NetWatch

Issue No 2

27 January 1997


GLOBAL VILLAGE

Germany says "Banks only" for E Cash.

The Bundesbank will allow only banks to issue pre-paid cards or electronic purses. (e-cash). Central Bank council member Franz-Christoph Zeitler said banks were the safest guardians of electronic cash systems since they had to meet legally-imposed liquidity restrictions and had long experience of cashless payments. The proposal to control electronic cash is part of a new German banking law which is still under preparation but which is expected to be enforced this year. Zeitler said it was likely that Bonn would also restrict the rights to create and maintain of Internet-based electronic cash systems to the banking industry.

Its Japan So its the Government that does it

A three year project commencing this year between Nippon Telephone and Telegraph and MITI - the ministry hopes to promote the Internet in Japan for electronic transactions. Approximately 100 banks, electronic manufacturers and telecommunication co's will be involved in the project. The technology will include the use of electronic seals devised to identify customers using e-cash, and electronic watermarks to prevent prohibited use of Web sites.

Europe dragging the chain?

Eckhard Pfeiffer, Chair & chief exec of US-based Compaq Computer, said demand for information technology in Europe will stagnate unless the roadblocks of over-regulation and high prices are removed. Pfeiffer told the European IT Forum that the fragmented nature of European markets was also a drag on business. "In our new notebook computer, we've had to incorporate 19 individual cable modems for Europe." Computer skills and knowledge of the Internet, holds the key to success in the new virtual markets of the 21st century." Europe is handicapped as telephone costs are much higher than in North The European telephone industry also faces gridlock unless telephone line capacity is improved.

SERVICES ON-LINE

Business on the Internet Forum

Electronic Commerce Association (ECA) has set up the first forum for business users of the Internet. It will operate as a permanent forum for the exchange of ideas, information and experience. It was set up in response to ECA members keen to explore and exploit the business potential of the Internet, but also anxious to understand the pitfalls and drawbacks. The Business on the Internet Interest Section's terms of reference include developing best business practice, contributing to developments, representing UK users, providing advice and working with service providers to meet the business community's needs.

Meetings Meetings - more on line meetings

If you thought you could escape an interminable series of meeting just because the main players were out of town think again. Uncle Bill's troops at Redmond will have you constantly on the agenda. Beta testing NetMeeting audio and data conferencing software that lets several people communicate at once via the Internet is on hand. Microsoft Corp. is hoping NetMeeting 2.0 will convince users that real-time communication over the Internet is as easy as picking up the telephone. Software free on download. Microsoft expects to ship the product in the first quarter of this year.

DOING BUSINESS

Come all ye fretful

Worried you are missing out on the great investment and technology offerings of cyberspace. Worry no more Venture Community is a virtual community on the Web for entrepreneurs and investors. Also known as The Vine, it offers listings of technology, intellectual property, capital sources and information resources for companies seeking funds, strategic alliances or licensing or royalty income.

SURVEYS

It's business to business

ActivMedia, a Peterborough, N.H., Research company has released a study "The Real Numbers Behind Net Profits," of decision makers at 1,100 commercial Web sites projects total world-wide. They conclude that business-to-business commerce on the Web is growing faster than its consumer-oriented counterpart and is responsible for the lion's share of sales. Web- related sales are charted at US$438 million in 1995, US$2.8 billion 1996 and projected at US$13.4 billion in 1997. Business-to-business represented about one-third of total sales in 1995; rising to about two-thirds in '96 and three-fourths this year. IDC estimates the Web will be readily accessible by most consumers by the year 2000, but business people are more open to online commerce as business users are already living in an automated world. The ActivMedia study concludes that one in three business end-user sites today is already profitable, and one in four expects to be profitable within two years.

THE NUTS AND BOLTS

In the palm of your hand

Keeping pace in the flood of hand held devices to use the Internet Hewlet Packard have released new products enabling customers to use its hand held palmtop personal computers to send and receive wireless Internet electronic mail. The company will launch HP Partner Kits providing all-in-one wireless Internet email packages with easy set-up and modem rental in conjunction with its high tech partners. Called "No wait, no wires," is part of a broader effort among companies supporting Microsoft's Windows CE mobile computing environment as part of a new category of products.

The Black box another player.

Mitsubishi Electric Corp. has entered the Network computer market and is hoping that within a year its will have made its mark. Mitsubishi is now readying a bevy of Java-based products that will find their way to the U.S. market in the second half of this year. Priced below US$500. Mitsubishi expects the network-dependent devices will displace a large number of PCs.

Quote

Sure if I knew what I was looking for it wouldn't be so hard to find it.
Mother O'Reilly

SNIPPETS

Now you see me

Marketing has commenced of the Kanematsu Corporation's version of the Internet videophone software developed by the American firm Specom Technologies. Called Internet Vision Time, users can view each other on computer screens during an international telephone call on the Internet. Kanematsu sees a wide application for the product, including teleconferencing at companies and expects to sell 100,000 copies in the first year.

