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News from National -- Current Articles
6/22/2001
9:50:46 AM
Dr. Jaime Kaminski
Interview by S. Ibaraki, I.S.P.
This week Stephen had a discussion with Dr Jaime Kaminski, Senior
Technology Analyst and Technical Briefings Manager Xephon (http://www.xephon.com). In this interview
Stephen asked Dr. Kaminski to comment on what he considers to be the most
"important" technologies and technology directions that companies
and IT professionals need to consider, and how these have changed from
similar predictions made last year.
***
Q: Xephon is the world's leading producer of special IT consultancy reports,
professional journals and international IT conferences. Jaime, can you
describe your involvement in the many services provided by your
organisations?
A: Thank you Stephen, for inviting me back. It has been about a year since we
last spoke, and it will be interesting to review the industry.
As you note, Xephon has two principal lines of business - IT publications and
conferences. We have been around for twenty-one years, providing technical
and market research which focuses exclusively on information systems for
large enterprises. This research is made available a number of forms,
including over thirty conferences each year, strategic consultancy reports,
and thirteen technical journals which range in content from those devoted to MVS
and NT. We also produce numerous surveys, news reports, and strategic
bulletins. Our material provides value for all levels of the IT organisation
from the systems programmers, to the CIOs and CTOs. It is this breadth of
coverage which really defines Xephon.
My role spans both of these business functions. I started my work with Xephon
with the seminar side of the business. I was hired to put together
high-quality technical seminars and conferences. This role rapidly expanded
to incorporate analytical research for publications, and original writing.
The deep integration of these two roles provides a tangible benefit for our
customers - we can rapidly incorporate the results of our research into
seminars. But this is a two-way process: we are continually listening to our
clients’ needs, through surveys, site visits, and from discussions at our
conferences. We use this information to direct and refine our future areas of
research.
***
Q: How did you come to Xephon and to your current position? How do you see
your position evolving in the short and long term?
A: Like you Stephen, I come from an academic background. Before entering the
IT industry half a decade ago, I completed doctoral-level research for a
Ph.D. and lectured to both degree-level and post-graduate students. When I
moved into the IT sector, I first worked with databases. When the opportunity
arose, I jumped at the chance to work with Xephon. This position allowed me
to fully exploit many of my skillsets: the ability to undertake meticulous research,
and to articulate ideas in technical lectures and seminars.
In the short-term I see my role incorporating a much greater use of Web-based
technology. Xephon offers electronic access to all our publications. I see
increased granularity in these offerings - instead of offering whole books
on-line we are beginning to offer individual chapters. I think we are also
going to see a much more rapid dissemination of information using the Web.
***
Q: Jaime, what do you see as the key skill set required for IT professionals
today and in short term and long term future?
A: Stephen, I always give this answer to the question of skills. In my mind
the key skill for IT professionals is the integration of IT knowledge with
business skills. The purpose of IT is to support the business function. I see
the future IT professionals divided into those who are technology-focused and
those who integrate technology and business. This latter group of future IT
professionals needs to be aware of the possible technology directions which
could support their business needs.
There is a serious shortage of IT staff with this blend of business and
technology skill. In the short-term this skills shortage will be hidden,
because of the poor economic climate. Many organisations are laying off
staff, and these personnel are filling gaps across the industry. However, it
is important to realise that these poor economic conditions are not going to
last forever. This is not an IT phenomenon, but a global economic
restructuring. Such economic conditions normally occur once a decade and when
the industry gets back to normal the skills shortage will still be there.
***
Q: Jaime, you are heavily involved in research. Based upon your exhaustive
research, can you comment on what you consider to be the most
"important" technologies and technology directions that companies
and IT professionals need to consider, and how have these changed from your
predictions last year?
A: I would suggest that we review the technologies that we considered last
year, and see how they have advanced over the last year. There are many ways
to look at future technologies - one of which is to consider when these
technologies are likely to achieve critical mass.
If we look at it this way in the short term, that is 1-2 years we will see
increasing importance attached to XML and standards in general, Linux,
wireless devices. Obviously in this short term there are a wide range of IT
considerations that need to be reviewed such as security, systems management,
storage and the Microsoft product set. With these technologies come some
issues for consideration, for example consolidation, systems management, the
management of remote technologies, data management, and network management.
In the mid-term future, corresponding to about 3-4 years, we will see the
widespread deployment of IPv6, VoIP, agent technology, speech recognition.
