B2B Update

Forbes has a special report on the world of B2B (business-to-business ecommerce). During the Internet boom era of the 1990s, B2B was the magic wand that would change everything. Then, the buzz faded. Now, it is making a comeback as a “basic business tool”. From the introduction:

What many of the early B2B cheerleaders failed to graspand what the Rayovacs of the world are grappling with todayis the fact that pricing is merely one element in the highly complex relationships along supply chains. Reliability, speed and innovation matter toobut in as many different ways as there are companies.

Make no mistake, though, the B2B revolution is happeningjust not on the terms originally envisioned. Instead of upstart exchanges taking the ramparts, industry incumbents are leading the charge. Firms like Wal-Mart, Dell and Cisco are nudging, and sometimes forcing, suppliers to make nitty-gritty changes that are glamorous only when they reach the bottom line.

But reach it they can. The technologies that companies install to communicate with their partners can reduce supply chain costs by half, says the Yankee Group. That helps explain why companies are increasing spending on such technologies by 100% to 150% annuallyeven as they cut back on overall information technology budgets. In fact, B2B commerce has actually grown despite the bursting of the stock market bubble that once surrounded it. Worldwide, e-business activity is to grow five-fold in three years to $1.4 trillion in 2003 and then is expected to nearly double again to $2.4 trillion next year, figures e-business research firm Emarketer.

From the Small Business section: “The Internet and Web-based technologies have been a godsend to many small businesses. Best-of-breed efficiencies and unparalleled market breadth are now within reach, and technology providers are chomping at the bit to meet the demand. In 2003, small businesses like Art’s Trucking and Debbie’s Bridal Boutique are expected to spend $161 billion on information technology, according to InStat. And this is just the beginning. Some 70% of small businesses still lack even a simple Web site.” The four sites named as Best of the Web are:
EBay Stores
Microsoft BCentral
Staples.com
Yahoo Small Business

Virtualisation

ZDNet UK discusses “advances in virtualisation technology mean servers no longer need to be tied to a particular piece of hardware — they can be backed up or moved from one machine to another in the same way a file is copied from disk to disk.”

Now, virtual server products of considerable sophisication, such as VMWare’s ESX Server and Microsoft’s Virtual Server (purchased from Connectix), are getting close to the ideal, where a server’s physical resources can be set up to create a number of virtual servers that appear to all intents and purposes to be running on different computers. They can have their own IP addresses, see disk and memory resources as theirs alone, run their own operating systems and act autonomously. One piece of hardware can run a mix of Linux, Windows, Unix or whatever, each instance operating as a full computer in its own right.

The primary advantages of this approach are scalability, reliability and efficiency which boil down to saving money without sacrificing capability. Because a server is no longer tied to a particular piece of hardware, it can be backed up or moved from one machine to another pretty much as a file is copied from disk to disk. Adding extra processors to SMP machines, increasing memory or disk space, upgrades all the virtual servers running on those machines, and multiple servers can easily be coalesced onto one machine.

As with storage and networking, virtualisation decouples hardware from software, and software from data, so that the only thing that matters is what you want to do, not where you want to do it. We are moving at some speed to a computing world where the limitations of local resources are removed and interconnection, rather than physical compartmentalisation, defines IT’s potential.

Virtualisation could be quite useful for small businesses also. Imagine a single server running Linux and Windows (OS and applications) remotely managed with thin clients on the desktops. This can make computing affordable to everyone.

More on Project Green

News.com writes on Microsoft’s Project Green to create software to map out business management applications.

Microsoft is linking the release of major new versions of its business management applications to the debut of the next generation of its Windows operating system [Longhorn, scheduled to ship in 2005].

By spending nearly $2.5 billion on buying United States-based Great Plains and Denmark-based Navision, Microsoft set itself up to compete in the market for wide-ranging software packages designed to automate corporate bookkeeping, human resources and other business tasks…While the two major acquisitions propelled Microsoft into that market, they left the company with a patchwork of software products that operate on different technologies and that cannot easily be made to work together. Project Green is designed to meld that patchwork into a single set of interconnected applications, with Microsoft rebuilding the software on its own technology.

In the meantime, Microsoft is readying a slew of new software that’s aimed at product manufacturers. One, called Demand Planner, is designed to help companies coordinate their production activity, using sales forecasts and other market data. The software will be available by the end of this year, according to Mike Frichol, a Microsoft Business Solutions general manager.

