Businesses To Drive Next Net Revolution

We are now languishing in the depths of the post-Internet bust. Times are quite different from a year and a half ago, when virtually everything about the Internet -applications hosting, B2B exchanges, wireless Internet access, even Internet portals- seemed destined to reshape the world as we knew it.

Today, of course, a dollar and an Internet business plan -hell, a dollar and an ongoing Internet business- can barely buy you a Wall Street Journal. Just what has happened to the Internet earthquake, which was supposed to rearrange the business landscape so rapidly and so dramatically? Has it expended all of its force, or is it quietly building pressure for yet another go at rattling the industry? And, if the latter, will the fault line release its transforming energy cataclysmically or in a more gradual, though still profound, way?

Whatever the Internet’s future course, it is extremely unlikely that we will return to the unbridled (and unjustified) euphoria (or the naive dreams) of years past. Ultimately, the Internet will indeed transfigure the way business is conducted. How? Let me offer just a few examples of the ways in which the Internet will (not may, but will) reshape business as we know it – especially the computer and communications industries.

Before getting into how the Internet will alter the world, I must first explain my view of how it won’t alter the world. We will not, at least not during the next several years, see the re-emergence of the “Myth of the Consumer Internet” – the vision of hundreds of millions of users, with Internet-enabled devices sewn into their lapels, conducting billions of online transactions and creating trillions of dollars in new revenue per day. While consumers will certainly increase their use of the Internet, this adoption will be more steady than seismic. As we have been insisting since the beginning of the Internet Age, the real shake-up will occur in business. That means that adoption will be driven not by fad or addictive obsession; but by cold, hard business benefits and return-on-investment (ROI) calculations.

Just how will the Internet transform business and our own industries? Primarily by driving all types of IT and communications industry trends to the Internet. For example, it will:

  • Lead to a transformation of all computing and communications architectures into Internet-optimized and -standardized architectures.
  • Speed the trend away from best-of-breed, and toward pre-integrated, computing infrastructures.
  • Fuel a long-term shift from predefined, static solutions to dynamic, on-the-fly business solutions.
  • Revolutionize the way we use business resources by integrating access to all applications, content and services into virtual workplaces that tailor these resources to our specific needs.
  • Redefine the structure of the IT and communications industries around large, self-reinforcing, inter-industry ecosystems that will alter the composition of the industry and requirements for market success.

These shifts are certainly important to the IT and communications industries. They will, after all, radically alter the composition of these industries and the ways in which all vendors and providers deliver their offerings. They will meet our basic criteria for being “inflection points” that create huge new markets, change the rules of industry competition, and produce new winners and losers. But, while these changes are of great import to our own industries, they will hardly transform the nature of business in the 21st century. These are the type of under-the-cover changes that will only excite, or more likely traumatize, corporate IT and communications executives.

Let’s instead focus on three Internet-based changes that are likely to rattle all industries and attract the attention of virtually all line-of-business executives, from manufacturing and sales to CEOs:

  1. The shift from automating personal and intra-company business processes to automating inter-company processes, thereby creating what we call the “extended enterprise.”

    The mobilization of the workforce and the creation of the “always-on employee” and the “always-on company.”

  2. The adoption of Internet applications hosting and the transition to wholesale hosting.