Careers: Interviews
Dr. Jaime Kaminski
This week Stephen had a discussion
with Dr Jaime Kaminski, Senior Technology Analyst
and Technical Briefings Manager Xephon (http://www.xephon.com).
In this interview Stephen asked Dr. Kaminski to
comment on what he considers to be the most
"important" technologies and technology directions
that companies and IT professionals need to
consider, and how these have changed from similar
predictions made last year.
***
Q: Xephon is the world's leading producer of special
IT consultancy reports, professional journals and
international IT conferences. Jaime, can you
describe your involvement in the many services
provided by your organisations?
A: Thank you Stephen, for inviting me back. It has
been about a year since we last spoke, and it will
be interesting to review the industry.
As you note, Xephon has two principal lines of
business - IT publications and conferences. We have
been around for twenty-one years, providing
technical and market research which focuses
exclusively on information systems for large
enterprises. This research is made available a
number of forms, including over thirty conferences
each year, strategic consultancy reports, and
thirteen technical journals which range in content
from those devoted to MVS and NT. We also produce
numerous surveys, news reports, and strategic
bulletins. Our material provides value for all
levels of the IT organisation from the systems
programmers, to the CIOs and CTOs. It is this
breadth of coverage which really defines Xephon.
My role spans both of these business functions. I
started my work with Xephon with the seminar side of
the business. I was hired to put together
high-quality technical seminars and conferences.
This role rapidly expanded to incorporate analytical
research for publications, and original writing.
The deep integration of these two roles provides a
tangible benefit for our customers - we can rapidly
incorporate the results of our research into
seminars. But this is a two-way process: we are
continually listening to our clients’ needs, through
surveys, site visits, and from discussions at our
conferences. We use this information to direct and
refine our future areas of research.
***
Q: How did you come to Xephon and to your current
position? How do you see your position evolving in
the short and long term?
A: Like you Stephen, I come from an academic
background. Before entering the IT industry half a
decade ago, I completed doctoral-level research for
a Ph.D. and lectured to both degree-level and
post-graduate students. When I moved into the IT
sector, I first worked with databases. When the
opportunity arose, I jumped at the chance to work
with Xephon. This position allowed me to fully
exploit many of my skillsets: the ability to
undertake meticulous research, and to articulate
ideas in technical lectures and seminars.
In the short-term I see my role incorporating a much
greater use of Web-based technology. Xephon offers
electronic access to all our publications. I see
increased granularity in these offerings - instead
of offering whole books on-line we are beginning to
offer individual chapters. I think we are also going
to see a much more rapid dissemination of
information using the Web.
***
Q: Jaime, what do you see as the key skill set
required for IT professionals today and in short
term and long term future?
A: Stephen, I always give this answer to the
question of skills. In my mind the key skill for IT
professionals is the integration of IT knowledge
with business skills. The purpose of IT is to
support the business function. I see the future IT
professionals divided into those who are
technology-focused and those who integrate
technology and business. This latter group of future
IT professionals needs to be aware of the possible
technology directions which could support their
business needs.
There is a serious shortage of IT staff with this
blend of business and technology skill. In the
short-term this skills shortage will be hidden,
because of the poor economic climate. Many
organisations are laying off staff, and these
personnel are filling gaps across the industry.
However, it is important to realise that these poor
economic conditions are not going to last forever.
This is not an IT phenomenon, but a global economic
restructuring. Such economic conditions normally
occur once a decade and when the industry gets back
to normal the skills shortage will still be there.
***
Q: Jaime, you are heavily involved in research.
Based upon your exhaustive research, can you comment
on what you consider to be the most "important"
technologies and technology directions that
companies and IT professionals need to consider, and
how have these changed from your predictions last
year?
A: I would suggest that we review the technologies
that we considered last year, and see how they have
advanced over the last year. There are many ways to
look at future technologies - one of which is to
consider when these technologies are likely to
achieve critical mass.
