IDC Looks Ahead Through 2000

The key themes for the IT market place for 2000 inevitably involve the impact the Internet has had on business and the rapidly connecting community. Not all of these themes will be positive in the sense that we will see a simple continuation of past trends.

Indeed, for 2000 the outlook involves a dose of reality; we are likely to see a re-evaluation of the recent rush to "embrace the Internet".

The Internet focus of these predictions is more appropriate than ever and provides an indicator of the way organisations can position themselves for the changes ahead.

The key themes for 2000, in Australia as in the United States, which has moved fastest into the e-commerce world, are foreseen as:l Financial reality will meet the Internet. A broadening Internet stock correction, consolidation in key e-commerce segments, and a shift to profitability as a virtue for .coms are all likely to become evident as the year progresses.

Already there is evidence that the wheat is being sorted from the chaff; 2000 is likely to see an intensifying of the winner-take-all attitude.

The latecomers, and those with inadequately developed e-commerce models, will quickly find that "red ink is good" is not a recipe for longevity. During 2000 profitability will become an imperative for e-commerce.l Free Internet access services, devices and software will proliferate. What we have seen so far is likely to be the forerunner of a greater wave. IT suppliers, ISPs, and .coms are likely to feel intense pressure to adapt to this new economic model, the next step in expanding consumer Internet adoption.

Just as one does not pay to enter a retail shop, 2000 will bring the realisation that Internet access will need to be somehow subsidised so that access to do business is free.l The death of .com as a sole strategy. As customers become connected to the Internet, and everywhere else, other factors will need to be considered so that pure-play Internet players develop their presence in the real world.

Increasingly, dominant companies will have strong non-Internet channels including real-world points of presence.

These may be engines and tyres, not necessarily bricks and mortar, but a fully developed logistical infrastructure will be key. During 2000 IDC expects to see considerable energy and resources devoted to building strategic partnerships and alliances to move quickly beyond the simple .com strategy.l Channels, channels, channels. This year, smart companies will actually put the network effect to work in their business model, radically expand their e-channels and, by leveraging the network also become a channel for others.

In 2000, indirect channels are expected to make a huge comeback as organisations seek to broaden their Internet reach, particularly as they seek to build their business-to-business Internet strategy.l IT infrastructure is revisited. Organisations, having addressed the Y2K and GST issues, will reassess the appropriateness of the IT infrastructure if they are to realign IT with business goals and maximise the opportunity presented by e-commerce developments.

It is likely that computer systems and storage requirements will be under severe pressure and that new software will need to be deployed.

Most organisations will need assistance to rapidly move from their present position to this new reality.

Many pressures on IT managers will be apparent throughout 2000. IDC believes the answers to these issues will largely dictate the rate of progress and direction of IT investments over the next few years.

Graham Penn is general manager of research for IDC Australia

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