purchases more rapidly. To deliver on that potential, businesses spent $2.7 billion in 1997 on equipment, software, and services to develop and deploy Internet commerce capabilities, according to estimates by the Business Research Group (BRG) market research and consulting firm of Newton, Mass.


    BRG forecasts that Internet commerce technology and services spending will balloon to $148 billion by 2001, as Internet commerce penetrates mainstream businesses and as those businesses and their service providers build the infrastructure to support surging transaction volumes.

    In 1997, Internet commerce "true believers" were pioneers, visionaries seeking to create new market opportunities. This year, though, Internet commerce will expand beyond the true believers like Dell Computer of Austin, Texas, and Amazon.com of Seattle.

    The publishing industry is at the forefront of this second wave, since the traditional print-advertising-driven business model is most immediately threatened by Internet publishing. BRG research found that 64% of publishers using the Web plan to implement Internet commerce rapidly, compared to 37% of businesses in other industries. The entertainment, manufacturing, and finance industries are expected to climb the Internet commerce adoption curve quickly, beginning this year.

    For the IT professional, the profound business implications of Internet commerce present unparalleled challenges and opportunities. While the role of the IT professional has been evolving to require a higher degree of understanding of, and involvement in, the business, Internet commerce takes this evolution to a new level, for two key reasons:


    1. Business models for Internet commerce are a new frontier. They are distinct for each industry and may even be distinct for businesses within an industry. And they are rapidly changing. The ability of the vice president of sales, marketing, or new media to set long-term business goals in this rapidly changing environment is diminished.

    2. The technology and standards to enable Internet commerce, marketing, and advertising--from transactional standards to security procedures to digital coupons to micropayments--are also only just emerging and are rapidly changing.

    Furthermore, there's a subtle benefit in all this for IT professionals. The new business generated by Internet commerce enables businesses to pay more for the IT professionals who directly help them make money. //

    Cheryl Ball is senior director of Internet commerce research at Business Research Group, a market research and consulting firm in Newton, Mass. She can be reached at ball@brg.cahners.com.








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