Ecommerce enabler

When the Internet exploded into commercial life at the end of the 1990s, it promised so much. Consumers, investors, even pets, were supposed to gain from the world running at ‘Internet speed’. For a few, it worked out very well. But for most businesses, and for many of their high-technology partners, ecommerce has ultimately been a big, cyber-sized disappointment.

Now the good news. Ecommerce is not just here to stay, it is growing stronger and more important by the day. And it is going to last. That means huge opportunities for those ecommerce technology suppliers still standing from last time around, and even for a few that have entered the fray since. Among those sub-sectors set for strong growth: content management, billing software and ecommerce servers; online security and transaction auditing; online relationship management; mobile server software. Once the structural issues are sorted out, even web hosting and applications service provision will enjoy a sustained revival.

Many of these sectors have been little short of disastrous over the past two years. So what is different this time? First, people are getting connected in more ways than ever before. Broadband to the home, digital television, Internet-enabled mobile phones, personal digital assistants, computer games consoles, wireless local area network access points, Internet kiosks and cafés – these things were listed in business plans in 1998. Over the next three years, they will all be commonplace.

Second, the business world has learned from the mistakes of the dot-com era. Companies are more realistic, they know what it is they need to build, what levels of business they can expect. They are learning how to get a payback. They will spend sensibly, and, for those suppliers who deliver as promised, they will keep coming back.

Third, the Internet infrastructure is now capable of supporting more complex business ecosystems. This is thanks to a multitude of new Internet standards and the adoption of more sophisticated practices. These are enabling simple and flexible integration between businesses, and will be used to create a host of ecommerce partnership opportunities for manufacturers, retailers, telecoms operators, banks, and media companies. In short, the web is now a better place to do business, organisations are much more confident about using it to expand their business over the web, and consumers cannot avoid connecting to them through it.

These are the factors that will drive a second Internet gold rush. By 2006, the number of web sites in Europe that support commercial transactions will grow five-fold to 10 million, according to market researcher IDC. That means that there will be eight million more ecommerce technology sales opportunities over the next four years.

In the first wave of the commercial Internet, application software, such as ecommerce server software or self-service software, enjoyed a rapid boom. But in this next wave, there will greater focus on ‘ecommerce middleware’ – the tools that enable the rapid creation and integration of Internet-based routes to market. Billing and customer management technology is still immature; there is a clear need for better auditing, management and recovery capabilities; and much work still needs to be done to better support the many different internet-access devices.

Service providers can also expect strong demand as small and medium-sized organisations, daunted by the complexity, seek ways to make greater commercial use of the Internet. For example, an ecommerce service could enable a humble sandwich shop to redeem digital discount vouchers that are delivered to their customer’s mobile device through a wireless network.

Crazy? No. It is just what the business plans promised all those years ago.


European Internet commerce revenue
2001   2006  
$156 billion $2,077 billion
Source: IDC

Avatar photo

Ben Rossi

Ben was Vitesse Media's editorial director, leading content creation and editorial strategy across all Vitesse products, including its market-leading B2B and consumer magazines, websites, research and...

Related Topics