NetWatch

Issue No 8

5 March 1997


GLOBAL VILLAGE

Asians Pay More Than US For Internet Bandwidth

Asians pay more for Internet bandwidth than Americans because the U.S. has a lot more domestic Internet content than Asia. Most Internet traffic in Asia flows through expensive international leased lines to U.S. Web sites. U.S. Internet users go through domestic leased lines, which cost much less than the Asia-U.S. lines.

Because Asia has little Internet content that U.S. users browse (except in the case of Japan), Asian ISPs pay for the entire leased line to the U.S.--in contrast to non-Internet leased lines, whose cost is equally shared between the U.S. and Asian parties.

Encrypted Email For Finns, Swedes, Danes.

Scandinavian countries are embarking on a joint project to implement the first international email security service. Nordic Post Security Service (NPSS) - involving Finland, Norway, Sweden, and Denmark - hopes to provide secure email, and officials say that soon every Nordic citizen can walk into the nearest post office and sign up for it.

But no matter the success of the secure email system, the NPSS project is a clear sign that, unlike the United States, Northern Europe is moving forward with exporting encryption technology across national barriers.

China - first the machines then the Internet

In a sign of things to come indications are that the Chinese market could be the world's second largest, after the United States, in less than five years, according to a senior Intel Corp. official Intel's new range of Pentium processor chips had pushed aside older lines in 1996 as Chinese personal computer buyers leapfrogged to catch up with technology in the United States, said Intel vice president Sean Maloney. Personal computer sales were also rising far faster than in more developed markets elsewhere, Maloney said here.

``I would say that [China] will catch up with Japan as a market in the next three to four years,'' he said. ``Within the next five years it could be the world's second-largest computer market,'' he said

UK Intranet Market

The Durlacher Intranet Report 1997 examines how Intranets are currently being deployed in the UK. According to the report the market for Intranet hardware, software and outsourcing will exceed that of the Internet and that by the year 2000, there will be 4.6 million Intranet web servers, compared with 440,000 Internet servers.

By 2001, Intranets will account for 20% of all IT spending and the UK Intranet market will be worth $5.6bn. So far, only 13% of large UK companies have installed Intranets and a further 25% have plans to install them. Of those companies without an Intranet, 55% do not intend to install one and 20% are undecided. Between 75% and 80% of companies believe that deploying Intranets will cause a significant change in corporate culture although less than 40% believe that this would be associated with organisational changes. http://www.durlacher.com/intrarep.htm

South Africa - User Figures

A survey of over 700 online users in South Africa (ZA) has found that 83 percent of users are male, and 53 percent are aged between 21 and 35. 81 percent stated English as their first language with 15 percent using Afrikaans. The preferred browser is Microsoft Internet Explorer used by 43 percent of the respondents while 64 percent use Windows 95 as their operating system. http://www.southafrica.co.za/survey.html

SERVICES ON-LINE

Big discounts for Internet booking US airfares

The instant interactivity of the Internet is allowing airlines in the US to sell the unsalable. That empty seat on a flight leaving soon. Most major airlines are offering special Internet discounts, with savings of up to 90 percent. The carriers use the offers as a last-minute way to fill planes that would otherwise fly with empty seats. Promotion on the Internet involves low advertising costs. American, which pioneered the concept when it launched its NetSAAver program last year, made more than $1 million from the incremental fares in its first eight months and sends its weekly list to more than 250,000 people.

Continental offers "Continental On Line Travel Specials," or COOL, to more than 70,000 subscribers each Wednesday via e-mail Airlines generally post the offers Wednesday for flights departing the following Saturday and returning that Monday or Tuesday. Airlines are expanding the offer to include discount hotel rooms and special car rental rates as well as fares to destinations in Mexico, Canada, Europe, and Central America.

Bankers going two ways.

You run a large bank on the Internet there's two options to get your customers on line on the Internet. Option 1: Keep your old mainframe and its processing facilities and put a system out the front to talk to the Internet. Suppliers of this technology include Five Paces, Intuit, IBM, Block Financial. Suppliers of these systems charge for each transaction plus the fee up front for the license. Option 2: A number of companies are developing a protocol or standard for the transmission of financial transactions across the Internet.

There are four main players: Visa Interactive with ADMS and EBMS - Microsoft with the OFS connectivity standards - Intuit with the Open Exchange message standards and Cybercash with their standards for encryption and processing of online payments and micropayments The banks system talks to the standard, through other vendor software on webpages and devices which comply with the standard. Cashflow to the vendors is a fee per transaction. Don't hold your breath. The standards are not consistent.

AOL push into Electronic commerce.