Also set to debut is Microsoft Business Network, a software hosting service that’s designed to help companies shuttle inventory, shipping and order information to trading partners via Internet-based technology.

WiFi Opportunity

News.com has an interview with NetGear CEO Patrick Lo. A few excerpts:

There are two things we think are going to happen. The newer digital devices–I’ve already seen some models like high-definition digital TVs in Japan–will come with Wi-Fi. You could see it because you know TV and cable are going digital so you know those are going to have Wi-Fi built in. That can similarly be said for Internet radios, which are digital devices that not only can receive broadcast channels, they can also receive digital channels from the Internet. This is a new generation of digital devices, which will come with built-in Wi-Fi.

But again, there’s a huge retrofit market. You could retrofit back for digital devices, such as gaming consoles, TVs and ordinary radios, using a digital media adapter so you can retrofit the old analog devices to connect to the Internet. We believe that will become big next year.

Wi-Fi is evolving from “b” to “g” to “super g,” so from 11 megabits to 54 megabits to 108 megabits per second. But that’s not the end of it–you will continue to see higher speeds and more features.

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Google News Creator Interview

OJR interviews Krishna Bharat. Some excerpts:

There’s a whole field of study called “information retrieval,” which deals with text analysis — trying to find which documents match the query, which documents match other documents. So I drew on a lot of technical work that I knew of in order to make this happen. I had to bring in a lot of intuition specific to the news domain to try to bring in diverse articles.

The nice thing about research is until you actually make a product, you just want to find out if it works. In the long run, the issue of rights had to be addressed. In a sense, it was a no-brainer because what we do fundamentally at Google is we take people to the content — and this is another way to take people to the content. We don’t manufacture content. We don’t substitute our content for theirs.

We want to create a newspaper that’s suitable for everyone. Personalization is a much grander challenge.

Google News is one of those ideas I wish I had done after Samachar.

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TECH TALK: SMEs and Technology: Characteristics

Before we get to discussing how the new technologies can help the small- and medium-enterprises in emerging markets (SMEEMS) become more productive, let us discuss the characteristics of these organisations. They are the third tier of the enterprise pyramid, behind the large companies and the SMEs in the developed markets, from whom they are quite different.

SMEs are not very IT-focused. For many, IT is an after-thought. Part of the reason is that these enterprises do not necessarily have a dedicated IT department. Most of the decisions are made by the owner-managers or the finance people. As such, the use of IT is limited largely to some of the four basic needs email, productivity applications (word processor and spreadsheet), accounting and a website.

SMEs are hard to reach. They are small and distributed. While it is easy to get to the large companies (and for the large companies to get to the IT vendors), SMEs are a hard market to crack.

SMEs tend to still follow processes which are largely non-electronic. Because the organizations are small, the business knowledge is more tacit than in digital form. People, especially the senior management, know what is happening (and all that needs to be known). This also concentrates decision-making. So, ITs role needs to be to assist in this decision-making process.

SMEs need more hand-holding and support, and thus can be very demanding customers. This is because they may not necessarily have trained in-house IT staff. At the same time, their ability to pay is quite limited. Hence, as customers, they have been an unattractive market for the IT vendors.

The most important issue facing SMEs is business growth. They have a fairly close tab of the expenses, so there is little room for optimisation there. The challenge is to generate new business, and manage that new business with the same (or incremental) staff so as to maximise profitability.

It is not easy for SMEs to educate themselves about new technologies and the impact they can have on their business. While there are all kinds of training institutions for computer languages and software packages, the one segment that still has been addressed on the training side is the business applications of technologies.

SMEEMS are further characterised by an even lower ability to spend. They typically need solutions which are a fraction of the cost of what has been available so far. In the case of hardware (computers), SMEEMS have a low PC penetration. On the software front, piracy and non-consumption are the two extreme options available for them. In fact, for most SMEEMS, the cost of software is zero.

Even though technology has evolved a lot in the past few years, the IT infrastructure within SMEs has changed little. While historically, SME technology adoption has lagged that of big business by 3-5 years, this slowness in usage also needs to be understood in the context of the twin traps that most SMEs are caught in: a technology trap, and a marketing trap.

Tomorrow: The Twin Traps

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