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The Bloor Perspective: Home networking, SMEs and Y2K, and making money from the Web
Industry guru, Robin Bloor, and his team of analysts cast their eyes back over the latest top stories to hit the industry. Under the spotlight this week: another attempt to get us to wire-up our homes; why SMEs will suffer come January 2000; and why building a Web site is not a technical issue

By editorial@silicon.com

Published: Sunday 17 October 1999

Some concepts refuse to die, even when they don't succeed first - or second - time around. The networked household is one of those ideas that sounds as though it should catch on, but somehow the timing and the technology has never been right.

A year ago, Compaq was expecting to deliver all new domestic PCs with a built-in networking capability by the beginning of 1999 - but then other events took on a higher priority.

Now, just when it seemed safe to assume the initiative was dead, we had two related items of news appearing on the same day:
* Fujitsu is to start shipping a HomePNA (Home Phoneline Networking Alliance) PC Card in November with a probable price-point of around $100
* Ericsson and Electrolux are to co-operate to produce Web-connected kitchen appliances.

The HomePNA standard allows PCs to be connected over the domestic telephone infrastructure to avoid the cost and inconvenience of recabling. The standard is somewhat limited by the maximum data transmission speed of 1Mbps, making it suitable for sharing modems and other peripherals between PCs, but not really for frequent sharing of executables or other large files. A 10Mbps version (HomePNA 2.0) seems to be some way off and likely to be more expensive.

But something important was missing from the announcements. In all of the information from these companies I've found not a single mention of Sun's Jini initiative, which was supposed to be the de facto protocol for interfacing diverse intelligent devices such as this. If it is going to become the standard, it needs to be represented right from the beginning of this movement. Retrofitting standards is ten times as difficult as implementing them first time round.

But perhaps it's not too late - this could well be another home networking initiative that goes nowhere.

* SMEs to suffer Y2K fall-out *

Another spate of announcements - this time on Y2K - gave an indication of the likely winners and losers at the turn of the Millennium. First off, the UK Financial Services Authority (FSA) stated that all high- and medium-impact companies in the financial sector were on schedule to complete, or had already completed, their Y2K readiness programmes. In another announcement, a study by the Cutter Consortium found that 50 per cent of US companies were planning a spending freeze on IT equipment between now and the end of the year (see http://www.silicon.com/a33282 ).

In both cases, the companies that will be hit hardest are SMEs. Unfortunately, these are also the companies which lack the financial resources or in-house IT skills to evaluate the risk and deal with any suspected Y2K weaknesses.

Similarly, it is the SME vendors who are likely to be most affected by any spending freeze. Again it's a question of resources - the larger companies have both the financial know-how and the hedged funds to carry them over until the predicted thaw at the end of January next year.

Smaller companies do not have the luxury of digging in and waiting: most will survive but there will be plenty that do not.

* Ecommerce is not a technical issue *

Last week, the UK government announced that it would be including online shopping statistics as one of the sources of information it uses for its retail prices index, one of the principal measures used to determine inflation (see http://www.silicon.com/a33276 ).

This is a move which will be seen as overdue by some and maybe irrelevant by a few luddite diehards. But for the vast majority of organisations in the UK who have so far failed to use the Internet for anything more than brochureware - it cannot be ignored.

According to a recent Economist survey, the UK lags two years behind the US in exploiting the potential of ecommerce. That's one heck of a long time in dog years - the rate at which the Internet is understood to be moving. Plus, given the global nature of the Web, the issue becomes even more stark: by the time the UK gets there, the market may well already be sewn up.

This article does not want to spew out the usual FUD. Let's face it, we've heard it all before. "The Internet is here, embrace it or die." True or not, there's some good money to be made online - EasyJet, for example, has already sold over one million airline seats online. However, the question now is - what can we do to profit from the Web?

The answer to this question has three, mutually dependent components. At the top level they may be considered as:
* The business strategy covering, for example, how can I align my organisation to best profit from the Web? What products and services should I offer, and what markets should I target? Who are my customers and suppliers?
* The technical strategy - what are the most appropriate technologies to meet my needs? What can I use to implement something quickly and gauge the reaction of the public so I can move on?
* The operational strategy - how can I resource the 24x7 operation that my online service requires? Have I the necessary pieces in place to provide the best possible customer service?

All of points above need to be addressed simultaneously to make a success of the Internet. Too often, still, it is the technical issues that are tackled first ("Give me a Web site!") without giving due attention to the business and operational issues. Each of the above has a responsible party - the CEO, CIO and COO - who must work together to draw up a coherent ecommerce strategy.

There, that's it, now it's over to you. The intention here is not to scare or patronise. No FUD here, just a single question: does your organisation have such a strategy for exploiting the Web? If not, you may be resigning yourself to watching from the sidelines while others steal the rewards.

For more analysis from Bloor Research, see http://www.it-director.com .