Federal Express gets carried away with the Internet

In shades of many services with such potential to come Federal Express has made the Internet the core of its business strategy. As part of a virtual enterprise suite of services at the centre of a strategic new direction Federal Express Corp. unveiled a new Internet-based service called FedEx BusinessLink. The aim is to provide business with the capacity to electronically integrate the ordering of products online with the ability to fulfil and deliver them anywhere in the world. The objective is to combine FedEx's world-wide transportation and information networks with the global reach of the Internet. FedEx customers will be able to reach new markets and serve their customers more effectively. FedEx BusinessLink is the first offering in a strategy called the virtual enterprise suite, which will streamline the order management process and combine the global reach of the Internet. Laurie A. Tucker, senior vice president of Logistics, Electronic Commerce and Catalogue Division for Federal Express said ."With FedEx BusinessLink, a company of any size can become a global marketer and create new sales channels without the need to invest in additional customer service and warehousing. It also provides a cost-effective, low-risk method to meet customer demand while minimising inventory." Federal Express will provide businesses with software to create and update their own online catalogue. Online buyers around the world will be able to search for products, check pricing information and place their orders via FedEx BusinessLink which is housed on a secure FedEx server.

When you really need to know

Data on 10,000 listed companies world-wide is now available on the Financial times site. All information is available in US dollars so comparing companies from different countries is easy. The new service is available in the subscription section of FT's site so a few coins will have to change hands before this information worth millions is yours.

Neither rain nor hail nor hard disk crash?

The US Postal service is getting to grips with the competition of e-mail by developing its own range of services and hopes to make electronic mail as reliable and secure as hand-delivered mail. The first service, an electronic postmark, including a date and time stamp for email. US Post will provide certified delivery receipts registered mail verification of sender and archiving services. The electronic postmark will validate a document's existence and authenticate that the document has not changed from the time that the Postal Service first handled it. All very important in the exchange and settlement of contracts and transactions.

COMMENT

There are a few fundamental facts about the Global Market and the new Global network You can see peoples eyes light up when you tell them that there are 40 million customers for their product. And indeed there are.

Then you spell out what the word potential really means. Potentially you could be the heavyweight champion of the world but lets get realistic. The world may have been at a few strokes changed dramatically but some things remain stubbornly the same.

In the retail trade the words location location location became a mantra. Then for the wise, database database database. Maybe now its network network. network.

The bankers of Lombardy set up modern banking because they had a network of associates all over Europe. Associations have always been important in business, the hanseaic league not being the first.

For the small to medium size business the potential of the Internet looks like a tantalising prospect of world wide reach and access to markets far flung and profitable.

Why is Bangelore a centre of world software. Because wise Indians when they migrated formed networks of influence in the N Y banking and in the software houses of the US.

Do you have networks of business colleagues in Boston, Copenhagen, Lagos?.

The formation of networks of the interested is the most fundamentally valuable instrument in doing business.

The and the Internet will be challenged to permit enable and facilitate the coming together of players with the desire to form associations, correspondence, agencies, colleagues and relationships.

In a word mate, - mates .mates mates.

Comment

Whose going to be on board when the gravy train rolls down the cyberspace Railway?

Each time an epoch shaking technology rolls through it's the wise learned and lucky who guess the industries that will be created, rewarded and destroyed by the new technology.

Bigger than plastic Mrs Robinson, better than chemicals. The Internet is not a new industry but a new medium of communication so its effect will spread across many areas of business. Its not a new sector growing up in the economy but a new element in everybody's game plan.

Some industries will merely have the costs of doing business reduced. Margins will get fatter, cream will be added to the scones. Lawyers will process leases and serve documents through the electronic media. Access to precedents, cases and decisions will be global. Hold your breath for fee reductions.

Real benefits in effective service will go to brokers of all kinds.

The world has few sights to match the gypsy brokers of Romania as they fight for their commission on a horse sale. Holding hard on the wrists of both parties they gyrate, cavort, shout, curse and wheedle their way to a deal. No deal, no dinner I suppose. On the Internet there will not be the opportunity to grab the other parties wrist. But there will be a larger number of wrists.

Real Estate Agents will be in land agent heaven. With a high value product and a reasonable promotion budget getting party A to sell to party B will be profitably enhanced with the ability to get a lot more of the B's into the sheep pens.

Given that an Internet site can now provide a walk through video presentation local by laws explained, a welcome from the neighbours, details of schools transport and shopping facilities, that little mansion literally sell itself.

Prospects could enter a postcode and look at the offering in gods little acre. Mind you land is not something you can put in a package and sell to those nice people in Finland.

The recruitment Industry will suddenly get global reach. Do you have a correspondent in London you can trust to interview the prospect for that IT project management in Melbourne. Can you go to video conference with the client and the chap from Abu Dhabi whose resume glows with potential mutuality? Short lists can be pared with the completion of on line questionnaires, skills can be tested on line.

Insurance brokers will have the technology at hand to quickly scan quotes on line, off load risk faster and to offer the client the best available deal. Like the money supply, velocity will add to volume and volume to profits.

Travel Agents will have to get on their scrapers to add value to the service before the customer gets some fancy notion they can book the trip themselves.

So the brokers will have some opportunities and some problems. No big change there. But they will need to be addressed in a faster time envelop and with a high level of strategic thinking.

Protection is offered by the fact that expertise is not easily acquired. Relationships take years to build and a few clicks of a mouse button will not magically change that. There are in broking business's whole cultures and inter relationships which cannot change overnight. Having found that obscure London underwriter will you dump your long term relationship with the American alternative.

The threat of disintermediation, [all the guys in the middle of the relationships become redundant when the seller goes directly to the customer] is real. Maybe not for all the business but for the bulk easy bread and butter bit that makes the money.

Customers book their own travel, get their own jobs, hire their own staff, click a contract for fire and title insurance, sell their own houses?

Maybe but there's a reason they don't do it now and while the Internet can make it possible it may not make it sensible.

Unless the players do not adapt to the communications revolution and still do business the old way on the new medium with the old margins art the same volumes and fight the change.

That way lies a few surprises.