These technologies still in a state of flux at present but I have to
emphasise that these technologies will assume considerable importance in the
future, and here at Xephon we keep close tabs on the latest developments in
this arena.
Some of the most interesting predictions relate to the long-term future, five
years and beyond, it is here that we are likely to see the most radical
changes to both IT and its effect on society. We may very well get the first
glimpses of what an e-society will look like.
If we look at these technologies and directions in more detail I would make
the following comments about each:
Windows and the Microsoft product set
This prediction has not changed, quite simply the Microsoft product set will
be in all our futures. If you look at Microsoft’s technology road map –
especially the .NET initiative, and if you study Microsoft’s acquisition of,
and investment in other technology companies you will see that there are very
few areas of the IT sector where they do not have a presence. They are
represented in every sector from content provision to wireless. Many people
still associate Microsoft with Operating systems and applications, this is a
grave underestimate, they are so much more broadly focused.
When we consider Operating Systems we should consider Windows 2000 which has
brought with it a vast range of new features, redesigned directory services,
and enhanced availability. A move to Windows 2000 is inevitable for many
companies, as releases of strategic BackOffice products such as Exchange 2000
and SQL Server 2000 rely heavily on its advanced functionality. More
importantly at the high end of the Windows 2000 product range is the
‘DataCenter’ product which is the strongest indication yet that Microsoft is
looking to expand its horizons towards the high-end business and
mission-critical world. However, the adoption rate within enterprises of
Windows 2000 has not yet exceeded 50%.
Beyond Windows 2000 Microsoft will release the XP operating system. Your own
research at iGen Knowledge Solutions indicates that enterprises will purchase
the new XP and server equivalent OS and upgrade existing Windows
installations in some numbers. Your research suggests that the adoption rate
for XP will be 34% by the summer of 2002 after initial reviews and
troublespots have been found and 68% by the fall of 2003. The new features
including support for wireless, and improvements in management (through group
policy) will provide a complete return in investment in 13 months. The
features will also be present in the server editions (Whistler).
Moreover, the associated implications of the forthcoming .NET, initiative
will be highly significant for the industry. I would call .NET a longer-term
strategy for users, simply because the .NET strategy requires such radical
changes that I would think it will be in a state of flux for at least a year
or two. It would be wise to evaluate these technologies during this time
period. The integral parts of the .NET strategy – such Web Services, and SOAP
look as if they will have a radical affect on the industry.
Linux
Linux has gained wide-spread support from vendors and consumers alike,
especially in the Server market. However, it is important to note that the
release of Microsoft Windows 2000 with its inherent stability has altered
this equation a little, but the cost factor is still a prime mover for Linux.
But although Linux is the fastest growing server operating system with in
excess 25% of the server market, this does not translate into any significant
desktop gains, which are almost negligible. Linux still has to reach a mass
audience by attracting application developers, and it needs work to become a
relevant desktop environment.
However, Linux is gaining a significant market share in embedded devices and
has the potential to take the PDA market by storm. For example, when Linux
PDAs become mainstream, price will become a crucial differentiator, people
will be less concerned about what is running the machine. As a result, we may
see other PDA operating system companies having to significantly discount
their PDAs to compete. Once we start to see Internet-capable PDAs under 100
dollars this will have a massive effect on the uptake of mobile devices.
It is likely that in the foreseeable future, Linux will remain as the second
most important server operating system, so I would certainly suggest that
companies need to acquire staff with Linux skills, and training will be
crucial. Talking to industry professionals has made me aware that there is
currently a considerable skill deficit out there.
However, I think that will change. Because Linux is an ideal OS for
Universities and colleges - both on the server side and to a certain extent
as a desktop operating system - more and more educational establishments are
likely to adopt it. This is likely to have long-term implications for the
skillset of those coming out of higher education. This is the same scenario
that was seen with Microsoft’s software in the 1990s.
XML and standards
One of the reasons we have seen such massive growth in the IT sector in the
last five years has been be a result of the widespread use of standards. At
the simplest level standards are a means to achieving interoperability
between systems. It is this interoperability that is what will fuel the
e-society of the future. At the present XML is the standard that has so much
to offer that we can expect it to pervade the whole of computing, from databases
through middleware to end-user applications. Massive effort is being put into
the creation of XML tools by the IT industry. Not only are new products being
written, but old ones are being retrofitted to work with XML. One of the
biggest potentials for XML is exchanging information between firms via the
Web. But I think XML still has a long way to go before it reaches its true
potential in the industry.