Delayed but coming is America On Line's (AOL) entry into business commerce. Probably by the end of April AOL users will be able to conduct secure electronic commerce transactions, driven by a new IBM technology called DataBolts which will let users add capabilities to Web pages without extensive programming.

The service will use three DataBolts: Query & Retrieval for searching the Web; Cryptolope, an encrypted software "envelope" for handling and tracking billing; and NewsTicker, which streams content from 62 different publishers. http://www.pcweek.com/news/0224/27eaol.html

Up to the minute training

Instead of a library of CD-ROM's real time real-time, networkable multimedia tolls can now be delivered over the Internet. Street Technologies Inc. StreamMaker integration and authoring tool enables delivery of audio, video, graphic animation, and data over the Internet or Intranets directly to the desktop. Street recently signed an agreement with CBT Systems, provider of interactive education software, to distribute that company's IT training materials over the Internet. Demo

SURVEYS

Price Waterhouse: Internet Commerce Figures

According to a study from Price Waterhouse, the value of goods and services sold via the Internet is expected to reach anywhere from $175 billion to $200 billion by 2000. The number of world-wide Internet users stood at 35 million at the end of 1996, with 25 million of those in the United States. By 2000, about 163 million people are expected to be online, with the biggest growth coming from Japan and Asia, according to the Technology Forecast: 1997.

US Online Travel Sales

According to a poll taken at the launch of a new Intranet/Internet travel reservation and booking system, two-thirds of top US firms expect their business travellers to be using a corporate interactive booking system within two years. Almost 200 executives were polled at a preview of 'Rome', the Intranet/Internet travel reservation and booking system being developed by American Express and Microsoft.

Intelliquest: US User Figures

According to the latest survey from Intelliquest the number of adults on-line in the US totalled approximately 47 million at the end of 1996. This represents a 34% growth in the on-line population from early 1996. Only 4.25 million of these are using the Internet and on-line services for more than 20 hours per week. The gender divide has narrowed with females comprising 45% of the on-line population. 11.7 million people planning to begin using the Internet or an on-line service in 1997.

The study also found that 22.3 million users primarily access at home, with 13.3 million people accessing from work and 6.8 million from school.
http://www.intelliquest.com/about/release24.htm

Business trends in the US and surprise surprise

The latest report from American Business Information Inc. of Omaha on the fastest-growing and declining types of businesses in America say that surprise Typewriters shops are out Internet is in. Among ABI's top six gainers, Internet services exploded from almost nothing at the beginning of the year. Computer and telecommunications were also pacesetters in 1996, as were bagel shops and tattoo artists. Decliners were Comic book shops Coffee shops which ABI said are being replaced by portable coffee kiosks.

Internet news - first for a daily.

The Dallas Morning News scooped its print version by putting an Internet version up hours before printed editions were on the street. The paper decided to put a jailhouse confession by Oklahoma City bombing suspect Timothy McVeigh on its World Wide Web site on a Friday afternoon seven hours before the story would appear in print. Opinion is divided on whether the paper was avoiding a legal injunction or just getting the story out fast

Telcoms desperate to cash in on the traffic?

In the US many Telcos have filed petitions with the Federal Communications Commission (FCC) to allow them to tack a surcharge onto Internet-access calls. In a preliminary decision in December, the FCC rejected their request for Internet-access fees. But the FCC is now revisiting the issue and is expected to come out with a new ruling in May.

Phone companies world wide face a simple problem. Individuals and businesses who dial into the ISPs' lines are overloading the phone system by staying on-line for hours at a time. The phone network was designed to handle short, intermittent calls, not someone staying on-line all night. Telcos also face future competition from wireless technologies, direct broadcast satellite (DBS), cellular and personal communications services as well as radio and TV broadcasters, will also provide competition.

U.S. Robotics rolls out 56K modems

U.S. Robotics Corp. said it began shipping new high-speed modems that allow customers to retrieve information from computer networks and the Internet at nearly double the speed of current modems. The new modems operate at speeds of as much as 56,000 bits per second, or 56K. Meanwhile, America Online Inc. said it would begin general testing of the new modems today.

U.S. Robotics is in a head-to-head battle with Rockwell International Corp. to bring out the first 56K modems. Rockwell has said modems containing its chips will be on store shelves in March. U.S. Robotics' shipping plans were delayed a week by what it called ``last-minute'' final testing.

Online computer store forecasts growth

After nearly a year online NECX Direct is averaging 200,000 hits, or files accessed, per month. Scott Randall, NECX Direct's general manager, said about 10 percent of visitors end up making a purchase, accounting for 70 percent of the division's revenue. He said that, growth in product sales, advertising, and membership fees, revenue will reach $50 million this year, 10 times that generated last year.

