Coming to the close of what was, euphemistically speaking, an eventful year, it makes sense to look back and reflect, before contemplating what will take place in the next millennium.
E-commerce came top of a list of 20 new technology areas targeted for investment by the top 200 IT users.
Starting with terminology. Last year the buzzwords were e-commerce and e-business. In 1999 the "correct" terminology has changed to "the New Economy" or "the Network Economy". We are also finding it slightly less useful to talk about B2B (business-to-business) and B2C (business-to-consumer), since the two are becoming more integrated. But essentially there is still a huge difference, in reality, for the moment.
What is still clear is our long-term view of e-commerce, ie that it will take the next 10 years to roll-out and reach its full potential. Which is not to say there is nothing happening right now - there is! But we are still at the inception of the cycle, and there is much more opportunity ahead of us than behind us. We might refer to this as Internet v1.0 (the last four years) versus Internet v2.0 (the next five years).
Did we see as much new growth in 1999 as we expected? I believe we did, based on the results of the 1999 BMI-TechKnowledge South African E-commerce Survey, which indicated massive growth in adoption by businesses and consumers alike. That the growth comes off a very small base - eg when compared with traditional EDI or as a proportion of commerce in general - was also no surprise. One of the surprising observations from this study came from the consumer viewpoint, looking at how many Internet users have adopted online banking, ticketing and other forms of e-shopping, respectively.
Firstly, it is amazing just how limited the overlap in these three areas is. But the other observation is the converse - taken together, the three categories account for nearly half of all Internet users surveyed! Although the sample was skewed towards the more advanced Internet users, with the dramatic growth in future adoption indicated by the survey, the 50% mark will be rapidly crossed in the near future. And the overlap between the three categories will diminish, as more of these users start to do all three functions.
Impact of Y2K
We predicted a slowdown in IT spending towards the end of 1999. This has indeed happened, following a release of pre-Y2K spending in 1998 and the first half of this year. The good news is that we are predicting a renewed outflow of pent-up demand in 2000, and this will spill over to e-commerce projects. E-commerce came top of a list of 20 new technology areas targeted for investment by the top 200 IT users in this year`s survey. A lot of this will include migrating legacy systems and EDI to embrace the Web, and the new, Web-style of interacting, which is what radically changes the business landscape - hence the "New Economy".
Mobile access devices
WAP applications are now being launched, and Nedcor has taken the lead among the four largest banks to put its weight behind this emerging protocol. Others will follow suit in rapid succession. A year ago no one talked about WAP, but we anticipated the trend, and BMI-T still predicts that smart handheld devices, driven by WAP-compliant cellphones, will be the leading growth driver in future.
Meanwhile, although most are not yet going online, PalmOS based devices - and to a lesser extent Win CE devices - are taking SA by storm. This happened in1999, but watch out for 2000 - you ain`t seen nothin` yet! Prices are falling rapidly as competitive manufacturers are being licensed by 3Com. Give it a year, and every second person you do business with will have one! (Slight exaggeration intended).
Payment technologies
Who would believe there are already 30 million smart cards in active use in SA at any given moment? According to the Smart Card Society, half of these are phone cards. Another 4 million are cellphone cards. The rest fall into about 20 different categories, from taxi cards to golf club cards. This is no small trend. New payment technologies - on and off the Web - will be a major growth area to watch next year. Smart cards are also important because they can be re-charged from cellphones. Billing systems in future will converge. Expect your aggregated monthly bill payments to be processed by your telco or cellphone operator in future, perhaps in conjunction with an Internet portal and a bank? You bet!
Internet access
We have reached a major inflexion point in the Internet access growth curve. Or we haven`t. Depending on which scenario you believe. The major wildcard in the pack is the rate of convergence between cellular networks (and suitable handsets) and the World Wide Web.
The first scenario says the rate will be moderate. Only some 1 million alternative access devices will connect to the Web by 2003, along with some 3 million connected PCs.
A more aggressive scenario allows for much more rapid convergence, with many more millions out of the 6 million cellphone subscribers expected by 2003 to be connecting to the Web - using e-mail and accessing Web content. That would make a major difference, but remember that there is a lot of overlap between access methods - the same individual already uses a PC at work and another one at home to access the Internet. The same overlap will apply for many of the cellular Internet users.
One way or another, we still believe e-Commerce is the NEXT BIG THING that everyone has been saying it is. But it will take 10 years to reach its potential. This is good news, not bad, because it will help to sustain growth in the converged IT sector for some time to come. And maybe the Internet share prices will take note of this and stop gyrating so madly. Somehow, however, I don`t think so!
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