Wireless devices and connectivity
It is highly probable that there will be an explosion in the number of
Wireless devices. Some predictions suggest that the number of
Internet-enabled mobile devices will exceed the number of PCs by 2003. This
may or may not be the case, but what is certain is that the number of mobile
devices being used will increase massively. It is important to realise that
the growth in Wireless devices will be fuelled by the increase in wireless
connectivity.
This is being promoted by many different sources. The large
telecommunications vendors need to drive growth because the market for
conventional voice calls is likely to reach saturation, especially in the
developed nations. The phone vendors need a reason for users to replace their
phones, and hardware vendors see this as a new product outlet.
We are now beginning to see increasing amounts of data being sent using
wireless media for applications such as e-mail and Web browsing. Development
of the wireless WAN is being fuelled by the proliferation of handheld
computing devices, and mobile users potentially become nodes on a SAN,
storing and retrieving data. I think we will see considerable initial use of
this technology by mobile workers and sales forces. The most important point
IT departments need to consider how to manage the security, back-up and
synchronisation of these devices. If this is not given sufficient thought it
could lead to a significant management overhead.
The deployment of wireless Internet solutions will begin to increase,
although this will be tempered by the uncertain economic climate. The rise is
mobile Internet solutions will have a beneficial effect on consultancies and
service industries, because of the difficulties in deploying solutions. At
the present much of the wireless technological innovation is located in
Europe. We may see predatory acquisitions of European wireless service firms
by North American companies who need to develop wireless capabilities
rapidly. We should expect massive expansion of this whole sector in the short
to mid-term future.
Software Development and Object-Oriented Code
During the twentieth century, hardware has achieved a performance increase of
six orders of magnitude. Software has not developed at the same pace; indeed,
software development is still quite slow by comparison, requiring extensive
testing prior to release. This state of affairs is not likely to change
during the next decade. However, there are some things which can be done to
alter this relatively slow release rate.
The pace of the IT industry is increasing rapidly, so software development
times have to shrink. The key to achieving this, of course, is through the
use of object-oriented programming, such as Java. Reusing software cuts
development time and creates a library of building blocks that other programs
can readily use. The information age will be held back without fundamental
changes occurring in software development. The inherent flexibility of a
component-based system makes it much easier and quicker to change the
software as business needs evolve.
Last year I predicted that Java would play an increasingly important role in
the industry. This has certainly been confirmed by the evidence from
recruitment specialists who currently see Java skills as the most highly
sought after skill. Certainly the massive backing being given to Java by both
Sun and IBM is having an impact.
Additionally there are benefits in the way that Java and XML complement each
other. I mentioned earlier that XML will be crucial in the next few years.
Java is an object-oriented language, ideally suited for expressing state and
behaviour. XML, on the other hand, is what might be called a data-oriented
language, which concerns itself only with state. Among computer languages, it
is perhaps closest to SQL in this respect. In any case, Sun has set to with a
will to cement XML to Java as firmly as it possibly can, by publishing
specifications, giving away tools, and whatever else it takes. Much of the
hype behind Java has died down now and companies can get down to some serious
work.
However, last year Java had little viable competition, analysts were aware of
the Microsoft.NET initiative, but little more could have been predicted. Now
we have a much clearer picture of Microsoft’s response to Java.
My conversations with users and analysts suggest that Java is still ahead as
a technology, but simply because of its perceived openness. We will see a lot
more competition between Java and .NET in the years to come.
Security
Security has been creeping up the list of IT priorities over the last five
years. There can be no doubt that e-business has elevated the profile of
security. Relatively trivial breaches in e-business security can have massive
implications for a company, ranging from negative publicity to massive drops
in share price. This direct link between security and the boardroom makes IT
security one of the top priorities for IS departments.
To give you an example Stephen, each year Xephon does a survey of IS Plans
for Fortune 500 companies. In 1998 security was the seventeenth most
important priority - in 2000 security was the fourth most important priority.
As computing moved beyond the traditional centralised data centre, it gave
users the potential of greater productivity, functionality, and convenience.
However, along with these advantages, distributed computing has exposed companies
to a much greater vulnerability. The level of exposure has increased, while
disaster preparation has decreased. The newest areas of risk are the Internet
and intranets.