If we look at it this way in the short term, that is
1-2 years we will see increasing importance attached
to XML and standards in general, Linux, wireless
devices. Obviously in this short term there are a
wide range of IT considerations that need to be
reviewed such as security, systems management,
storage and the Microsoft product set. With these
technologies come some issues for consideration, for
example consolidation, systems management, the
management of remote technologies, data management,
and network management.
In the mid-term future, corresponding to about 3-4
years, we will see the widespread deployment of
IPv6, VoIP, agent technology, speech recognition.
These technologies still in a state of flux at
present but I have to emphasise that these
technologies will assume considerable importance in
the future, and here at Xephon we keep close tabs on
the latest developments in this arena.
Some of the most interesting predictions relate to
the long-term future, five years and beyond, it is
here that we are likely to see the most radical
changes to both IT and its effect on society. We may
very well get the first glimpses of what an
e-society will look like.
If we look at these technologies and directions in
more detail I would make the following comments
about each:
Windows and the Microsoft product set
This prediction has not changed, quite simply the
Microsoft product set will be in all our futures. If
you look at Microsoft’s technology road map –
especially the .NET initiative, and if you study
Microsoft’s acquisition of, and investment in other
technology companies you will see that there are
very few areas of the IT sector where they do not
have a presence. They are represented in every
sector from content provision to wireless. Many
people still associate Microsoft with Operating
systems and applications, this is a grave
underestimate, they are so much more broadly
focused.
When we consider Operating Systems we should
consider Windows 2000 which has brought with it a
vast range of new features, redesigned directory
services, and enhanced availability. A move to
Windows 2000 is inevitable for many companies, as
releases of strategic BackOffice products such as
Exchange 2000 and SQL Server 2000 rely heavily on
its advanced functionality. More importantly at the
high end of the Windows 2000 product range is the
‘DataCenter’ product which is the strongest
indication yet that Microsoft is looking to expand
its horizons towards the high-end business and
mission-critical world. However, the adoption rate
within enterprises of Windows 2000 has not yet
exceeded 50%.
Beyond Windows 2000 Microsoft will release the XP
operating system. Your own research at iGen
Knowledge Solutions indicates that enterprises will
purchase the new XP and server equivalent OS and
upgrade existing Windows installations in some
numbers. Your research suggests that the adoption
rate for XP will be 34% by the summer of 2002 after
initial reviews and troublespots have been found and
68% by the fall of 2003. The new features including
support for wireless, and improvements in management
(through group policy) will provide a complete
return in investment in 13 months. The features will
also be present in the server editions (Whistler).
Moreover, the associated implications of the
forthcoming .NET, initiative will be highly
significant for the industry. I would call .NET a
longer-term strategy for users, simply because the
.NET strategy requires such radical changes that I
would think it will be in a state of flux for at
least a year or two. It would be wise to evaluate
these technologies during this time period. The
integral parts of the .NET strategy – such Web
Services, and SOAP look as if they will have a
radical affect on the industry.
Linux
Linux has gained wide-spread support from vendors
and consumers alike, especially in the Server
market. However, it is important to note that the
release of Microsoft Windows 2000 with its inherent
stability has altered this equation a little, but
the cost factor is still a prime mover for Linux.
But although Linux is the fastest growing server
operating system with in excess 25% of the server
market, this does not translate into any significant
desktop gains, which are almost negligible. Linux
still has to reach a mass audience by attracting
application developers, and it needs work to become
a relevant desktop environment.
However, Linux is gaining a significant market share
in embedded devices and has the potential to take
the PDA market by storm. For example, when Linux
PDAs become mainstream, price will become a crucial
differentiator, people will be less concerned about
what is running the machine. As a result, we may see
other PDA operating system companies having to
significantly discount their PDAs to compete. Once
we start to see Internet-capable PDAs under 100
dollars this will have a massive effect on the
uptake of mobile devices.
