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Monday, June 25, 2007

Is there any such thing as an Internet business

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B2B Article

Is there any such thing as an Internet business?

By Alex Gogan, Future Business

Is there really any such thing as “an Internet business”? Personally, I doubt it. Wonderful WAP and stock exchange prices on your mobile phone as you DART to your desk in the IFSC? Hardly. Ticker tape did the same job two generations ago and for some years now you could have the same service rather more legibly on a pager. Ah, you say – what about online gaming? Multiple players having at each other in real time in the latest version of Quake or BattleZone or whatever? Closer, definitely, but they could do the same thing in an arcade, meet new people, contribute to Coca Cola’s profits – and all without investing in go-faster PCs and fast Internet connection.

What about software downloads, automatic upgrading and so on? Still only close. A CD in the post may be a bit slower to arrive but it’s certainly a more reliable way to install software. But wait: now we have Application Service Providers (ASPs) and surely that’s a true Internet business if ever there was one? Well, I dunno. If you think about it, it’s really just oldfashioned remote LAN access except that it’s somebody else’s LAN.

I am, of course, assuming that you agree that consumer e-commerce is just mail order writ electronically. Amazon sell books and music for home delivery. Big deal. As for online ticket buying and reservations – is it any better than phone with credit card in hand? (OK, I’ll be a little swayed by reminders of “Your call is in a queue… please continue to hold and listen to our low-fi music until the next available agent who hasn’t left us for a really exciting job in a bank picks up your call”)

The point I make so laboriously is, of course, that almost all of the time we are talking about the Internet as a delivery and communications channel. It is revolutionary, the Web has unified the world in a way we could hardly have conceived a decade ago and there are thousands if not millions of new business opportunities. But the pace and excitement of it all has perhaps blinded us to what it’s all about. What’s it for?

There are new business models but not really new businesses. I want the latest price of CRH or Baltimore, I want the new Beatles compilation or an upgrade (patch?) for my Office application or a ticket to the Corrs. Being a spoiled brat of a customer, I’m impressed by the technology for only a short while before I get bored and take my fickle custom elsewhere because your damned Web site kept me waiting for nearly two minutes. Tomorrow, 30 seconds.

As mass broadband Internet access rolls inexorably out to the market, with NTL and Chorus offering up to a splendid 512k to any home user and the business market getting 1.5mbps or even 2mbps for about the price of a simple leased line in the old days (a couple of years ago), our entire society is being digitally transformed. The CRM gurus will have a field day, measuring and monitoring response times in milliseconds and attempting to enrich our understanding of customer behaviour.

For my part, I think it’s ridiculously simple. Consumers and business customers will get used to and demand an ever-escalating standard of service. There will be plenty of room for businesses old and new to elbow the competition aside with new differentiating service features. The clichés about individualization and ‘a market of one’ already apply. There will be masses of opportunities for e-technology companies to enable their business clients to design and implement better systems to survive and compete (sorry, but sometimes the old clichés are just needed) in this new e-world.

Almost every business, especially SMEs, will outsource a range of specialist functions because fast broadband makes it feasible for the first time. Why bother doing your own credit card payment processing, for example? Logistics and fulfillment – leave those administrative quicksands and traffic gridlock to someone else.

Now you’re talking about any given company having a range of specialist partners to provide the full complement of skills for its business offering. Instant online communications (let’s top talking about ‘virtual’) means the appropriate skills and function set is available for each transaction. In this new outsourcing-driven way of doing business, it seems inevitable that our ISPs will play a major role in putting the strategic partnerships and alliances together. The term ‘Business Service Providers’ has already emerged on the other side of the Atlantic.

I credit the English guru Ray Hammond with being the first to say “If you want to understand e-commerce, just drop the E-.” I agree. Business has acquired go-faster electronic stripes but it has not changed. Those of us in Internet-related services tend, I think, to become a little too involved in the buzz of tomorrow’s technology.

But that’s looking from the inside out. In the real world, the customer mostly does not know or care exactly how goods are made or distributed or a service provided. How good and how much are the questions, often judged by brand image. And like any spoiled brat, I want it NOW! In many ways the key value of the Internet is quite simply that it enables a business to tackle the NOW factor. We should kept that in mind.

January 2001

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