To give you an example of the increased vulnerability of web-enabled systems,
consider the development of viruses. In the early 1990s, executable boot
sector viruses such as Jerusalem, Cascade, and Form took three years to gain
critical mass and are estimated to have caused $50 million of damage over
five years. In 1995, the Word Macro virus, called Concept, took four months
to achieve critical mass, and caused $50 million worth of damage. However, by
1999, the Melissa e-mail enabled Word Macro took four days to gain critical
mass, and caused an estimated $385 million of damage. A year later, the I
Love You e-mail enabled Visual Basic script took just five hours to gain
critical mass, and caused an estimated $700 million of damage.
One of the best ways of improving the integrity of a server platform is still
to move it to a physically secure area. Consolidation of workgroup servers,
usually carried out for economic and systems operations reasons, is drawing
processors into data centres. In the meantime, there is a countervailing
proliferation of Web servers which are physically dispersed and are
intrinsically insecure in themselves. Fortunately, the operation of
second-generation e-business systems is more likely than that of their
predecessors to be entrusted to IT professionals, which should improve their
security from a variety of viewpoints, including the physical one.
From a technological perspective companies need to consider firewalls,
anti-virus software, encryption, authentication, and digital signatures. But
security is also a human issue. It is important to make employee education
and awareness a high priority. A corporate policy, with top-level support
needs to be put in writing. On the same theme, a coherent and enterprise-wide
security policy is also very useful to establish some method of negotiating
on security between e-trading partners. The formalising of these issues is
one of the problems being tackled by the ebXML definition project.
The other crucial element of security is back-up. The number of organisations
without a proper back-up strategy in place is actually increasing. This is a
very worrying.
I think that, in the long term future, we might see a different approach to
dealing with attacks against security. We might see the development of
self-healing software. Although this is only in an experimental phase at the
moment, it does have the potential to change the way in which we approach
issues of security.
IPv6
At the beginning of last year I classed the movement to IP Version 6 (the
next generation Internet Protocol) as a medium- to long-term strategy. Our predictions
at Xephon suggested that there was a 75% likelihood of the industry moving to
the new protocol, but this was highly dependent on its acceptance by the
major router and operating system vendors. I am now more confident than ever
that a move to IPv6 will occur before the 2004 timeframe.
At the current rate of use the Internet Protocol Version 4 will run out of
address spaces around 2004. This will be a prime mover towards moving to a
new protocol. IPv6 will solve the address space problem, and will have
considerable benefits for multimedia applications, Quality of Service, and
mobile networking.
The specification of IP Version 6 has taken five years to develop, and to a
certain extent it is a technical compromise between several proposals. In general,
the IP Version 6 specification is technically quite conservative. The
designers tried to use the same paradigms as the existing Internet, keeping
in mind that the IP Version 6 Internet was to be an upgrade of the existing
Internet, not a completely new network.
But, I would strongly suggest that the industry should keep an eye on this
sector, when deployment starts things will move very quickly, so industry
awareness is key. The movement to IPv6 will not be a matter of choice. When
the available address spaces run out, we will have to move.
VoIP
As I mentioned earlier I would class the deployment of Voice over IP (VoIP)
as a medium-term strategy. There is no doubt that VoIP will prevail in the
long term, because, for most companies, the cost benefits will be impossible
to ignore. However, in the short term there are still a considerable number
of technical details to sort out, for example guaranteeing the quality of
transmission across the Internet is quite complex at the present and can
require some complex tunnelling. However, when IPv6 takes off these issues
will be reduced. The other problem at the present is that the marketplace is
still highly volatile with large numbers of IPv6 vendor mergers.
Therefore, it is likely that many potential adopters will stay on the
sidelines until there is greater clarity in the market. This is not to say
that it would be foolish to adopt VoIP at this stage, the companies that have
are experiencing considerable benefits. I for one would certainly recommend
limited deployment now at the departmental level. At the present I would not
recommend using VoIP for anything other than intranet and Virtual Private
Networks, there are still too many quality of service issues.
This does however highlight the importance of an enterprise’s network. It is
essential that companies focus resources on their networks, increase
training, and consider the future demands of multimedia, Voice over IP, and
Quality of Service. Among the major applications, users should expect IP fax,
Web-based call centres, and unified messaging will take the early lead and
find mainstream popularity in the business world. Investments in networking
technology should be made with these future issues in mind.