It is likely that in the foreseeable future, Linux
will remain as the second most important server
operating system, so I would certainly suggest that
companies need to acquire staff with Linux skills,
and training will be crucial. Talking to industry
professionals has made me aware that there is
currently a considerable skill deficit out there.
However, I think that will change. Because Linux is
an ideal OS for Universities and colleges - both on
the server side and to a certain extent as a desktop
operating system - more and more educational
establishments are likely to adopt it. This is
likely to have long-term implications for the
skillset of those coming out of higher education.
This is the same scenario that was seen with
Microsoft’s software in the 1990s.
XML and standards
One of the reasons we have seen such massive growth
in the IT sector in the last five years has been be
a result of the widespread use of standards. At the
simplest level standards are a means to achieving
interoperability between systems. It is this
interoperability that is what will fuel the
e-society of the future. At the present XML is the
standard that has so much to offer that we can
expect it to pervade the whole of computing, from
databases through middleware to end-user
applications. Massive effort is being put into the
creation of XML tools by the IT industry. Not only
are new products being written, but old ones are
being retrofitted to work with XML. One of the
biggest potentials for XML is exchanging information
between firms via the Web. But I think XML still has
a long way to go before it reaches its true
potential in the industry.
Wireless devices and connectivity
It is highly probable that there will be an
explosion in the number of Wireless devices. Some
predictions suggest that the number of
Internet-enabled mobile devices will exceed the
number of PCs by 2003. This may or may not be the
case, but what is certain is that the number of
mobile devices being used will increase massively.
It is important to realise that the growth in
Wireless devices will be fuelled by the increase in
wireless connectivity.
This is being promoted by many different sources.
The large telecommunications vendors need to drive
growth because the market for conventional voice
calls is likely to reach saturation, especially in
the developed nations. The phone vendors need a
reason for users to replace their phones, and
hardware vendors see this as a new product outlet.
We are now beginning to see increasing amounts of
data being sent using wireless media for
applications such as e-mail and Web browsing.
Development of the wireless WAN is being fuelled by
the proliferation of handheld computing devices, and
mobile users potentially become nodes on a SAN,
storing and retrieving data. I think we will see
considerable initial use of this technology by
mobile workers and sales forces. The most important
point IT departments need to consider how to manage
the security, back-up and synchronisation of these
devices. If this is not given sufficient thought it
could lead to a significant management overhead.
The deployment of wireless Internet solutions will
begin to increase, although this will be tempered by
the uncertain economic climate. The rise is mobile
Internet solutions will have a beneficial effect on
consultancies and service industries, because of the
difficulties in deploying solutions. At the present
much of the wireless technological innovation is
located in Europe. We may see predatory acquisitions
of European wireless service firms by North American
companies who need to develop wireless capabilities
rapidly. We should expect massive expansion of this
whole sector in the short to mid-term future.
Software Development and Object-Oriented Code
During the twentieth century, hardware has achieved
a performance increase of six orders of magnitude.
Software has not developed at the same pace; indeed,
software development is still quite slow by
comparison, requiring extensive testing prior to
release. This state of affairs is not likely to
change during the next decade. However, there are
some things which can be done to alter this
relatively slow release rate.
The pace of the IT industry is increasing rapidly,
so software development times have to shrink. The
key to achieving this, of course, is through the use
of object-oriented programming, such as Java.
Reusing software cuts development time and creates a
library of building blocks that other programs can
readily use. The information age will be held back
without fundamental changes occurring in software
development. The inherent flexibility of a
component-based system makes it much easier and
quicker to change the software as business needs
evolve.
Last year I predicted that Java would play an
increasingly important role in the industry. This
has certainly been confirmed by the evidence from
recruitment specialists who currently see Java
skills as the most highly sought after skill.
Certainly the massive backing being given to Java by
both Sun and IBM is having an impact.
