Companies that want to survive the massive changes to business caused by the Internet must combine a Web presence with a fast and robust distribution setup - a mixture of clicks and bricks, according to Sun Microsystems Inc. President and Chief Operating Officer Ed Zander.
Speaking to a gathering of senior IT executives here yesterday, Zander said that the business world is now two to three years into a 20-year process of disintermediation, where direct online contact between buyer and seller replaces traditional third-party channels.
"The successful companies will be those that are forward looking and understand the true dramatic impact of the Internet," he said. "This is the industrial revolution of the new millennium and companies need to get there fast and go big."
Zander said that the necessary bandwidth for global Internet access and e-commerce is being rolled out faster than anyone had anticipated and that this changed the outlook for businesses trying to stay ahead.
"You must assume that the Internet is everywhere and always on, that competitors from anywhere in the world are only a mouse click away from your customers, and you must plan to reach billions of customers using thousands of different devices," he said.
Success will not be limited to new start-ups since established companies already have the storage space and distribution networks that will remain crucial to effective e-commerce, according to Zander. But companies will have to accept that mobile Internet access using accepted Internet standards, such as HTML (Hypertext Markup Language) and IP (Internet Protocol), will become increasingly important.
"The technology is coming rapidly whereby smart telephones, TVs, airline seats or anything with a microprocessor inside are true thin clients with Internet access," he said. "For the first time in this industry we have standards like HTML, IP and browsers which enable applications and services to be delivered as easily as telephone services. Companies that understand that will do rather well."
According to Zander, Internet growth shows no signs of slowing, with 67,000 new subscribers every day, 10,000 new Web sites being added each week and business-to-business e-commerce revenues expected to rise from US$43 billion in 1998 to US$1.3 trillion in 2003.
"Just like we now have dial tone, we will soon have Web tone," he said. "WWW is the new area code of the world."