Speech recognition
This is certainly a technology to keep an eye on in the mid-to long-term
future. Many large enterprises are still cautious about the deployment of
speech recognition technology. There have certainly been some false dawns for
speech recognition technology in the past. There is a perception that this is
a technology with limited value in the enterprise or business context. I have
to say that this is really not the case.
To give you a couple of examples, many companies are experiencing
considerable pressure on their help desks and customer call centres. More and
more staff are needed to maintain a quality service, and this equates to
increased costs. I have seen several examples of companies using speech
recognition to obtain initial information from customers or employees. This
could be name and address information for external customers, or name and
department for internal help desk queries, which can then be used to populate
a screen ready for use by an actual operator. This initial information
acquisition phase can save minutes of operator time on each call. It’s quite
obvious that this saved operator time equates to massive financial savings
over the course of a year.
There is another hidden application for speech recognition technology. It is
possible to authenticate users through their voice print. The security
benefits of the biometric identification are enormous, and it is also
non-intrusive because there is no need to ask personal questions, or get the
user to remember passwords. Going back to the point I made earlier, this also
saves operator time, which again saves money.
The combination of speech recognition and mobile devices is a very important
area to watch in the mid- to long-term future. As the size of mobile devices
decreases the need to have a simple way of inputting data increases.
When this does come it really will change the face of IT. In the future, we
are likely to see new and innovative ways to interact with computing devices,
of which speech recognition will be one. Research by major companies in this
field such as Microsoft and IBM is likely to yield results, which will
benefit all users.
Agent technology
Last year I did not cover agent technology at all. This is another technology
sector that has had false dawns in the past – normally the result of misinterpretation
by the press. There are a couple of factors would cause me to include this
technology in this review.
The volume of information with which IT professionals are bombarded is
enormous, and this is a situation that is only going to get worse. Research
at the close of 1999 indicated that the number of Web pages had broken the
one billion mark, it is now almost double this number. It is becoming
increasingly clear that we need some means of sorting and acquiring useful
data, which is one area where agent technology will be useful.
The other factor which has changed since last year is the wider use of XML
across the industry. Much agent technology is going to be dependent on XML
and other standards to allow data to be assimilated in a consistent manner.
The wide variety of legacy and new system technologies, and operating
platforms currently in use worldwide is the central issue affecting the
distribution and uptake of agent software applications is.
Agent technology has been around for many years, but I think the number of
vendors who will develop the technology will show a marked increase in the
short term future and I think that in the next couple of years we will see
individual users take increasing advantage of agent technology.
Agent technology has huge potential, especially with regards to the Internet.
As yet, no single agent has been sufficiently developed to gain widespread
acceptance, although there are a number of products in development around the
world. The applications for agent technology range from the personal to
enterprise level. Just watch this space!
Consolidation
Consolidation and integration are big issues in all sizes of organisation at
present, many of our largest customers are drawing LAN servers and
departmental systems back into data centres, while we are aware that smaller
organisations looking to reduce costs by consolidating a smaller number of
departmental machines.
The management overhead of running many small servers is staggering -
especially when you consider the perspectives of systems management, manpower
and environmentals (by which I mean floorspace, power consumption, etc). When
you consider that the cost of staff is one of the highest overheads that a
company has to sustain there are significant cost benefits in consolidation.
The vendors are supporting this by releasing some very powerful hardware and
software combinations. For example in the third and fourth quarter of 2000 we
saw IBM release the z/900 enterprise server mainframe with the ability to
consolidate potentially thousands of smaller servers, we saw HP and SUN
announce their new high-end UNIX servers, and we saw Microsoft release its
DataCenter offering which combines both a hardware platform provided by a
third party - such as Fujitsu, Unisys, Compaq or Stratus with the resilient
DataCenter software.
Consolidation is the real issue at the top-end of the industry. Anything
which does not run 24x7 is a toy. Rebooting is not an option.
Storage
The spread of the Internet, multimedia, and new digital applications are
creating a massive demand for storage. Throughout the 1990s, the areal
density has increased at 60% or more every year, and similar density
increases are expected to continue for the next decade. Densities have been
shown in experimental situations to exceed 56 gigabits per square inch, while
track densities have exceeded 70,000 tracks per inch.
It has long been thought that something called the super-para-magnetic limit
would appear between 20 and 40 gigabits per square inch. This is the point at
which magnetic media become unusable because the tiny magnetic spots which
represent bits cannot maintain their correct orientation because adjacent
bits exert too much influence. This would render data unreadable and corrupt.
