Gartner urges IPO patience

During a media preview of the themes and predictions to be revealed at Gartner's E-Business 2000 conference to be held this week, Gartner's senior vice president of Asia-Pacific operations, Bob Hayward, urged capital-starved startups to refrain from racing to IPOs. Instead Hayward argued in favour of the stabilising effects of a non-listed growth period.

"The ASX is just too easy, it provides startups with dumb money and traps them in to prospectus forecasts."

The funds raised by IPOs were characterised as of less value than those derived from venture capital, which is often also associated with the introduction of skills and experience to fledging companies, as well as entry into all-important networks of industry contacts.

Hayward went on to explain that the credibility and experience which comes from a few years of sustained growth based on venture capital ultimately results in a much higher initial valuation, making an IPO worth the associated difficulties.

Amid claims that the New Economy is merely a more efficient version of the old economy, Hayward explained some of the intricacies associated with the brave new world of e-business. Gartner's analysts predict that it will become increasingly difficult to distinguish between IT strategy and general business strategy as e-business becomes the central focus of business methods.

Gartner analysts are also set to signal an increase in collaborative commerce, with a sharp growth in online B2B services and partnerships. Hayward explained the need for business in the Asia-Pacific region to "open the kimono", and share information in order to survive.

"Business will have to accept that 80 per cent is good enough and get moving when it comes to B2B services," Hayward said.

According to Hayward, those companies that can launch e-business strategies and services quickly, and then become involved in a process of constant innovation, are those most likely to survive in an atmosphere of increasing consolidation. "It's better to shoot yourself in the foot than to be shot in the head by another," Hayward explained, likening the rush into e-business as "normal business on steroids" and providing marked improvements in supply chain and inventory efficiency.

Although Gartner remains upbeat about the prospects of e-business innovations and is encouraging a climate of risk-taking and innovation, it predicts that 80 per cent of Australian dotcoms will fail by the year 2003.

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