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The Bloor Perspective: The cost of downtime, the perils of patents and more on eprocurement
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: the real cost of downtime; software patents; and more support for e-procurement

By Bloor Research

Published: Monday 15 November 1999

The cost of downtime for an ecommerce organisation is notoriously hard to quantify. Downtime has a measurable impact on the stock valuation of ebusinesses, and for an ebusiness market confidence as portrayed by the share price is a big factor in attracting further resources for expansion. Sink too low and the inevitable Catch-22 sets in - you must grow to increase stock value, but you can't attract the investment until the stock value starts increasing.

eBay has suffered very obviously from the unpredictable nature of its systems, at one time having $4bn wiped off its value in two days. It is reported to have invested heavily in a new parallel recovery system that will enable a return to normal service in the event of the primary system failing. But this is not a "hot standby" mirror that will present a mere glitch to its users - it could take from 15 minutes to more than an hour to effect a recovery.

Zero downtime therefore has to be the ultimate goal, and it should form a critical part of a company's business model. Continuous availability technology is available in the form of fault-tolerant hardware, Unix clusters and mainframes which can all show an impressive number of 9s in the availability percentage. But it seems that such goals are only achieved when the penalties for failure are severe.

In the world of ecommerce, the organisation that provides the right service will win - and service includes continuous availability. If it is not cost-effective for an organisation to run its own continuous-availability environment, then it should investigate running the service through an ASP that offers a guaranteed service level instead of settling for an inferior inhouse service. For dot-coms in the planning stage the target should be zero downtime, and for existing ebusinesses, migration to a non-stop environment should be a priority.

However, to make life possible for restricted-budget organisations, we need to see a growth in the number of ASPs that offer availability guarantees at an affordable price.

Burn your GIFs: loosen the software patent chains

"Burn GIFs day" was the most visible indication of concern over software patents (see http:/www/silicon.com/a33741 ). Unisys has demanded $5,000 for use of the GIF format that incorporates patented software technology. Webmasters are rebelling with a campaign for the abandonment of the format. Concern is growing over US software patent activity.

Early Web sites depended on the GIF format for the inclusion of images on Web pages. GIF depends on the LZW compression technology developed by Unisys more than a decade ago. There are other image formats such as JPEG and the format created specifically to resolve the GIF issue and Portable Network Graphics (PNG). PNG is a superset of GIF capabilities in most respects, except that it does not support animation. PNG claims better colour resolution and better transparency. It is also based on open source software and is free of licence issues.
The wider argument is whether permitting software to be patented is harmful to innovation. Although it has been widely argued that patents in software are damaging, the US has been allowing around 30,000 software patents every year for the last decade. With hundreds of thousands of patents in force, it becomes especially difficult for small software companies to be sure their new developments avoid patent infringement.

The European Community has been much more cautious about permitting software patents, and is still discussing the issue. The US is exerting pressure to allow software patents and has already been successful in persuading Japan to move in that direction. A vigorous campaign is running to discourage Europe to move in that direction. A source of information is http:www.freepatents.org.

In our view, the granting of patents for small pieces of software is likely to be damaging. Given the formal nature of programming languages, it is quite likely that independent developers will come up with the same solution to a problem. It is unreasonable that the first person to code a problem be able to patent it and thereby hold a monopoly. There has been no study to show the economic effects of software patents, but at first sight they would appear to be harmful and damaging to innovative developments.

Better buys online

Procurement has become one of the hottest areas on the Internet as companies jump at cost-saving opportunities. Computacenter this week joined the fray, forming a business to business e-procurement system with partner Computasoft. The new launch, named Biomni, will offer anything from paperclips to server class computers.

Computacenter is building on its On-Trac system, originally built back in 1991 to support online purchases by customers. The new Internet-based venture is open to other suppliers, even those that offer similar products to Computacenter. The initiative is with the customers, who can decide to deal with the supplier of their choice. Clearly, customers are enabled to take their business away from Computacenter, but the move is seen as defensive. Market places are springing up rapidly, and Computacenter saw the creation of their own system as the best move.

Individual ecommerce ventures from companies like Dell and Cisco have been hugely popular. But most companies are looking for one-stop market places where a range of products can be purchased and automated purchasing systems can be applied. The smartest market software supports the incorporation of many suppliers, while enabling continued access to individual supplier capabilities, such as Cisco's configuration tool.

The lack of a standard approach however has left purchasing relatively poorly automated. A rush of implementations of marketplaces on the Internet is creating de facto standards that permit huge improvements in purchasing practices. Automation makes it easier to adhere to purchasing policies, and to monitor their effectiveness. The time taken to complete a purchase is greatly reduced, leading to improved efficiency in the supply of goods. Unlike most innovations in IT, the trend to procurement is embracing companies across all industry sectors.

Biomni is illustrating the health of the Internet supply business by having already signed up 500 customers and 350 suppliers. With the present rate of activity, we expect that the vast majority of business to business transactions will be Internet based within just a few years.

Silicon.com will shortly be publishing an interview with Mike Norris, chief executive of Computacenter.

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