The Internet changes everything

THE INTERNET CHANGES EVERYTHING

The Internet is poised to transform the way the world does business

By John Williamson

Is the Internet poised to 1 overturn established busi­ness strategies and threat­en extinction to enterprises that are unwilling, unable or unready to respond to its ichalSenges?

John Chambers, the president and CEO of Cisco, thinks so: “The companies that understand how to employ this technology, pick the right applications at the right time, under­stand their competitive advantage and keep one step ahead of com­moditization in this new market will be the ones who grow and survive.”

From Beijing to Budapest, the In­ternet is transforming business com­munications. “In Hungary—as world­wide—the Internet is about to change the basis of telecommunications and it will become the natural carrier of _M business life,” says Otto Gecser, chief | marketing officer of MATAv, Hungari- § an Telecommunications Company. | “The number of Internet users will £ soon reach a ‘critical mass’ and the I

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Internet will be treated as a valuable i

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market platform.”

Already, businesses are turning to the Internet for both internal and external com­munications. “Companies are not only us­ing Internet technology to sell goods, they’re also using it to keep in touch with far-flung staffs, to share information and communicate in real time through in­tranets,” explains JoAnn Patrick-Ezzell, president and CEO, AT&T Asia/Pacific in Hong Kong.

In Asia alone, AT&T expects electronic commerce via the Internet to reach $20 billion by the turn of the century. “Worldwide,” says Pascale Sourisse, president and CEO of Sky- bridge, a company building a new satellite

John Williamson is senior technology editor for Global Telephony Magazine.

system offering ultrafast Internet links, “it is thought that the Internet will be generating access, network and service revenues in ex­cess of $60 billion by the year 2000.”

Denis Gilhooly, vice president of busi­ness development at Teledesic, a compa­ny aiming to build a global, satellite-based “Internet in the sky,” believes that “e-mail, electronic data interchange and marketing communications are just the first shots in a campaign that will turn the Internet into a worldwide vehicle for true electronic com­merce, with products and services of many different types routinely marketed, sold and sometimes delivered across the network.” According to Philip Blackwell, a consul­tant with Cap Gemini, one of the world’s largest computer-service companies, “the electronic marketplace is plan- etwide, it functions 24 hours each day all year and is a much lower-cost proposition than conventional mar­keting and distribution channels. For merchants whose businesses are primarily Internet based, value chains and customer relationships alter significantly.”

VALUE-ADDED ACTIVITIES

Clearly, some goods and serv­ices are more suitable candidates for Internet trading than others. “The In­ternet lends itself to the sale of tradi­tional catalog goods and services and to those items that can either be experienced directly via the Net, such as CDs, books and so on, or are susceptible to price, and conve­nience pressures, such as flowers and generic fast-moving consumer goods,” says John Curtis, a vice president with Gemini Consulting, part of the Cap Gemini Group.

Nor does a presence on the In­ternet automatically confer advan­tage, since virtually anyone can post his products on electronic catalogs. “First people start doing their normal business the Internet way. Then they may have to do some completely different things,” says Jos Gerrese, director of Internet business at AT&T/Unisource. The Gartner Group expects success in the Internet-enabled future to go to companies that use the medium to find and attract customers while simultaneously offering value-added activities such as guaranteed delivery and product customization.

Even so, companies will have to move fast to reap the rewards of the Internet. “One calendar year in a dog’s life is really seven years,” says Cisco’s Chambers. “The same thing is true on the Internet.” Ф

Part One: Computers and Communications '98 (March 23) Part Two: The Future of Telecommunications (this issue)

Part Three: Photography and Electronic Imaging (Sept 21) Part Four: Thinking Outside the Box (Oct, 12)

Part Five: The Digital Office (Nov. 30)

NEWSWEEK/JUNE 8, 1998

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