Additionally there are benefits in the way that Java
and XML complement each other. I mentioned earlier
that XML will be crucial in the next few years. Java
is an object-oriented language, ideally suited for
expressing state and behaviour. XML, on the other
hand, is what might be called a data-oriented
language, which concerns itself only with state.
Among computer languages, it is perhaps closest to
SQL in this respect. In any case, Sun has set to
with a will to cement XML to Java as firmly as it
possibly can, by publishing specifications, giving
away tools, and whatever else it takes. Much of the
hype behind Java has died down now and companies can
get down to some serious work.
However, last year Java had little viable
competition, analysts were aware of the
Microsoft.NET initiative, but little more could have
been predicted. Now we have a much clearer picture
of Microsoft’s response to Java.
My conversations with users and analysts suggest
that Java is still ahead as a technology, but simply
because of its perceived openness. We will see a lot
more competition between Java and .NET in the years
to come.
Security
Security has been creeping up the list of IT
priorities over the last five years. There can be no
doubt that e-business has elevated the profile of
security. Relatively trivial breaches in e-business
security can have massive implications for a
company, ranging from negative publicity to massive
drops in share price. This direct link between
security and the boardroom makes IT security one of
the top priorities for IS departments.
To give you an example Stephen, each year Xephon
does a survey of IS Plans for Fortune 500 companies.
In 1998 security was the seventeenth most important
priority - in 2000 security was the fourth most
important priority.
As computing moved beyond the traditional
centralised data centre, it gave users the potential
of greater productivity, functionality, and
convenience. However, along with these advantages,
distributed computing has exposed companies to a
much greater vulnerability. The level of exposure
has increased, while disaster preparation has
decreased. The newest areas of risk are the Internet
and intranets.
To give you an example of the increased
vulnerability of web-enabled systems, consider the
development of viruses. In the early 1990s,
executable boot sector viruses such as Jerusalem,
Cascade, and Form took three years to gain critical
mass and are estimated to have caused $50 million of
damage over five years. In 1995, the Word Macro
virus, called Concept, took four months to achieve
critical mass, and caused $50 million worth of
damage. However, by 1999, the Melissa e-mail enabled
Word Macro took four days to gain critical mass, and
caused an estimated $385 million of damage. A year
later, the I Love You e-mail enabled Visual Basic
script took just five hours to gain critical mass,
and caused an estimated $700 million of damage.
One of the best ways of improving the integrity of a
server platform is still to move it to a physically
secure area. Consolidation of workgroup servers,
usually carried out for economic and systems
operations reasons, is drawing processors into data
centres. In the meantime, there is a countervailing
proliferation of Web servers which are physically
dispersed and are intrinsically insecure in
themselves. Fortunately, the operation of
second-generation e-business systems is more likely
than that of their predecessors to be entrusted to
IT professionals, which should improve their
security from a variety of viewpoints, including the
physical one.
From a technological perspective companies need to
consider firewalls, anti-virus software, encryption,
authentication, and digital signatures. But security
is also a human issue. It is important to make
employee education and awareness a high priority. A
corporate policy, with top-level support needs to be
put in writing. On the same theme, a coherent and
enterprise-wide security policy is also very useful
to establish some method of negotiating on security
between e-trading partners. The formalising of these
issues is one of the problems being tackled by the
ebXML definition project.
The other crucial element of security is back-up.
The number of organisations without a proper back-up
strategy in place is actually increasing. This is a
very worrying.
I think that, in the long term future, we might see
a different approach to dealing with attacks against
security. We might see the development of
self-healing software. Although this is only in an
experimental phase at the moment, it does have the
potential to change the way in which we approach
issues of security.
IPv6
At the beginning of last year I classed the movement
to IP Version 6 (the next generation Internet
Protocol) as a medium- to long-term strategy. Our
predictions at Xephon suggested that there was a 75%
likelihood of the industry moving to the new
protocol, but this was highly dependent on its
acceptance by the major router and operating system
vendors. I am now more confident than ever that a
move to IPv6 will occur before the 2004 timeframe.
