Hi JDN:
> . I cannot see how a successful company can even HOPE to compete if they do not have a reasonably well designed Web site anymore.
I could not have said it better, and my point is of course Internet is here to stay and is utilized for increased productivity as well as profitability. The problem has not been the increased productivity, but rather figuring out ways for profitability.
I hope I am not taken the wrong way as someone who thinks Internet is dead and no business can survive if it continues to have an internet presense. My point is in order to have an internet presense businesses must solidly think through the profitability aspects of that presense and their cost structures.
Having a business in cyberspace has proven to be very much - if not more complicated and costly - than having a business in the real world. It is sort of like opening your own store on the corner of 5th and 7th avenue. Up to now businesses only thought of how to open the store. They thought once the store is opened and they offer their neat stuff, everything else will be fine. However the fact is opening the store is easy, making money out of that store is the challenging part.
Yes there will continue to be huge growth in the Internet. Absolutely no doubt about it. However the cost structure of this growth will be different and will ultimately be passed on to the consumers (in case of B2C models), or other businesses (in case of B2B models - in which case the cost will be passed to the consumers anyway)! For example I can assure you that in the case you mentioned with Jeep, they are going to somehoew pass the cost associated with their Internet presense to the consumers, and no longer absorb the cost themselves at the expense of their profit margins.
Having a business on the Internet involves a whole bunch of industries (e.g. oracle and Informix of the world, Sun, Microsoft, IBMs of the world, Aribas and SAPs and peoplesofts of the world, and Exodus of the world, etc.) Look at Exodus. They are the people without whom many cyberspace businesses will simply have no place on the Internet. Think of them as a huge mall owners that rent space to businesses to have a presense. Right now they are leasing the space to cyberspace businesses below their own cost, and taking huge losses. They hope that someday the number of cyberspace businesses will ultimately make up the losses (the classic concept of quantity and profitability). Should they decide that they can no longer operate unless they increase the rent these cyberspace entities must somehow find the additional money to pay for the extra rent. And how can they do it if they themselves are already losing money big time with their current existing operations.
Also please keep in mind, having a web site to show catalgos is a whole different business model than actually having a business on the net (as is the case with Amazon, or ebay, etc.).
It is no longer a question of technology and whether the technology exists or is valid (e.g. is Sun's technology better or Microsoft, or ...). The technology is there and does exist and has matured. The question now is from a busines standpoint and how businesses can turn this technology into actual real money. Companies such as Sun have been making money up to now for sellin the technology mainly because their buyers have blindly be building infrastructures to have a presense on the Internet. However as these buyers fail to figure out how to make money out of that infrastructure their spending comes to slow down. The growth will definitely be there. However it will no longer be the case that companies build infrastructure hoping that someday they are profitable. They think about their internet presense 10 times before committing money to it.
The investment community continues to think that just because the technology exists and is superior to old ways of doing things, then there must ultimately be money and profitability in utlizing that new technology. We have seen over and over that neat technologies emerge and in fact they can greatly improve the way we all live, however in a strictly business context some of these technologies prove to be nothing but very expensive to deploy and prove to be not profitable in the long run.
Regards, |
