Future of Dot-Coms, Privacy Pervade at Symposium

SAN DIEGO (04/11/2000) - Gartner's Spring Symposium/ITxpo 2000 kicked off here Monday with a keynote address by Gartner Group CEO Michael Fleisher and a Masterminds Panel focusing on several issues affecting the IT industry, including privacy, hybrid business models, and broadband.

Fleisher's address focused on three characteristics of e-business, including a bold prediction that 95 to 98 percent of dot-coms will fail in some form over the next two years, whether it be a complete shutdown or being acquired by another company. He added that traditional business models without some sort of e-commerce scheme will need to adapt and meet the need for e-business.

"There has to be a blending of pure business models," Fleisher said. "No traditional company will survive without a dot-com marketing scheme."

He predicted that a rapid emergence of hybrid business models will become a necessity for all businesses to take part in to survive, whether traditional brick-and-mortar companies or fledgling start-ups.

Fleisher prophesied that business-to-business e-commerce will become much more important than business-to-consumer transactions, reaching revenues of $7.3 trillion in 2004, and that the growth of wireless and broadband technologies will only continue.

"The era of wireless and broadband applications is upon us," Fleisher said.

"Non-PC devices will proliferate even as the number of PCs shipping increases."

Those themes continued into Monday's Masterminds Panel, where the continually stressed key to success in the Internet economy is finding a community and learning to reach it at different times in different ways.

"You have to think increasingly about device matching," said Paul Sagan, President and COO at Akamai. "The challenge is having to think of your audience on any one of those things [PDAs, cell phones, PCs] at the same time. The problem is that your audience is the same person in different ways, and you can't afford different versions of your content."

Sagan agreed with Fleisher that not every company out there is going to make it, but each must try to find its own community and learn how to reach it consistently and go for aggressive monetization of it.

"When I go to the airport, there is a row of 10, 12 car-rental companies and even the 12th guy is renting cars," Sagan said. "That is not going to happen on the Web."

Vasant Prabhu, president of Information and Media Services at McGraw-Hill, agreed, stressing that the downfall of many startups will be their inability to scale and to address business needs, leading to consolidation or acquisition.

"Dot-coms overestimate the value of technology, and technology is not enough," Prabhu said. "Also, they are burning cash at much too fast a pace."

Instead, Prabhu suggested "the winners will be those who have proprietary access and control of content,"citing the recent AOL acquisition of Time Warner as an example of such a match.

The panel also addressed the hot topic of privacy on the Web and all agreed that eventually there is going to be a need for some sort of regulation, whether it be self-imposed or government enforced.

"There is no market without trust, and privacy is something everyone is working through," Prabhu said. "A free-for-all makes me worry about imposed regulation."

Sagan agreed, stating that the IT industry must regulate itself. "If we go in the opposite direction [government regulation], no one wins," he said.

IT professionals attending the show added that there are positives and negatives to both solutions. Self-regulation lends more support to the businesses, allowing them to make their own set of standards about what information should be made available, but leaving the consumer out of the process. Government regulation, on the other hand, ensures that the consumer is protected.

"I would hope there could be a happy medium," said Martin Daly, a strategist at Lucent's strategy division. "Government regulation is not seen as too positive by the industry because it's too pro consumer, too protective. However, it does provide a better user experience."

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