The Bloor Perspective: The net and bad news, top tier vendors turn the screw and that international ebiz report

Autumn brings bad news more frequently than winter: strikes, bad weather, traffic congestion and delays. A columnist in the FT has conducted a study on the way enterprises use the internet to deliver and manage bad news.

The web can be used to provide a certain level of service here. It can mitigate the problems arising from volumes of phone calls, failure to receive a response or even to 'get through' which exacerbates the dissatisfaction with the level of service. Features such as mobile text messaging, alarms and alerts will at least provide an active means of updating those affected.

How the web is used varies. Some enterprises use one-off static notices. Others use notice boards with instantaneous updates of information relating to an event. Weather, traffic, rail and air travel all lend themselves to this form of broadcast.

Only a little over 50 per cent of the population have access to or are predisposed to use the internet but it is still a significant market through which to deliver and manage bad news. It is ideal for registering claims and complaints relating to compensation arising from events, at least of a routine and unambiguous nature.

Is a soothing voice better for addressing bad news events? Perhaps, in distressing events such as injury and loss of life, it is. For other events the customer care representative increases the level of annoyance and irritation through detached, rehearsed, monolithic responses.

Some enterprises would rather restrict the use of their sites to sales, promotional and 'joyful' events. It is better to have no information on the site than poor quality, stagnant information. Despite some very apparent advantages, its use for conveying and managing bad news will continue to be sporadic and patchy in value.

*Top tier performs*

Further proof has emerged to back the theory that the integrated software and service providers are gaining market share on the specialist, point product providers. Dataquest has just completed its assessment of the market and concludes: "Top tier software vendors are gaining revenue share at the expense of the pure-play vendor."

There are many reasons for this situation - top of the list is the economy. In these days of weakened profit margins and slow to market projects IBM, Microsoft, Oracle and SAP and Microsoft are better equipped to weather the storms. They have big cash reserves to bolster marketing efforts, squeeze the last drops of budget out of a flat market and have a slew of products to sell.

The point product providers are finding themselves squeezed in a vertical market but that doesn't explain why the customer does not vote for them. It's a simple vote of confidence. Point products are great but if you can have your preferred vendor deliver a suite of products, cheaper and faster, then they're going to win. Add the increased possibility that a point player is either going to go bankrupt or be acquired and suddenly the battle is looking rather one sided.

Do customers want specialist, best of breed products that deliver far more than the alternative? The alternative is the over-arching solution from one vendor that touts generic, good products.

On the one hand, the best of breed products are obviously a better idea. They're more powerful and it's better than putting all of your eggs in one basket.

Then there's the other side of the story which says that if you choose a solution provider you can get decent solutions quickly implemented.

The fact of the matter is that people will choose a range of applications from a range of vendors but, increasingly, the solution providers are winning the lion's share. It's been happening in the enterprise space for years. The independents have always been able to stand up and say, my product is better - they probably still can - but fewer people are listening.

That's not game over for the specialist product vendors. It's still a very large field out there. Worldwide spending on software through 2002 is expected to have grown to $76.9bn and could hit as much as $81bn through 2003, according to Dataquest.

*Ebusiness league...*

In a recent report, 'The World's Most Effective Policy for the e-Economy', Booz Allen Hamilton and the INSEAD business school examined Australia, Canada, France, Germany, Italy, Japan, Sweden, UK and the US using more than 100 selected criteria. These include the cost of broadband access, availability of television and other leisure services in digital form, businesses trading and available online within the country, households with access to online services, demographics, gender and the costs of services.

The results are not rated by nation but simply on the basis of age groups and households. Thus it is not possible to determine which countries are more wired than others. Actually, it does go half way by naming some of the top countries and leaving the others blank.

Predictably the US comes out top in the overall rating and the UK is, surprisingly, second when ranked and weighted according to undisclosed criteria.

Some results are predictable. Younger people use the internet more than older people and the number of households with access to the internet is growing steadily rather than rapidly.

In the UK nearly 90 per cent of 16-24 year olds have accessed the internet at some time. This declines to under 20 per cent of those who are 65 and older. However, over 50 per cent of those under the age of 55 have accessed the internet at some time. Of course, this does not reflect the amount of time and variety and depth of use in any group. In all age groups, men have accessed the internet more than women but only marginally.

The proportion of households with access to the Internet has risen from just over 15 per cent in 1999 to 45 per cent by the middle of 2002. The figure came to a plateau in 2001 but has risen by 10 per cent from 2001 to just over 45 per cent by the middle of 2002.

The report will apparently be used by the countries who participated to improve the ebusiness environment, particularly in the area of regulation and public services availability, and as a basis of how and where to encourage more extensive use of the internet.

**Bloor Research is a leading independent analyst organisation in Europe. You can find out more at http://www.bloor-research.com or by emailing mail@bloor-research.com .