At the current rate of use the Internet Protocol
Version 4 will run out of address spaces around
2004. This will be a prime mover towards moving to a
new protocol. IPv6 will solve the address space
problem, and will have considerable benefits for
multimedia applications, Quality of Service, and
mobile networking.
The specification of IP Version 6 has taken five
years to develop, and to a certain extent it is a
technical compromise between several proposals. In
general, the IP Version 6 specification is
technically quite conservative. The designers tried
to use the same paradigms as the existing Internet,
keeping in mind that the IP Version 6 Internet was
to be an upgrade of the existing Internet, not a
completely new network.
But, I would strongly suggest that the industry
should keep an eye on this sector, when deployment
starts things will move very quickly, so industry
awareness is key. The movement to IPv6 will not be a
matter of choice. When the available address spaces
run out, we will have to move.
VoIP
As I mentioned earlier I would class the deployment
of Voice over IP (VoIP) as a medium-term strategy.
There is no doubt that VoIP will prevail in the long
term, because, for most companies, the cost benefits
will be impossible to ignore. However, in the short
term there are still a considerable number of
technical details to sort out, for example
guaranteeing the quality of transmission across the
Internet is quite complex at the present and can
require some complex tunnelling. However, when IPv6
takes off these issues will be reduced. The other
problem at the present is that the marketplace is
still highly volatile with large numbers of IPv6
vendor mergers.
Therefore, it is likely that many potential adopters
will stay on the sidelines until there is greater
clarity in the market. This is not to say that it
would be foolish to adopt VoIP at this stage, the
companies that have are experiencing considerable
benefits. I for one would certainly recommend
limited deployment now at the departmental level. At
the present I would not recommend using VoIP for
anything other than intranet and Virtual Private
Networks, there are still too many quality of
service issues.
This does however highlight the importance of an
enterprise’s network. It is essential that companies
focus resources on their networks, increase
training, and consider the future demands of
multimedia, Voice over IP, and Quality of Service.
Among the major applications, users should expect IP
fax, Web-based call centres, and unified messaging
will take the early lead and find mainstream
popularity in the business world. Investments in
networking technology should be made with these
future issues in mind.
Speech recognition
This is certainly a technology to keep an eye on in
the mid-to long-term future. Many large enterprises
are still cautious about the deployment of speech
recognition technology. There have certainly been
some false dawns for speech recognition technology
in the past. There is a perception that this is a
technology with limited value in the enterprise or
business context. I have to say that this is really
not the case.
To give you a couple of examples, many companies are
experiencing considerable pressure on their help
desks and customer call centres. More and more staff
are needed to maintain a quality service, and this
equates to increased costs. I have seen several
examples of companies using speech recognition to
obtain initial information from customers or
employees. This could be name and address
information for external customers, or name and
department for internal help desk queries, which can
then be used to populate a screen ready for use by
an actual operator. This initial information
acquisition phase can save minutes of operator time
on each call. It’s quite obvious that this saved
operator time equates to massive financial savings
over the course of a year.
There is another hidden application for speech
recognition technology. It is possible to
authenticate users through their voice print. The
security benefits of the biometric identification
are enormous, and it is also non-intrusive because
there is no need to ask personal questions, or get
the user to remember passwords. Going back to the
point I made earlier, this also saves operator time,
which again saves money.
The combination of speech recognition and mobile
devices is a very important area to watch in the
mid- to long-term future. As the size of mobile
devices decreases the need to have a simple way of
inputting data increases.
When this does come it really will change the face
of IT. In the future, we are likely to see new and
innovative ways to interact with computing devices,
of which speech recognition will be one. Research by
major companies in this field such as Microsoft and
IBM is likely to yield results, which will benefit
all users.
Agent technology
Last year I did not cover agent technology at all.
This is another technology sector that has had false
dawns in the past – normally the result of
misinterpretation by the press. There are a couple
of factors would cause me to include this technology
in this review.