The Internet means anyone with Internet access can enter the store, and get more information about a product than they'd ever get a computer-store salesperson and the product will be cheaper. The online store is linked electronically to NECX's two distributors, Ingram and Merisel, which ship orders directly from their warehouses. Ordering, payment, invoicing and inventory management are handled electronically. NECX figures the savings on these and other operating efficiencies into its prices.

Advertisers dream

Think about it. An advertiser puts a page in the paper. What where the names of those who read it?. Can the advertiser get in touch with them? Did they go on to buy the product? On the Internet all those and other questions can be answered. Soon. And while you are advertising on the Internet while they are reading the ad you can make a sale - right there and then. As a consequence the old barrier between advertising and sales will be irrelevant on the Internet.

"Our message right now is that your entire world is going to change," says Craig Danuloff, president of iCat Corp., a Seattle-based producer of electronic catalogue software for the Web. "You had retail, and then you had mail order, and then you had outlet stores, and now you've got a totally new vehicle."

Firewalls getting cheaper.

Firewalls - (software that protect networks from unwanted 9internet visitors are getting cheaper. Market research from International Data Corp. indicates that there are 7.8 million small businesses in the US, - 70 percent have PCs, but only 15 percent have Web sites. These organisations don't have the IT infrastructure to implement the necessary hardware and software to secure their networks from unauthorised Internet access. Watch out for cheaper firewalls getting a lot more small to medium sized business on line.

Comment

The Barriers to Internet Trade.

The Internet's potential to do what other mediums already do is being tested every day. Newspapers become electronic newspapers, retail stores become Internet stores with product accessible world wide twenty four hours a day. Same content. Different place. Dramatically cheaper.

Last month four doctors at the Wayne State University Michigan, performed and operation broadcast live on the Internet. The operation was watched by doctors across America and Argentina. During the operation, surgeons talked to viewers at the other end of the line, and answered questions. They took advice during the operation.

The Wayne State operation was transmitted for a total call cost of about 40 cents, compared to more than $AU5000 an hour for satellite. A recorded video would not allow live questions. Flying the participants to Pontiac Michigan, accommodating them, would have been expensive, wasted hours in transit and a few would fill the viewing area.

But the next stage will surely be taking full advantage of the Internet to do totally new things.

There are a few simple mundane barriers:

You are who you say you are
This document is what you say it is
This is what we claim
This is your money.
You did this when?

Who are you

Once both parties to a transaction have established their bone fides its possible to do business with some confidence. Solutions so far have been the issuing of electronic Ids, passwords to confirm identity the exchange of coded acceptance notes.

This document is what you say it is.

One solution has been IBM's encrypted envelopes, another is secret keys buried in the coding of the document format. Still to come are techniques which track changes in a document by whom they were made and when they took place.

This documentation problems have been faced and solved before. The notary public in the age of Dickens strove to authenticate that a document was what it said it was - issued by whom it stated and belonged to the party presenting it. Oaths and affirmations and large wax seals served well in a more pious age.

We may need locations where you can present a suitable ID, your document, scanned or digitised and received an authentication code encrypted to a 128 word level safely tucked inside the file for transmission down the Internet.

This item is what we claim it is.

Art dealers use certificates of provenance, which hopefully give some credence that a picture or item of antique is authentic. What if we were able to give electronic provenance and certification for flowers, wool, sheep carcasses clothing antique cars and a guarantor was available to underwrite the transaction.

There could be world wide auction in commodities, between guaranteed bone fide buyers, dealing in authenticated certified products. Like the Wayne State operation there would be enormous savings. The crops or items could leave the farm for the ultimate buyer anywhere in the world. No wasted fuel taking it to a selling place, and the valuable time of buyers flying in from vast distances.

This is your money?

To avoid some kid from Hoboken making a serious bid for the South Australian Marino crop we need the electronic equivalent of cheques, the letters of credit, bankers drafts and identification of bidders.

In general the barriers are the same as when business began to be done between people who did not meet each other at the corn exchange, the local mart. Who needed mechanisms so they could do business by paper transactions with strangers far away.

They solved it with authentication, certification, registration, provenance, atestment, guarantors and letters of confidence between registered certified professionals and the Internet will do the same.

A world wide effort in an enterprising market interconnected market means the solutions are coming thick and fast. It remains to the players to select and adopt the better portions.

That done immense value can be added in the migration of auctions, consultancies, information bureau's, educational endeavours to the Internet. New ventures are just over the horizon.

Epochs ago, before the age of paper and the telegraph humble traders loaded their camels for the long dangerous travail over the silk road with some prospect of profit and the possibility of returning alive to spend it.

We have such prospects as they could not imagine