A Year Ago: Big bill for e-commerce companies

Online stores will, by 2002, spend over £173.8m on software that enables them to conduct business electronically -- so says a report from IT analyst Datamonitor.

The report, e-commerce software, predicts that the average spend on e-commerce software will increase at an average rate of 41 percent each year to reach the £173m mark by 2002. The figure, adds Datamonitor, will be responsible for a surge in economic growth over the next ten years brought on by a need for specialist software.

Datamonitor argues that "a large part of the hardware infrastructure is already in place" and with software representing 11% of the total investment in e-commerce functionality made both by web hosting services and own-site locations, software houses are in for a jolly ride when the predicted software "boom" takes place.

However, Datamonitor acknowledges that its figure "disguises the need for further software investments" on other software items such as inventory databases, customer records, web publishing software and the general integration of those factors. For organisations thinking of setting up e-commerce services these "other investments" should be borne in mind, advises the report.

Typical breakdown of ongoing costs for retailers, cybermalls and hosts, 1997

Site maintenance 36% Hosting and cybermall fees 20% Software 11% Internet connection 10% Other 23% Total 100%

Source: Datamonitor