The volume of information with which IT
professionals are bombarded is enormous, and this is
a situation that is only going to get worse.
Research at the close of 1999 indicated that the
number of Web pages had broken the one billion mark,
it is now almost double this number. It is becoming
increasingly clear that we need some means of
sorting and acquiring useful data, which is one area
where agent technology will be useful.
The other factor which has changed since last year
is the wider use of XML across the industry. Much
agent technology is going to be dependent on XML and
other standards to allow data to be assimilated in a
consistent manner. The wide variety of legacy and
new system technologies, and operating platforms
currently in use worldwide is the central issue
affecting the distribution and uptake of agent
software applications is.
Agent technology has been around for many years, but
I think the number of vendors who will develop the
technology will show a marked increase in the short
term future and I think that in the next couple of
years we will see individual users take increasing
advantage of agent technology.
Agent technology has huge potential, especially with
regards to the Internet. As yet, no single agent has
been sufficiently developed to gain widespread
acceptance, although there are a number of products
in development around the world. The applications
for agent technology range from the personal to
enterprise level. Just watch this space!
Consolidation
Consolidation and integration are big issues in all
sizes of organisation at present, many of our
largest customers are drawing LAN servers and
departmental systems back into data centres, while
we are aware that smaller organisations looking to
reduce costs by consolidating a smaller number of
departmental machines.
The management overhead of running many small
servers is staggering - especially when you consider
the perspectives of systems management, manpower and
environmentals (by which I mean floorspace, power
consumption, etc). When you consider that the cost
of staff is one of the highest overheads that a
company has to sustain there are significant cost
benefits in consolidation.
The vendors are supporting this by releasing some
very powerful hardware and software combinations.
For example in the third and fourth quarter of 2000
we saw IBM release the z/900 enterprise server
mainframe with the ability to consolidate
potentially thousands of smaller servers, we saw HP
and SUN announce their new high-end UNIX servers,
and we saw Microsoft release its DataCenter offering
which combines both a hardware platform provided by
a third party - such as Fujitsu, Unisys, Compaq or
Stratus with the resilient DataCenter software.
Consolidation is the real issue at the top-end of
the industry. Anything which does not run 24x7 is a
toy. Rebooting is not an option.
Storage
The spread of the Internet, multimedia, and new
digital applications are creating a massive demand
for storage. Throughout the 1990s, the areal density
has increased at 60% or more every year, and similar
density increases are expected to continue for the
next decade. Densities have been shown in
experimental situations to exceed 56 gigabits per
square inch, while track densities have exceeded
70,000 tracks per inch.
It has long been thought that something called the
super-para-magnetic limit would appear between 20
and 40 gigabits per square inch. This is the point
at which magnetic media become unusable because the
tiny magnetic spots which represent bits cannot
maintain their correct orientation because adjacent
bits exert too much influence. This would render
data unreadable and corrupt. This hypothetical
barrier has not yet been reached, and highly
advanced Giant Magnetoresistive heads are expected
to extend areal densities up to 100 gigabits per
square inch. Those of use who study technology
futures have been aware of alternative storage
technologies such as a holographic storage that have
been waiting in the wings, but these do not have
long to arrive in the market place given the rapid
and continued progress of magnetic storage.
However, from an enterprise perspective it is likely
that magnetic disk drives as we know them today will
remain the principal means of information storage
for the foreseeable future.
You may be wondering where this is heading. High
density one inch disk drives could create a new
generation of portable devices and appliances, and
even wearable computing devices. Again this is
something that is going to change the way we
perceive ‘computing’.
Data
We must remember that it is data, not computation,
which is the basis for nearly all the strategic
value created by IT today. Data has been called the
DNA of the information age.
Data and its conversion to knowledge is absolutely
crucial, especially for companies in the e-business
sector. I have mentioned before that close business
integration is a key element that IT organisations
will have to deal with. The most important asset of
businesses will be the information that they hold.
