Fundamentals are the future

What a difference a year makes. Last spring, the name of the game was building business. The emerging companies with an edge were the ones that could make e-commerce happen -- and make it faster, smoother and more profitable. It was all about getting big fast.

Helping to smooth out internal business processes and traditional corporate IT functions? Those things just make organisations more efficient and cut costs. And who cared about that, with the economy on a roll?

Well, now everybody cares, and every dollar counts. E-commerce still matters, but the big bankrolls are gone: IT shops are cutting their costs, and venture capitalists are cutting their losses. And clones, freeware floggers and wanna-B2B marketplaces don't seem to have much future.

So which types of emerging companies will do well going forward? The ones that can take the long view -- or can deliver cost-cutting goods now.

-- Glut? Not! Wireless, optical and broadband are still the darlings of venture capitalists. What looks like a bandwidth glut today will be inadequate in a couple of years, or at least that's what investors are betting. That's good news for IT, because when we finally need that bandwidth, it'll be there -- outside your organisation.

In the meantime, inside businesses, technologies that cram more bits into the same pipe or that manage networks more effectively will find a warm welcome. Nobody in IT wants to pull more wire -- not this year, anyway.

-- Self-healing systems. Last year, systems that automatically fixed problems and reopened bottlenecks were going to keep e-commerce running smoothly. Now they look like a great way to reduce the cost of managing systems inside and outside the IT shop.

IBM plans to spend a billion dollars or more on its Project eLiza to create systems that manage themselves; watch for start-ups that think they can do it better than Big Blue. Meanwhile, special-purpose IT appliances that don't require much human intervention won't fix themselves -- but they won't require much fixing, either. Hardware that cuts head counts will look very attractive for cash-squeezed IT budgets.

-- Next-generation IT infrastructure. That means terabyte-scale data management, real-time enterprise collaboration, application access from anywhere - in short, all the productivity IT keeps promising to deliver.

In the short term, what businesses are looking for is to sell, sell, sell. Customer relationship management (CRM) is working its way down to midsize and even small businesses by way of application service providers. But CRM projects are notorious for poor success rates at big companies. Emerging vendors that can make CRM work -- and get it running fast -- will cash in.

-- Next-generation Internet. Intelligent searches. Waste-not-want-not data caching. Priority-appropriate routing. Encryption and virus detection everywhere. All the holes and flaws that make the Internet a shaky place to do business have to go away soon. And everything that makes the big network smarter, faster and more secure will have a market in corporate networks, too.

But until then, businesses will depend on moving their data and doing their transactions on tight, secure, global virtual private networks (VPN). The hard part is "global" -- providing data encryption, security and access anywhere customers want it. That's where emerging VPN companies are making their play.

-- XML marks the spot. The biggest of big businesses have kicked B2B start-ups out the door and taken control of industry exchanges. Soon, these 800-pound gorillas will be ready to settle on what flavor of XML each industry will use in its global supply chains and marketplaces. Emerging companies that deliver the right vertical XML solutions will own their pieces of the market.

While we're waiting for that, there's plenty of work for emerging e-business consulting firms that have cut their teeth on dot-coms and graduated to the Fortune 500. Not all dot-consultancies are up to the task; big firms need systems more solid than the dot-coms demanded. But the ones that can fill the bill work at Internet speed and understand enterprise business requirements.

And when every dollar counts, that can make all the difference.

Hayes, Computerworld's senior news columnist, has covered IT for more than 20 years. Contact him at

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