itmWEB TechWeekly

September 15, 1998

Why Internet eCommerce is in Your Future

In ten years it will seem normal to everyone to do business over the internet.

Dr. Randy Cook of SWTSU moderates Bob Rostohar - Vignette, Steve Madere - DejaNews, and Steve Saltwick - ClearCommerce

The Internet is hot! Many businesses both small and large are spending large amounts of intellectual and financial capital to get ahead in this competitive new medium of communication. Recently, the Austin Chapter of AITP assembled a VIP panel of the leading internet executives in the city to give their perspectives of the future of the Internet and e-commerce for business.

Included were Bob Rostohar, VP of Professional Services & Sales at Vignette, Steve Madere, Founder & Chief Technology Officer of Deja News, and Steve Saltwick, VP of Marketing at ClearCommerce. These companies provide the internet products and technology which support sites such as Bay Networks, CBS Sportsline, Chicago Tribune, Citibank, CNET, Deja News, J. Crew, Lycos, Simon & Schuster, Sybase, and Time Warner. The discussion was moderated by Dr. Randy Cook of Southwest Texas State University.

The Bottom Line: E-commerce is Accelerating

The format for the evening was a moderated discussion with prepared questions. Each panelist brought a different aspect of Internet expertise to the discussion. Vignette provides Internet content and relationship management software, Deja News is an Internet portal site for newsgroups, and ClearCommerce provides fully integrated e-commerce back-end services.

All three companies are highly regarded as market leaders within their respective technology product specializations. Throughout the discussions, many of the same key points were emphasized by all three of the panel members. Clearly, the emerging importance of e-commerce came through loud and clear to the audience. Here is a brief summary of some of the more important e-commerce propositions put forward during these discussions:

  • A large number big, world-class companies are already deeply involved in the application of e-commerce to their respective business situations. These companies will have a huge advantage by being positioned within specific Internet market spaces first. Being first can potentially lock-in a premium marketing slot which generates brand loyalty over time. Yahoo and Amazon Books are examples of companies which have already capitalized their positioning by staking out their market space on the net first. Both companies will be very challenging to overcome.
  • Fortunately, many business opportunities still exist on the Internet for companies to be first within their industry, service, or product categories. But if the established players do not act now, unknown start-ups may soon fill the void.
  • Steve Saltwick put it very well when he stated that "If you are a business in the physical world - it is a safe assumption that your competitor is now figuring out a way to capitalize on the Internet." 

An Opportunity for the Little Guy

Acording to the panel, the Internet is curently the great equalizer, but only for awhile. Small businesses now have an unprecedented opportunity to capture market shares one reserved only for huge companies with large advertising budgets. The Internet currently gives everyone equal access to the electronic marketplace.

In the United States, over eight million small businesses exist with twenty or fewer employees. One these businesses start to move into e-commerce activities a ripple will be felt throughout the business world. All the rules will abruptly change:

  • The number of electronic business to business transactions will skyrocket. The big companies are already moving down this path. Electronic data interchange (EDI) as we know it today will change dynamically as new web-based approaches and standards are developed.
  • The retail space now becomes the whole planet. Is your on-line business ready to handle unfamiliar logistics and customs issues in Germany or Japan?
  • Anything which can now be done by phone, such as placing orders, will be done on-line through the Internet.

One of the biggest impacts of this change will be that your business competitors will come from unexpected places. You may be focused on doing business in the United Kingdom when an unexpected marketing innovation pops-up on a site in Taiwan. You may be wondering what the heck happened when this unforeseen competitor suddenly captures the attention, and the revenue, of your U.K. based customers. The other threat is from large companies which may not even be in your industry at this moment. The Internet now gives everyone the ability to quickly offer new products in this emerging electronic marketplace.

Establishing an Internet Presence

All three panelists agreed that a company must first decide what their real objective is for having a presence on the Internet. Two important choices exist:

  • Marketing Sites - these are essentially on-line electronic brochures with slight interactivity (maybe a resume submittal form).
  • Full Business Transactions - These are sites which allow product order entry, follow-up, and support. Lot's of decisions and issues exist for these sites.
    - What technology will be used?
    - What service will handle e-commerce (credit cards, etc.)?
    - What about searching and ad management?
    - Who will host the applications?

Many businesses, according to these experts, seriously miscalculate the impact that having a web presence with have on both their business processes and their current organization. The implementation of a full blown e-commerce site will usually require unexpected changes in the customer service and delivery aspects of the business. Careful planning and use of e-commerce consultants can help. But going into the venture with realistic business expectations, organizational commitment, and clear awareness are the most important ingredients for success.

Improvements on the Horizon

Each panel member also emphasized that the enabling technologies and software to make large scale e-commerce a reality are still in their infancy. One clear requirement is for better "canned" solution offerings for the coming wave of small businesses who will enter the electronic marketplace over the next few years. These standardized solutions will make the required business to business transactions possible and painless. All of the experts suggested that e-commerce consulting will be a huge opportunity in the years ahead.

For now, the real money to be made on the Internet still revolves around big business advertising, sales, and transactions. But in the future, many important opportunities will exist for facilitating the wave of medium and small businesses now preparing to flock to the net. Many businesses will be in a panic when they realize that they may have waited too long to jump in. Internet technology is causing companies in all industries to pay closer attention both to electronic marketing innovations, and to their known competitor's Internet strategies, just to stay positioned for survival. It has also created an unprecedented opportunity for internet business entrepreneurs from all over the world.