SINCLAIR CURDIE says dotcoms are now more realistic

Published on Wednesday 1 May 2002 01:00

WITH amazon.com and lastminute.com finally emerging after years of trading in the red, we might actually be heralding the end of the much-hyped era of dotcom boom and bust - a time now ripe for a more realistic assessment of exactly what business benefits there are to be had from online trading.

The notion that the internet would transform small companies into multinationals always was misplaced.

Rather, the beauty of the internet resides in the fact that it gives small companies the ability to be small more effectively than ever before.

Unfortunately, most companies approached the internet from the wrong starting point by rushing in to establish extremely sophisticated sites without stopping to think where the income stream required to sustain them might come from.

Initially technology-driven, the rapid growth in corporate websites occurred when the marketing departments of large companies jumped on the bandwagon to hype up its potential.

Because marketeers were quick to grasp the opportunities presented by the internet, many companies’ forays on to the web were initiated from a marketing, rather than business, perspective.

This had the result that websites were used primarily as online company brochures, with an emphasis on flash rather than functionality. Indeed, in some instances, web design companies were guilty of over-specifying the design requirements of websites by deploying state-of-the-art graphics and animation technologies at the expense of functionality.

Because technologically sophisticated sites often entailed lengthy delays to load up on screen, many potential users simply lost patience and sought a more user-friendly website elsewhere.

The novelty value in the earlier days of the web also created control problems within SMEs.

Senior management, swept along on the tide of hype, often took it upon themselves to release all those design talents pent up since childhood and briefed bamboozled designers to construct some truly howling monstrosities amounting to very expensive executive toys.

Now that most companies are familiar with the technology, business use of the internet has become more needs, rather than marketing, driven.

One factor behind this change is that the level of personnel within firms with responsibility for online developments has changed over recent years.

Once the preserve of senior management, responsibility for the website has gradually drifted down through the organisation . This is a welcome development.

There is no doubt that the business potential of the internet has been hindered in Britain by BT seeking to protect its lucrative leased-line market by effectively crippling the development of the broadband network in the UK.

Britain will witness a general upswing in online activity when companies finally gain widespread access to broadband technology.

The crucial factor, though, is not the question of speed of connection, but a permanent connection which makes many more developments possible.

This will make the prospect of developing company extranets more appealing.

In some cases, independent companies in a particular business sector may pull together to form a network with a quasi-national presence, able to take on their largest competitors. This is already happening in the legal profession.

As for the future for internet service companies, the heady days of offices with Herman Miller Aeron chairs and the fountain in the atrium are giving way to fast, flexible and efficient operations working to tight budgets as clients demand more value for money.

For those companies that have survived, the future looks bright. Projects put on hold after the bubble burst are being dusted down, revitalised and relaunched.

The internet is still sexy, we just need a bit of relationship counselling to see it that way.

Sinclair Curdie is chief executive of The Stableyard, an internet service provider. The views expressed are those of Mr Curdie and not necessarily the company’s