This hypothetical barrier has not yet been reached, and highly advanced Giant
Magnetoresistive heads are expected to extend areal densities up to 100
gigabits per square inch. Those of use who study technology futures have been
aware of alternative storage technologies such as a holographic storage that
have been waiting in the wings, but these do not have long to arrive in the
market place given the rapid and continued progress of magnetic storage.
However, from an enterprise perspective it is likely that magnetic disk drives
as we know them today will remain the principal means of information storage
for the foreseeable future.
You may be wondering where this is heading. High density one inch disk drives
could create a new generation of portable devices and appliances, and even
wearable computing devices. Again this is something that is going to change
the way we perceive ‘computing’.
Data
We must remember that it is data, not computation, which is the basis for
nearly all the strategic value created by IT today. Data has been called the
DNA of the information age.
Data and its conversion to knowledge is absolutely crucial, especially for
companies in the e-business sector. I have mentioned before that close
business integration is a key element that IT organisations will have to deal
with. The most important asset of businesses will be the information that
they hold. The principal area of competitive advantage in which companies
will be able to distinguish themselves will be what they do with this
information. The collection, management, and analysis of this data will be
the key areas of competitive advantage. Data is not just a technology issue,
it is a management issue.
Companies need to have a data management policy in place, which considers how
raw, low quality data is converted into useful business information.
Companies need to review how behavioural information about visitors is
collected, using cookies, search engines, and on-line registration forms.
They also need to define business rules for the collection and integration of
data.
Sales patterns and trends can be analysed using data mining and OLAP tools.
The massive industry interest in e-commerce is causing a vast array of
products to be created to fill industry needs. It will be essential to
constantly review this new technology and see what emerges for the Web. And
finally, companies need to integrate low- quality data collected from the Web
with their higher quality enterprise data to extract business information. In
the information-based society of today, data is our most important asset.
System management
I think that this is going to be another key area to consider, because of the
rapid explosion in the number of distributed systems that companies now have
to manage, things like Web-attached resources, databases, remote devices, and
so on are a serious management problem.
The approaches to system management are divided between using frameworks and
best-of-breed solutions. Tivoli Enterprise and CA Unicenter are currently the
main contenders in the ‘total system management’ market. Along with other
popular management products, such as HP’s OpenView, they strive to offer a
complete solution for managing devices, networks, applications, databases,
and other ‘objects’ in a consistent manner. But it is essential that users
evaluate whether using a total management product is the right approach to
the problem, or whether they should concentrate on building their own
frameworks using best-of-breed components.
There are trade-offs between the two approaches, which need to be considered.
There are considerable problems associated with imposing a total management
system on what is often a multi-vendor infrastructure. Many enterprise-wide
solutions can prove unwieldy and have difficulty adapting to evolving IT requirements
at the department or local site level. Specialist tools can enable a modular
approach, allowing changes to be accommodated quickly and efficiently, at a
pace controlled and dictated by the systems manager. But all too often they
are poorly integrated with other systems.
Business to Consumer e-commerce
This is a market sector that has gained considerable early publicity because
of the highly-inflated values of some e-commerce company valuations. As we
have seen, the economic viability of some B2C e-commerce sites is somewhat
dubious which caused the market to crash.
Making money selling an increasingly commoditized product in a highly
competitive market means differentiating that product from everyone else's,
whilst keeping cost of sales as low as possible. It can be done by
integrating products to offer a fuller service, and by making them easier to
buy. Using the Internet to add value to products and for e-commerce is key,
but, for many businesses, the costs of implementing a worthwhile e-commerce
strategy seem overwhelming.
Physical companies with real-world outlets, brand awareness, and exiting
customers have a considerable advantage in providing an additional outlet for
the their existing customers and attracting new customers. By a process of
Darwinian survival of the fittest many of the early B2C e-commerce companies,
the dot coms, have come unstuck, more and more of the so called ‘Clicks and
Mortar’ companies have gained market share in the B2C e-commerce area at the
expense of many of the pioneering e-commerce companies.
If companies wish to implement a B2C solution, they should, identify the
business objectives before starting, ensure key senior business champions are
committed to the project, create a skilled project team combining both
business and IT skills, and consider the legal and security requirements.