The principal area of competitive advantage in which
companies will be able to distinguish themselves
will be what they do with this information. The
collection, management, and analysis of this data
will be the key areas of competitive advantage. Data
is not just a technology issue, it is a management
issue.
Companies need to have a data management policy in
place, which considers how raw, low quality data is
converted into useful business information.
Companies need to review how behavioural information
about visitors is collected, using cookies, search
engines, and on-line registration forms. They also
need to define business rules for the collection and
integration of data.
Sales patterns and trends can be analysed using data
mining and OLAP tools. The massive industry interest
in e-commerce is causing a vast array of products to
be created to fill industry needs. It will be
essential to constantly review this new technology
and see what emerges for the Web. And finally,
companies need to integrate low- quality data
collected from the Web with their higher quality
enterprise data to extract business information. In
the information-based society of today, data is our
most important asset.
System management
I think that this is going to be another key area to
consider, because of the rapid explosion in the
number of distributed systems that companies now
have to manage, things like Web-attached resources,
databases, remote devices, and so on are a serious
management problem.
The approaches to system management are divided
between using frameworks and best-of-breed
solutions. Tivoli Enterprise and CA Unicenter are
currently the main contenders in the ‘total system
management’ market. Along with other popular
management products, such as HP’s OpenView, they
strive to offer a complete solution for managing
devices, networks, applications, databases, and
other ‘objects’ in a consistent manner. But it is
essential that users evaluate whether using a total
management product is the right approach to the
problem, or whether they should concentrate on
building their own frameworks using best-of-breed
components.
There are trade-offs between the two approaches,
which need to be considered. There are considerable
problems associated with imposing a total management
system on what is often a multi-vendor
infrastructure. Many enterprise-wide solutions can
prove unwieldy and have difficulty adapting to
evolving IT requirements at the department or local
site level. Specialist tools can enable a modular
approach, allowing changes to be accommodated
quickly and efficiently, at a pace controlled and
dictated by the systems manager. But all too often
they are poorly integrated with other systems.
Business to Consumer e-commerce
This is a market sector that has gained considerable
early publicity because of the highly-inflated
values of some e-commerce company valuations. As we
have seen, the economic viability of some B2C
e-commerce sites is somewhat dubious which caused
the market to crash.
Making money selling an increasingly commoditized
product in a highly competitive market means
differentiating that product from everyone else's,
whilst keeping cost of sales as low as possible. It
can be done by integrating products to offer a
fuller service, and by making them easier to buy.
Using the Internet to add value to products and for
e-commerce is key, but, for many businesses, the
costs of implementing a worthwhile e-commerce
strategy seem overwhelming.
Physical companies with real-world outlets, brand
awareness, and exiting customers have a considerable
advantage in providing an additional outlet for the
their existing customers and attracting new
customers. By a process of Darwinian survival of the
fittest many of the early B2C e-commerce companies,
the dot coms, have come unstuck, more and more of
the so called ‘Clicks and Mortar’ companies have
gained market share in the B2C e-commerce area at
the expense of many of the pioneering e-commerce
companies.
If companies wish to implement a B2C solution, they
should, identify the business objectives before
starting, ensure key senior business champions are
committed to the project, create a skilled project
team combining both business and IT skills, and
consider the legal and security requirements.
Other points to consider are the fulfilment
capability, the deep integration with back-end
databases and inventory, the use of legacy systems
for Web applications, and the relationship between
existing sales channels and the on-line business.
E-Business is not just a ‘front-end’, it
fundamentally alters the ways in which a company
operates.
The B2B market
Last year the predictions for growth in the B2B
(Business to Business) e-commerce marketplace were
massive. From what I recall the predictions from
analysts for the future size of the market ranged
from several hundred billion dollars all the way up
to $7 trillion by 2006.
