More surprises

Internet business is a constant surprise. 1999 was the year of business-to-business surprise, the explosion of trading exchanges, auction sites and successful new players like Ariba Inc. and i2 Technologies Inc. Last year was more like “Surprise! Surprise!” with the Nasdaq meltdown and all the “dot-bomb” collapses.

This year will surely see another set of surprises.

It’s important that IT be positioned not just to handle whatever surprise comes along but also to realize that last year’s surprise sets up the following year’s conventional wisdom and fashionable opinions.

The 2001 fashion in the media and in casual business chat is – chiefly – that the dot-coms are all gone and most of e-business is a dead end, with the worst yet to come. My favourite recent example is from Michael Wolff’s Jan. 1 column in New York magazine: “By the end of 2001, there will be no Internet business whatsoever. … The Internet as a unique business is gone. … Technology, we will come to agree with the passing of the Panglossian era, sucks.” You get the idea. I constantly come across less smart-aleck versions of this in my media interviews about my books, which invariably begin with the assumption, “Since the dot-coms are finished…”

What’s the IT response to this year’s fashion? We can’t get defensive or take refuge in those worthless forecasts of mobile commerce, B2B, Latin American e-commerce or any other type of on-line business being US$Y billion in 2005. We can’t offer new hype. The surprises of 2000 killed the credibility of any killer app news. IT needs to offer a position, a viewpoint on where and how we see 2001, though it, too, will be a year of surprises that we can’t predict.

Every IT professional is – or should be – an ambassador representing his IT organization, company, professional area of interest, technical specialty or any combination of these, so that we have more to offer than a shrug of our shoulders or a “No way!” to any fashion that can greatly influence the climate in which IT works this year.

Here’s my reply. I’m in no way suggesting that it should be yours, but I’m asking: What do you see as the 2001 “surprise” in the Internet economy?

My sense is that it will turn out to be how robust the basic thrust of e-business really was last year and is now. The most striking hint of this is the Christmas retailing experience. Early figures showed overall sluggish growth, but U.S. on-line sales continued their 1997-99 pattern of an overall 70 percent to 100 per cent increase (depending on whose figures you use). True, eToys this month finally surrendered to the realities of marketing costs that never generated enough revenue. But even with its misfortunes and worries over a possible recession, the fundamental structure of B2C e-commerce looks very sound.

And what most impresses me is the new tenacity of the executives I deal with. They’re mostly out of fashion now in that they’re staying the course on e-business. I don’t hear any of them questioning its basic proposition, so it’s still on track.

Finally, I’m beginning to see surveys suggesting that a surprising number of dot-coms are making money.

So my IT-related response to this year’s fashion is this: Look at the fundamentals, not the surface. A massive shakeout will continue in 2001, but – surprise! – while you might see the overall scene today as bad, the survivors and consolidators will look good in 2002.

Keen is chairman of Keen Education, as well as an author and consultant. His Web site is, and he can be reached at [email protected]

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