The Digital Revolution Continues
We have been suffering through a prolonged period of economic weakness and uncertainty. The stock market has not been stable for years now, swinging in hundred point shifts on a weekly, and sometimes even on a daily, basis.
We all remember very clearly how this mess was started; it was the bursting of the dot com (technology) bubble, and things have never been the same since. With retirement accounts bleeding and savings accounts diminishing, few people want to hear the latest technology news. Yet, technological innovations continue to provide new competitive advantages for those who are putting tomorrow’s growth engines in place today.
Just as a flash of bright light can temporarily blind us to our surroundings, so too can a crisis blind us to the opportunities around us. Don’t let the bursting of the dot com bubble blind you to the fact that the digital revolution is alive and well, and will continue to drive changes in how we live, work and play.
Tidal Waves of Change
When there is a tectonic shift out at sea that triggers an earthquake, tidal waves are created. Because of the great depths of the ocean, the waves are very small, yet the energy from the earthquake can cause the small waves to reach speeds of up to 500 mph. As the waves get closer to shore and the water becomes shallow, they slow down and build, often to great heights.
A few professional lookouts, in this case technology forecasters and futurists whose job it is to look out at the horizon, saw the approaching waves of technological change. Most of us, however, spend little time looking at the horizon. Instead, we concentrate on avoiding the obstacles in our current path. Using this tidal wave metaphor, the dot com wave caught many businesses and individuals by surprise and as the wave subsided, it washed many of the bad business models out to sea.
When a tidal wave strikes, it is usually followed by a few more waves. The next e-business wave of technology-driven change is fast approaching, and once again, few are ready. I would call this wave a “smart” wave because venture capitalists and stock market investors learned a great lesson from the first wave: a plan for profitability and an understanding of sales, marketing, fulfillment and customer service, among other, are important.
The Quiet Revolution
The digital revolution continues, but the buzz has gone underground. The investing public blames over-hyped technology news for much of their financial pain and is no longer interested in it. However, this lack of interest has not stopped the revolution from moving forward.
For example, if you have tried to register a dot com or dot net domain name, you have run across VeriSign, a company that runs the world’s largest registry for domain names. You might think interest in registering a new name has faded during the past few years. Think again! In 2001, the company managed 2 billion lookups, but this year the numbers indicate it will mange over 8 billion.
If you look at the latest statistics for the number of Internet users, the average number of Web-surfing sessions people have per month, and the time spent per session, you will find double-digit growth.
B2C and B2B are Alive and Growing
The most popular uses for the Internet are e-mail, chat rooms and instant messaging, but people are also spending money online at ever increasing rates. For example, in 2002 e-commerce spending rose 34% from the previous year, totaling $48 billion, and it’s not letting up this year.
If you had invested in some of the largest and most successful Internet stocks two years ago, you would be quite happy today. For instance, over the past two years, eBay’s stock has gone from $35.50 to $89.29; Amazon has gone from $8.37 to $27.18; Yahoo has gone from $14.81 to $24.38, and Expedia has gone from $7.40 to $54.86. Their current prices might be getting a bit high again, but the message is clear: the Internet is alive and well and profiting.
Two organizations have recently published their B2B statistics and projections, and they are very impressive. Gartner states that the value of non-financial goods companies will sell and resell online this year will total $3.6 trillion, and they estimate that by 2005 the number will balloon to $8.5 trillion.
Over the years, Gartner has shown a tendency to estimate on the high side, so let’s look at a company that tends to err on the low side and see what we get. IDC estimates that B2B will hit $1.43 trillion this year and the number for 2006 is $5.12 trillion. Even with this more conservative estimate, the numbers are still very impressive and indicate that the revolution is far from over.
The Evolutionary Revolution
In 1999, as the Internet hype was nearing its peak, I predicted that the revolution was real, but that it would take more time than the popular press and instant Internet gurus would have us believe. In hundreds of speeches during that time, I stated that the real revolution would take place inside what the press called “old economy companies,” like Procter & Gamble, Merrill Lynch, Kohls, Exxon, Merck, Northwestern Mutual and General Electric, as they used e-business tools to reach new levels of productivity and efficiency, and we would see the positive impact on their stock prices starting around 2004. It would take that long for the human part of the equation to change how we think about how we do business in a networked world. So far that prediction is on track.
At this point, it is important to ask yourself: Are you spending too much time managing the current crisis and not enough time managing future opportunities? The Waves of technological change are coming. Are you ready?
Daniel Burrus, one of the world's leading technology forecasters, business strategists, and author of six books
Copyright 2003 Author retains copyright. All Rights Reserved.
