Everyone knows how much the Internet has grown over the past year and how hot Internet stocks have been. But what often gets overlooked is the huge impact that big Internet firms are having on the technology industry as a whole and on just about every player. Our annual ranking of the top 100 technology companies is an example. There were heated debates among editors, contributing editors, and Labs staff about who really is influential. Nothing was more controversial than where to put the Internet companies: Are they just users of technology, or are they creators whose sites and products affect and influence all of us? The latter point of view won.
These Internet companies are both developing and buying technology to solve problems and delivering technology that changes how we live and work. AOL now delivers more mail than the U.S. Postal Service, thus changing how many people communicate. But AOL needs the technology that lets it do this efficiently. Yahoo! has built a set of personal services that cover all sorts of needs, but it needs the technology to deliver more than 310 million page views a day while adding all sorts of new elements. eBay has defined a new round-the-clock way of letting buyers and sellers get together for all sorts of products. But it needs the technology to deliver 1.5 billion pages per month, conti nually updated with the most current bids, creating a never-before-seen real-time transaction-processing problem.
These and other Internet-based companies are among the most advanced providers and consumers of new technology. That accounts for their prominent ascension on our top 100 list.
Microsoft tops this year's chart, and that's not a surprise. After all, just about every PC or Internet company has a "Microsoft strategy." You can't say that about anyone else. But as strong as it is, Microsoft doesn't appear quite as dominant as in years past. The Internet has had a democratizing effect, giving power to new companies with new methods. In providing Internet service or Internet content, Microsoft has been competitive, but nowhere near as dominant as it is in operating systems or office applications. And the emergence of new Web-based applications could pose the biggest threat yet to its installed franchise.
A bigger debate was moving AOL into second place on our list ahead of long-time number 2, Intel. Sure, techies may scoff that AOL is a service aimed at the mass market, and others may complain about things like junk e-mail. But it is connecting an estimated 18 million households to the Internet and provides up to half of all the Internet traffic. AOL chat rooms brim with life, and its instant-messaging solutions keep many Net users connected. Its acquisition of Netscape and its joint venture with Sun set the stage for AOL to be a bigger technical player as well.
The other large hardware and software players are far from going away, but they too are increasingly focusing their energies toward the Internet. Intel invests in Internet start-ups and plans to create a new line of Internet-focused chips. IBM has perhaps done more to promote the idea of e-business than anyone, and even Hewlett-Packard is getting into the act, pushing e-services. Servers from Sun and Compaq run most of the big Web sites, and Oracle databases predominate. (See the table "What Makes the Big Sites Run?", page 112.)
That's not to say new CPUs, new PCs, new chips, or even new applications are unimportant. Rather, they provide the crucial technologies needed to move more businesses into the Internet economy.
I expect we'll see more of these mainline technology companies focusing on Internet-specific technologies in the years to come. Over the next year in particular, I expect to see both a lot more consolidation among the big Internet companies and the emergence of many smaller Internet companies. Often the little companies have the big ideas that end up changing the way we do technology.
It all leads to more changes in technology than ever before. And with broadband communications, personalization techniques, remote connectivity, and faster processors all gaining speed, the next year also promises an amazing amount of innovation.
Are Internet companies just technology users, or are they creators whose sites and products influence all of us?