The result has been that a host of start-ups have
been trying to position themselves in the B2B arena,
in preference to the B2C sector. As I predicted this
caused the same kind of fragmentation and
overcrowding that impacted on the B2C market. As the
market becomes more crowded the likelihood of
companies carving a successful niche become less
favourable.
e-procurement is still one of the most important
components of B2B e-business, simply because almost
all companies can benefit from the cost savings. The
goal is to electronically link the entire sales,
production, and delivery process into one seamless
flow of information. Having a global view of
logistic movements enables better decision making,
reduces costs while providing the means for sharing
information among trading partners. This type of
visibility and collaboration provides massive cost
benefits along with an improved ability to react to
customer requirements.
However, there are problems with e-procurement.
Having spoken to many implementors I can say that it
may take years to fully realise the benefits of
e-procurement, and often this can only be achieved
through the transformation of company policies and
processes. There are considerable rewards but the
risks are high. I would advise companies to look
closely at the opportunities for using
e-procurement, but the vendors figures for ROI
should be viewed with caution.
This has been quite a detailed list, but I think it
gives a flavour of the principal issues that
professionals need to think about. As you can see
the themes which we talked about last year have not
changed radically.
Q: How do you see computing technology evolving in
the short and long term and what recommendations
would you make for IT professionals and companies to
best prepare for the changes to come?
If we consider the technology directions I mentioned
earlier, it is clear that there are a wide range of
new technologies which are driving IT into every
area of commercial and even domestic life. But the
raw technology is outpacing our ability to manage it
within a structured IT environment. I see this need
for management as the key challenge in the near-term
future for the IT industry.
It is a paradox but in the medium- and long-term I
would suggest that we are going to see convergence
of technology. We can see this already at the
hardware layer, with the convergence of computers,
phones, and consumer electronics. At the application
layer we see the convergence of information,
communication, commerce and education. If you look
at the technology directions I mentioned many are
interrelated. Developments in speech recognition
will be complemented by developments in VoIP, and IP
version 6. Furthermore, enhanced security, storage,
and optoelectronics will provide building blocks for
highly advanced network technology, with a universal
voice/language interface. And all of this will be
supported by standards that allow these technologies
to work and inter-operate. And it is this that will
support the e-society of the future.
To get back to the short term - companies need to
prepare themselves by analysing their business
processes, simplifying these where necessary, and
devote resources to creating internal departments
with rapid-response capabilities to monitor and
quickly respond to technological change. This is
where the development of close associations and
partnerships with analyst organisations like Xephon
will provide competitive advantage.
***
Q: Consider this a blank slate. Please make any
statements or comments about the IT field unedited
and unrestricted?
Stephen, I would like to take the opportunity to say
a few words about IT skills in general. This is
something which is causing considerable concern in
the industry. Every year at Xephon, we undertake a
major survey of IT managers, to determine their key
priorities for the year ahead. In the last three
years of the IS Plans Survey, we have seen the
problem of finding, and retaining, staff with the
right mix of technological and business skills
becoming more critical. In 1998, 66% of respondents
considered the skill shortage to be a problem. In
1999, it rose to 75%, and by 2000, this figure was
up to 78%. This number is set to rise again this
year.
This skill shortage is becoming acute. It must be
dealt with at all levels. We need to encourage more
IT related activities in schools at a younger age,
and we need to improve the public image of IT, which
seems to sway between being the preserve of ‘geeks’
or high-flying consultants, rather than being a real
job for real people. We can do more now, as well. We
need to encourage more women to move into the IT
industry. This is still a very male-oriented
industry for which there is no reason apart from
social perception and tradition. Because of the
rapidly changing nature of IT, we need to adapt the
skills we have in the industry and develop them
further. This is where the need for lifelong
learning and online learning become crucial.
Today we are the vanguard of the e-society. We may
not realise this but this is a historical time for
the IT sector, in five years we should begin to see
the early indications of how the interconnected,
e-society will look. It is those of us in IT who
will be the back-bone of this new approach to what
it is to be a community.
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