Other points to consider are the fulfilment capability, the deep integration
with back-end databases and inventory, the use of legacy systems for Web
applications, and the relationship between existing sales channels and the
on-line business. E-Business is not just a ‘front-end’, it fundamentally
alters the ways in which a company operates.
The B2B market
Last year the predictions for growth in the B2B (Business to Business) e-commerce
marketplace were massive. From what I recall the predictions from analysts
for the future size of the market ranged from several hundred billion dollars
all the way up to $7 trillion by 2006.
The result has been that a host of start-ups have been trying to position
themselves in the B2B arena, in preference to the B2C sector. As I predicted
this caused the same kind of fragmentation and overcrowding that impacted on
the B2C market. As the market becomes more crowded the likelihood of
companies carving a successful niche become less favourable.
e-procurement is still one of the most important components of B2B
e-business, simply because almost all companies can benefit from the cost
savings. The goal is to electronically link the entire sales, production, and
delivery process into one seamless flow of information. Having a global view
of logistic movements enables better decision making, reduces costs while
providing the means for sharing information among trading partners. This type
of visibility and collaboration provides massive cost benefits along with an
improved ability to react to customer requirements.
However, there are problems with e-procurement. Having spoken to many
implementors I can say that it may take years to fully realise the benefits
of e-procurement, and often this can only be achieved through the
transformation of company policies and processes. There are considerable
rewards but the risks are high. I would advise companies to look closely at
the opportunities for using e-procurement, but the vendors figures for ROI
should be viewed with caution.
This has been quite a detailed list, but I think it gives a flavour of the
principal issues that professionals need to think about. As you can see the
themes which we talked about last year have not changed radically.
Q: How do you see computing technology evolving in the short and long term
and what recommendations would you make for IT professionals and companies to
best prepare for the changes to come?
If we consider the technology directions I mentioned earlier, it is clear
that there are a wide range of new technologies which are driving IT into
every area of commercial and even domestic life. But the raw technology is
outpacing our ability to manage it within a structured IT environment. I see
this need for management as the key challenge in the near-term future for the
IT industry.
It is a paradox but in the medium- and long-term I would suggest that we are
going to see convergence of technology. We can see this already at the hardware
layer, with the convergence of computers, phones, and consumer electronics.
At the application layer we see the convergence of information,
communication, commerce and education. If you look at the technology
directions I mentioned many are interrelated. Developments in speech
recognition will be complemented by developments in VoIP, and IP version 6.
Furthermore, enhanced security, storage, and optoelectronics will provide
building blocks for highly advanced network technology, with a universal voice/language
interface. And all of this will be supported by standards that allow these
technologies to work and inter-operate. And it is this that will support the
e-society of the future.
To get back to the short term - companies need to prepare themselves by
analysing their business processes, simplifying these where necessary, and
devote resources to creating internal departments with rapid-response
capabilities to monitor and quickly respond to technological change. This is
where the development of close associations and partnerships with analyst
organisations like Xephon will provide competitive advantage.
***
Q: Consider this a blank slate. Please make any statements or comments about
the IT field unedited and unrestricted?
Stephen, I would like to take the opportunity to say a few words about IT
skills in general. This is something which is causing considerable concern in
the industry. Every year at Xephon, we undertake a major survey of IT
managers, to determine their key priorities for the year ahead. In the last
three years of the IS Plans Survey, we have seen the problem of finding, and
retaining, staff with the right mix of technological and business skills
becoming more critical. In 1998, 66% of respondents considered the skill
shortage to be a problem. In 1999, it rose to 75%, and by 2000, this figure
was up to 78%. This number is set to rise again this year.
This skill shortage is becoming acute. It must be dealt with at all levels.
We need to encourage more IT related activities in schools at a younger age,
and we need to improve the public image of IT, which seems to sway between
being the preserve of ‘geeks’ or high-flying consultants, rather than being a
real job for real people. We can do more now, as well. We need to encourage
more women to move into the IT industry. This is still a very male-oriented
industry for which there is no reason apart from social perception and
tradition. Because of the rapidly changing nature of IT, we need to adapt the
skills we have in the industry and develop them further. This is where the
need for lifelong learning and online learning become crucial.
Today we are the vanguard of the e-society. We may not realise this but this
is a historical time for the IT sector, in five years we should begin to see
the early indications of how the interconnected, e-society will look. It is
those of us in IT who will be the back-bone of this new approach to what it
is to be a community.
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