IT Forum: 'Business 2.0' firms will win in e-commerce

Surviving the Internet revolution is going to take more than a casual commitment to IT, say experts.

Research firm IDC predicts that Europe will draw level with the US in terms of the number of citizens online by 2003, and thereafter start to pull ahead, with the continent emerging as the world's largest single e-commerce market.

IDC's Frank Gens, senior vice-president of Internet research, told the IT Forum in Paris Sunday that "the last four years will look like rounding error... The volume of commerce will be twenty times what we see by the end of 1998... The game has hardly started."

In what was to be a popular theme with many speakers at the IT Forum in Paris, Gens argued that only those businesses that moved on to the next stage of e-commerce would survive long enough to harvest profits from Europe's huge growth in online customers. Gens characterised the survivors as "2.0 businesses". 1.0 businesses are those that have reached first base, and delivered Web sites that are fast, secure, and easy to navigate, but getting to 2.0 is going to be much harder and will require much more than putting up a Web site, Gens suggested. The dimensions of the 2.0 business will take the basics of 1.0, but add personalisation, localisation, integration with all IT systems in the enterprise, interactivity, and a focus on service. Successful 2.0 businesses will "play at the new financial scale, build next-generation Web sites, and reach out to the global market".

Many of this next generation will be computer-to-computer Web sites, as opposed to computer-to-consumer sites (Amazon might be an example of the latter). Stefan Elmer, IDC's European Internet research analyst, described how automatic ordering systems will instruct other automatic delivery systems to supply goods and services when intelligent systems decide they are needed.

AG Software's Doctor Erwin Koenig Monday morning outlined the enormity of the challenge facing organisations that seek to build the next generation Web sites envisaged in Gens' Business 2.0. The problem, he said, is that the back-end systems most firms are using are not Web-enabled, while Web sites are not properly transaction-enabled. Koenig urged firms to look beyond traditional back-end suppliers, and ERP specialists like SAP, dismissing them as "children of the eighties", in order to find the integrated systems and platforms for robust e-commerce.

The most striking difference between 1.0 and 2.0 businesses is going to be the emergence of profitability, Gens said. The notion that staying unprofitable almost as a matter of pride, the idea that if you "state you are going to make a profit that could negatively impact your stock value", is going to disappear fast as the Internet bubble bursts, he said. "We believe that is going to change... by 2001 two-thirds of Internet companies will be profitable... It is one of the myths of the 1.0 business that you can't make money, and you shouldn't make money on the Internet."

The 2.0 businesses won't be telling their shareholders to wait until next year, they will be declaring profits soon, he added.

Take me to the e-commerce special.