Net Business Transforms 0r

Hitting the Wall at Warp Speed

The Net has changed forever the way business does business and now the Net, itself, is in the midst of teeth-rattling, warp speed evolution which is transforming the Net's own technology, business models, icons and heroes.

In the beginning, if you remember, before there was a World Wide Web, there was a friendly little box, put out by Macintosh, which vowed "to think like you do, not to try to make you think like a computer." Amazingly, ordinary people, not programmers or computer nerds, suddenly were able to create files and throw away their "trash", all with the help of "warm, fuzzy" graphics in a Disney-embrionic style.

Microsoft promised to "put a computer on every desk" and eventually gobbled up the MacIntosh user friendly style to speed the revolution. College student Michael Dell jumped on board to help make that happen, assembling build-to-order computers in his dorm room, selling them directly to clients, incurring no inventory or middleman costs and, ultimately, using speed and thrift, building a company which helped undercut Digital and Compaq.

Those were the days of the proliferation of "the box" but now, the Internet has gained a position at the heart of information flow, and the PC has become a commodity. Everything has changed or is changing. There is a worldwide slowdown in sales of PCs, with the rate of growth in desktop sales this year sliding from 21.5% to 15.5% , and growth rate for notebooks and portables slipping from 32% to 27%, according to Gartner Dataquest.

The ways to access the Net have multiplied, through cable, PDA or cell phone. The players in the game have also proliferated, so the role of "techno- visionary" is more dispersed.

At one point, Brent Schendler in an article in Fortune, Their Reign is Over points out "As far as the information technology industry was concerned, the 1990s were "The Bill and Andy Show." The kingpins of Wintel not only dictated the bits, bytes, and business models of computing but also grabbed starring roles as techno-visionaries who foretold where digital magic would lead us. Such was their celebrity that they transcended the business world and became cultural icons: Microsoft's Bill Gates morphed from a gawky geek into a gawky geek who is also the world's richest man; Intel's Andy Grove, a brilliant and plucky Hungarian emigre who personified the high-tech version of the American Dream, wound up as Time's Man of the Year in 1997. "

When the Internet moved to the center, Bill and Andy's power was diminished because of the very nature of the scope and sprawl of the Net and its architechture. Schendler notes "Gates and Grove attained hegemony by exploiting a couple of key chokepoints in computer architecture--the operating system and the PC microprocessor. But in the new, more diverse IT world wired together by universal Internet protocols, there are no such obvious chokepoints to commandeer."

So both the role of the computer and significance of its visionaries has been altered with the increasing dominance and continuing evolution of the Internet.

Many of the companies who played a large part in the Internet revolution are now falling behind, in part because the Internet continues to evolve and in part because the wealth flowing from the Internet turbocharged their journey to become "mature companies" where it no longer makes sense for them to enter emerging markets which, by their very nature, are too small to affect the balance sheet of a really large company.

Some of the new dynamics of the evolving Internet:

Copper to Fiber Infrastructure

Basic changes are taking place in the infrastructure of the Net itself. Much investment is now moving into that sector with the copper telecom infrastructure being rebuilt into fiber. Many venture capitalists are favoring this area because growth is assured.

Servers and Storage

Growth is also assured in this infrastructure area. Dell is a market taker and it is going where the market is. At the annual meeting, Michael Dell told " the crowd that Dell's goal is to be No. 1 in servers and storage, and to be "the premier Internet partner for customers around the world. Let me tell you why we're so focused on the Internet infrastructure", he said, ".... Every time someone types 'www,' they go to a server...."

Crossing Barriers, Developing Reach for Individual Sites

Today, it is not about driving traffic to a single site, it is increasingly about crossing barriers, reaching out to the whole universe of sites which fit your demographic or business model. New software is powering this shift.

Adding Dimensions and More in Depth Capabilities to Websites

Again, new software components " let companies publish their core competencies as Web services, exchange Web Services more freely and embed them into other Web sites easily."

Jack Serfass, co-founder and co-chairman of Bowstreet, a pioneer in this field speaks of "business webs" as a new and richer communication medium. Using cutting edge software and the XTML programming language to add an entirely new dimension to web sites can not only partner they can reach way into the back end of the partner site, so, in effect, the partner's entire spectrum of capabilities exists right there, ready to be used in real time.

Content as Infrastructure

Content, and modules of content, in all its many forms will become increasingly valuable as new software and technology enable it to be both monetized and dispersed across the Net, providing the requisite "stickiness" to the universe of sites. Writers get to write. Marketers get to sell. Everyone sticks to their core competency.

It Will All Come Down to Execution

We already have the vision of the Internet and the now and future networked economy. At this stage, it all comes down to execution and competition, who can do it better and faster. Michael Dell, who has installed a glassed in control center on the second floor of his new OptiPlex factory in Austin. where eighty-four percent of orders are built, customized, and shipped within eight hours and inventory is two hours--is the clear Poster Boy for Execution. At least until the next evolution of the Net, which could come at any moment.