E-commerce's road to success

The proper use of Internet commerce will be a huge boon to companies and customers, if they can avoid the pitfalls and the overhyped technology -- such as cyber money.

Or so said David Linthicum, CTO for Software AG Americas, in a speech at Internet Expo Tuesday in San Jose, Calif.

"Cyber money, cyber cash, all these other things which were geared to take off as a technology, are falling by the wayside because they're really too early in the cycle to be effective," Linthicum said. "In other words, we don't need cyber money yet. I've got my American Express and as long as I can use that protected on the Web, I'll be OK with that."

	Real trouble for virtual cash -- online selling is hot, but new forms of payment are ice cold.

Events this week seem to support him. CyberCash Inc. (CYCH), the leading Internet e-money vendor, reported another awful quarter Monday. Since its inception in August 1994, CyberCash, which offers Internet credit card, check, and coin products, has now lost $64 million on revenues of less than $4.7 million.

Linthicum said another problem for e-commerce was that hype, which created unrealistic expectations. "Everybody agreed with [the hype], except the people with the credit cards," he said.

Still, the upshot for e-commerce remains "you can make tons of money and beat your competition to death," Linthicum said.

He cited Amazon.com and BarnesandNoble.com, but also pointed to smaller ventures, such as wine and food sellers, that have done well.

"These little success stories will increase as we become more comfortable with buying and ordering over the Web," Linthicum said.

Beyond retail

In addition to selling, a megatrend in Web commerce is "supply-chain integration," which Linthicum called the best kept secret in manufacturing. He cited General Motors' Saturn unit and Harley-Davidson Co. as two of the innovators.

"Supply chain integration is a huge opportunity, more so than Internet retail ... because it allows you to automate lots of things that we're still doing manually," he said.

Ordering and building can be tailored and streamlined. "I'm going to buy my motorcycle from Harley-Davidson because they can build it in a couple days instead of a couple of months. They can add value to my consumer experience by tightly integrating the process."