The Bloor Perspective: a year in review

Nineteen ninety-nine has been an interesting year. Ecommerce now virtually underpins the entire structure - both economic and social - of a large portion of the globe. One of the apparent gate-keepers to this new world, Microsoft, has found itself under massive threat from a variety of sources.

With Microsoft, the problem is essentially two-fold - Linux and the DoJ. Microsoft is learning a hard lesson with Linux, namely that there is more to life than product marketing. Clearly the Windows NT versus Linux debate will run on and on - particularly with the launch of Windows 2000, which will see a significant number of additional features to the operating system (not least its ability to be reconfigured without being rebooted, which has long been the bane of NT systems administrators).

But despite Microsoft's protestations to the contrary, Linux has many compelling arguments - it is, above all else, free and capable of supporting a wide range of uses, although it is clearly not suitable for everything.

That doesn't mean that it will eventually oust Microsoft from the operational heartland of every organisation, however. If you look at the facts, Linux is currently high-fashion in the computer industry and high-fashion usually wins the day.

** Piling on the pressure **

Unfortunately for Microsoft, this is probably only a minor problem in comparison to other events over the past year. The DoJ case could have a much more devastating impact. Taken in their entirety, the findings of Judge Jackson make very interesting reading. They indisputably come down heavily on the side of the US government and against Microsoft - stating that Microsoft is a monopoly and that Microsoft made it difficult for Windows users to run any browser other than Internet Explorer.

Our own view in this matter is simple and agrees with other parts of the findings - that Microsoft is a monopoly because it is able to maintain an artificially high price for its Windows OS and that this is detrimental to the consumer. We have watched the decline in PC prices and we have noted that the only component which is not falling in price is the OS and that this is sustainable only because Microsoft has maintained a monopoly and driven competition away.

However, there are a whole series of emotions in play at the moment. We should not lose sight of the fact that it is not in any way illegal to compete aggressively (as Microsoft does) and neither is it illegal to be able to deploy superior financial resources in order to be victorious in competition (as Microsoft has done).

However, Microsoft's conduct over the past few years has damaged a number of organisations and now that harm is being relayed back to the company itself. Microsoft is now a wounded corporation and with more blows looking fairly imminent, it needs to act quickly to stop the hemorrhaging.

** The early bird doesn't always catch the online worm **

None of this is likely to stem the flow of companies into the ecommerce space, although it may mean they have better technologies to help them achieve their goals. The big problem facing market watchers is getting an accurate picture of events in the ecommerce field. Projections and predictions made prior to 1998 have all proved inaccurate, because there was a sudden and rapid increase in commercial activity on the Internet in the US in 1998, with commercial activity growing at about 8 per cent per month. This is undoubtedly a pattern that has continued throughout 1999.

This year we have witnessed a considerable shift in the way ecommerce is implemented. Initially it was a very sales oriented concept - everyone trying to sell their wares at discounted prices. But now the switch has been made into procurement - with both sales and purchases playing a very big part in the 'e-revolution' - and that has speeded things up considerably.

Next year though, once the Y2K furore has abated, it is likely that we will see an enormous push into ecommerce by companies that have perhaps been regarded as late starters, or of having ignored the Internet phenomenon. It could well turn out to be the defining year for the future of ecommerce as budgets and constraints are lifted and companies finally start implementing their ecommerce strategies.

True, many people do argue that organisations coming into the market next year will be too late to catch the wave, but it may not be as big a problem as some predict. Companies coming into the game in 2000 have had the benefit of watching the Internet take shape, without incurring the costs and taking the knocks that many of the current leaders have experienced. If they have learnt from this and have planned their operations carefully, then there should be nothing to stop them also having a huge impact.

Certainly there will be some companies that are so entrenched in the Web that they may be immovable, and if Internet time is as fast as everyone thinks, then their life-cycle is probably due to be challenged. And this will leave plenty of space for the newcomers.