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NET.COLUMNS: 5 e-Business Trends

February 18th, 1999 · No Comments

The Internet and e-Business seem to go hand-in-hand
nowadays. Companies want to know how the Internet can be leveraged for
business, just as their counterparts in the US seem to be using
it. This column explores five key trends which provide the background
for enabling e-Business in the Internet Age.

The Death of Distance

In a landmark Economist survey a few years ago, the author talked
about how geography was becoming irrelevant in telecom. The Net is
making this more so. While voice telephony itself has not much
affected much so far in India, email has made it so much more
convenient to keep in touch and conduct business with customers
worldwide. Internet telephony will speed this process, and will be
beyond regulators. The Net cuts through barriers imposed by space and
time. Businesses in India have to brace up for competition from
everywhere. At the same time, it opens up opportunities for Indian
companies to do business internationally. The world is becoming more
of a village, than ever before.

The Exchange Economy

A recent article in Fortune magazine talks about “infomediaries”,
online exchanges that link buyers and sellers by effectively
distributing market information. It says that infomediaries are a
cross between electronic catalogs, efficient marketplaces that greatly
reduce transaction costs, and content libraries, which help companies
make purchasing decisions. This trend will impact many businesses in
India, as the Net becomes the electronic meeting and trading
place. The combination of content, communications, community and
commerce is the foundation on which an infomediary will be built. This
is a big opportunity area in India: set up infomediaries for vertical
segments.

The Net as your Intranet

In India, as I have mentioned in earlier columns, the killer
application for corporates is e-mail. Limitations on wide area
bandwidth and high costs will make it easier for companies to
interconnect their offices in different locations via the Internet
than through their own network. The Net effectively becomes the
corporate Intranet server, seamlessly merging internal and external
information. Just as portals like Yahoo and Excite offer utility
services like email, chat and calendaring, companies will use these
services within their organisation, but served off the Internet. This
will allow access anytime and from anywhere. All that will be required
is a Web browser on the desktop.

The Powerful Consumer

As information dissemination via the Net becomes easier, more
companies will put up greater information on the Net. The result:
power to the consumer, who will easily compare product/service
features of competing products. One area where this is already
happening is banking, where sites offer comparisons of interest rates
offered from different banks on a single page! There will be an
increase in such comparator sites in India. Combined with the other
trends, it means that the future battles will be based on price and
service, not physical proximity to the customer.

Content meets Distribution

An interesting point was made by management guru CK Prahalad at a
seminar recently. India’s telephone connections may be 15-20 million,
but access to telephony is higher by a factor of 20-30, if not
more. PCOs have succeeded in taking telephony to the masses. Similarly
for the Internet. While abroad the ratio is nearly 1:1 between access
and connections, in India the access multiplier can become as high as
100 if we can set up a network of Internet kiosks (or community
centres) across the country. Cybercafes are the first generation
kiosks. They make Net access available without the need for a PC at
home or in the office. Building up a grassroots distribution system
via a network of kiosks (with, perhaps, a smart card payment system, a
regional-language browser and local content) will make Net access near
ubiquitous across the country within the next 5 years. What is
required: e-Services.

The Internet will have a much bigger impact on India than we can
imagine. We have to create our own business models; just trying to
replicate business models from the US is not the answer. And that is
where the opportunities of tomorrow lie.

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