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E-Commerce: Old is gold - Views on News from Equitymaster
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  • Nov 18, 2000

    E-Commerce: Old is gold

    The best thing about the digital age is its pace of change. Especially, after the Second World War the technological developments started taking place at a very fast pace. Thanks to the billion and billions spent by the defence industry on the universities in the US. But where are we getting. The point is that things are changing at such a fast pace that they are obsolete before they already set in.

    The ARPANET project that was meant to be used for communication scenario in the worst situation gave birth to the Internet and therefore, a whole new world of opportunities. The fundamental business models of organisations changed. The consumer/supplier could be reached at their home/office. That was how e-commerce came into being. Those organisations wondering what to do after Y2K got a fresh lease of life. Today both of Indiaís infotech majors (Wipro, Infosys) owe huge portions of their revenues to e-commerce. Infact eĖenabling businesses could drive the revenues of software majors for quite some time to come.
    ($ in bn) FY98 FY08 CAGR
    IT services 2.1 38.5 34%
    Software products 0.6 19.5 42%
    IT enabled services 0.4 19.0 47%
    E-business 0.2 10.0 48%
    Total 3.3 87.0 39%

    Source : NASSCOM

    But wait. Convergence is here. As if selling to you at your home was not enough. Now organisations want to catch you on the move or while you are watching your favourite TV channel. That gave birth to M-commerce and T-Commerce. M-commerce stands for mobile commerce wherein the point of interface with the customers is their cellular phones, laptops and palmtops. This is possible thanks to Wireless Application Protocol (WAP). The mobile phones, cellular phones, laptops talk to a WAP gateway. Data is exchanged between the WAP gateway and the hand held device using WML (wireless markup language).

    WAP mainly does the job of identifying your machine as a part of the Internet and manages the transmission of data between your device and the WAP gateway. M-commerce business is burgeoning and will hold attention for some time. But it has its own set of detractors. Wrong Approach to Portability is another name for WAP. A survey in London in mid this year reveals that WAP always had low usability. Factors contributing to this were primarily small screen (for cellular) and low bandwidth. But surely, we canít write m-commerce off though it will take its own time to come around.

    Another place where the prospective customer is found often is in front of the TV set. An average American, it is reported, watches TV for almost 28 hours in a week. Hence Internet over TV or rather, over cable becomes another option. So in comes T-Commerce where in the transactions are done over the television. There are predictions that t-commerce will over take e-commerce by 2004.

    It does not stop here either. The next jargon is V-commerce, which stands for voice enabled electronic commerce. Natural speech recognition is the selling point here. One problem that users who use the computers to access the Internet, face is that they spend a lot of time in typing. If the data could directly be fed using speech it will have a great market. After all, one of the biggest software success stories of our times, Microsoft was once making things easy for users. (But today itís a totally different story.)

    According to IDC Research, up to $400 billion worth of goods and services will be exchanged over the Internet by the year 2002. The winner will be those who can make the self-service transaction a pleasure for the customer Ė where they want it and the way they want it. After all consumer is the King.

    But as of now all these new technologies are slightly more than jargons. What is there is e-commerce and of course all of these are built on top of it. The best thing for organizations is to concentrate on e-commerce that will become the critical infrastructure for all future technologies to come. And mind you, e-commerce is not just buying and selling over the Internet. Itís a whole new way of doing business - the only way in times to come.



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