It's time to go boldly into the networked economy

The United States is experiencing a sustained period of economic growth, full employment and low inflation that have created perfect conditions for heavily investing in and deploying the technology of the emerging networked economy, according to Gartner Group. At a time when financial advisors are cautious due to dot-com company problems and marketing fluctuations, Gartner analysts advise bullish strategies and execution toward the networked economy.

One indicator of the merging networked economy is Gartner's forecast for the application service provider (ASP) industry, which is poised to grow 2,400 per cent -- from $US1 billion in 1999 to $US25.3 billion by 2004. According to Gartner, the ASP market represents a major computing revolution with the power to dramatically redraw today's IT ecosystem based on the delivery of application services over a network.

Technologists and business executives have an immediate opportunity to increase the revenue and market valuation of their companies. There has never been a better environment to make bold moves toward the networked economy, said Gartner analysts. We have perfect conditions for technology breakthroughs, the only variable is the guts and conviction of business leaders in the wake of dot-com hysteria.

E-tailers favour Australia Post

A survey released last week by KPMG Consulting has identified Australia Post as the preferred "outsourced fulfillment provider" among e-tailers. The survey of 12 Australian Internet retail companies conducted in July/August 2000, reveals that e-tailers anticipate a 97 per cent increase in investment in the fulfilment part of e-tailing, where customers order on line and have goods delivered to their door.

The survey found that the push into cyberspace by retailers is rapidly changing the way in which goods and services are delivered to the customer, creating a new set of issues to be resolved by business.

However, despite all the hype generated by the new technology, the focus on customer service levels has not been reduced. E-fulfillment providers must generate faith and trust in the marketplace, and they must demonstrate that they are capable of supporting a rapidly expanding market.

Mobile Internet start-ups face rough rideMobile portal and wireless application service provider (ASP) start-ups will find it difficult to dominate the mobile Internet services market in the same way that Yahoo! and AOL have done in fixed-line Internet services, says a new report from Analysys. By 2005, Analysys forecasts that over half of the predicted 1.1 billion mobile subscribers will be accessing Internet serves from their handsets, with mobile portals earning more than $US1billion from advertising and commissions. Established and start-up companies are moving quickly to take advantage of that growth but the report suggests there are no easy pickings.

These are not huge numbers considering how many companies are targeting the market. Mobile ports and wireless ASPs will need to build their customer bases quickly because start-ups without substantial financial backing risk running out of cash reserves before sustainable revenues from transaction commissions and advertising can be achieved.

Strong Growth for Software worldwide

The worldwide packaged software market is well positioned for strong growth over the next five years according to a forecast released recently by IDC, which indicates revenues will increase at a compound annual growth rate (CAGR) of more than 15 per cent. Application development and deployment software, the smallest segment of the market, will be the fastest growing, IDC believes. Its revenues will increase at a CAGR near 20 per cent from $US36.5 billion in 1999 to $US90.2 billion in 2004. As strategic business initiatives are turned into well-defined, well-executed Web strategies, demand for application development and deployment software tools will increase. Despite the high growth rate application development and deployment software will remain the overall market's smallest segment.

The applications segment is the largest and most fragmented segment of the software market, IDC expects its revenues will increase at the slowest pace, a 1999-2004 CAGR of just over 12 per cent. However, this overall number masks the growth of more than 30 per cent anticipated in submarkets such as customer relationship management (eg, sales, marketing, support, and call centre), product information management, content and document management, and business performance management.

Net markets to see explosive growth

Independent Net Markets will experience explosive growth, in size, geography and industry depth, according to a new report by Jupiter Research, with the number of Net Markets expected to grow from 1,200 currently to more than 5,000 by 2002. Once considered experimental, Net Markets are becoming the standard by which business supply chains interoperate; businesses that fail to incorporate them into their strategy risk losing their competitive edge, Jupiter analysts explained.

Jupiter defines Net Markets as online digital marketplaces electronically linking buyers, sellers and business partners. Jupiter projects that Net Markets will account for 35 per cent of US business-to-business (B-to-B) online commerce by 2005, totaling $US2200 billion in spending. In 2000, Net Markets spending will reach $US25 billion, compared with US B-to-B online commerce of over $US300 million. While independent Net Markets make up only a small fraction of the total B-to-B economy, their influence has shaped the Internet strategies of many industries.

Independent Net Markets are emerging in response to real business needs, and companies that don't participate in them over the next few years will loose the ability to compete, Jupiter analysts believe. Only a handful of NetMarkets existed two years ago; today there are more than 150 Net Markets in the metals industry alone.

Half of SMEs will suffer Internet attackSmall and medium sized enterprises (SMEs) are likely targets for Internet attacks and many will suffer a successful attack between now and 2003, according to a report released by Gartner Group. Specifically, the survey said that more than half of those businesses that manage their own network security and use the Internet for more than e-mail will be hit. And more than 60 per cent of companies that are targeted will be unaware of the attacks, which are likely to include Web site hacking and the spreading of viruses, Gartner said in a statement.

SMEs are especially vulnerable to malicious attacks because they usually cannot afford, or do not attract personnel who have security experience. As a result, part-time employees or personnel with less than top-notch qualifications often manage key enterprise servers, Gartner said. In addition, SMEs often use regional ISPs (Internet service providers) that provide unknown levels of security, which puts SMEs at a greater risk of an attack

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