eBusiness: The Hope, the Hype, the Power, the Pain (Copyright 1999,2000)

-Dr. Jack M. Wilson ; J. Erik Jonsson '22 Distinguished Professor; Rensselaer Polytechnic Institute; email: wilsoj@rpi.edu

A revolution led by entrepreneurship in information technology and radical innovation in established corporations has led to an Internet Tsunami that has over turned the old business models and created the world's largest (legal) creation of wealth ever! The Internet Tsunami will continue to roll forward for several decades, but it has already left in its wake upended enterprises, smashed assumptions, instant millionaires (billionaires?), destroyed careers, overheated securities markets, radically altered Dow indices, and unheard of consumer behavior.

It "ain't over till the fat lady sings," and she is not even entering the hall as yet.

I include here links to case studies of companies such as Amazon.com, Netscape, AltaVista, and Akamai. The latter is particularly interesting as an example of an internet start-up that spins out of a university laboratory and becomes a $17 billion market cap company!

	In 1998, eCommerce was barely beginning, but by the time the Christmas shopping season had ended there was no doubt that there was a new force to reckoned with in retailing. Consumer eCommerce was off and running. All projections call for exponential growth for the next few years. There is little reason to doubt those projections. Investors were quickly convinced that something dramatic was afoot. Such high market valuations were given to the new "dot com" or eBusinesses that investment bankers had to invent new ways to explain the evaluations! Amazon.com was a spectacular case in point. In 1998, one had to assume a growth of over 59% per year for ten years just to explain the future growth value embedded in the market capitalization. While once assets, earning, and revenues were the key variables in determining value, investment bankers now began to look at "eyball-hours," dwell time," and "click through."
	Although consumer driven eCommerce has received the lion's share of the media attention, the most spectacular opportunities almost certainly lie in the other areas of eBusiness. These include business to business eCommerce (B2B), supply chain management, enterprise resource planning, human resources, customer relationship management (CRM), employee training, help desk support, and many other areas. For example, In 1997 eMarketer estimated that B2B was about 3 times larger than consumer eCommerce. By 2002 they estimate that B2B will have grown by 48 times (4700 percent!) and will then be over 7 times as large as the Consumer side (which will still have grown by almost 20 times!).
	W.W. Grainger (Maintenance, repair, and operating supplies provider) says more than 32% of its sales are coming via the Internet, and that the average dollar amount spent by online customers is nearly double that of its offline customers.! [InfoWeek Apr 28, 1999]

(note: I am indebted to Pindaro Demertzoglu for collecting the data presentations shown in the left column.)

eBusiness: The Hope, the Hype, the Power, the Pain (Copyright 1999,2000)

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