Internet World UK: Net commerce still to take off outside US

It seems that there is an abundance of talent available in the UK to undertake Internet development work, and that some good native products exist, but demand is still at an early stage.

The Internet World UK show at Olympia in London recently provided an opportunity to assess new developments, but compared with any equivalent show in the US, the evidence so far is that the Internet commerce take-off in the UK has yet to come.

At the show, Cable and Wireless launched Web-Commerce, targeted at small to medium-sized businesses. Citibank showed its online banking services, which looked very different from the pioneering Prestel effort introduced by the Bank of Scotland many years ago.

Also, E-business Plus showed its Cardinal secure Web management software, based on Lotus Notes/Domino and Software Spectrum, which was jointly developed with the government IT procurement agency, the CCTA. This body uses it to run Direct Access for Government.

Despite these promising launches, the ecommerce business shows little sign of taking off in Europe, compared with the US. The differences seem to be more cultural than technical, with Europeans generally being more inclined to want to see a product before buying it.

There were several companies offering enterprise level electronic commerce, including Gresham Computing, IBM, and IS Solutions, but the number of start-ups in this sector is miniscule compared to its US equivalent.

However, venture capital does seem to be available for those that do take the plunge. Andrew Foyle, the 26-year old founder of Sussex based Argo Interactive, managed to get #1 million from VC giant 3i and launch a server software suite for network computers, set-top boxes, personal digital assistants and other thin clients.

ZY.com of Hemel Hempstead is a recent start-up that has developed a Web publishing system that does not require software to be downloaded. Everything can be done by accessing a ZY.com server using a browser, which has the advantage that the user does not have to upgrade the software, although there is of course still a learning curve.

Again and again there was the usual evidence of good products being developed, but they were not supported by good marketing, whereas the inverse is so often the case in the US.

Also, the case for real business benefits is not proven yet. It seems that quite a few major companies are now feeling their way on the Web, but that it is generally too soon to assess the benefits, or exploit the Web for heavy duty commerce. The success stories were relatively few, because most businesses and consumers do not yet automatically turn to the Internet to find a product.

There were several new products being shown that require better Internet reliability and bandwidth before they are likely to take off, particularly for Internet telephony, fax, and conferencing. Analogue modems at 56Kbps seem to have reached the end of the technological road, and attention is now moving beyond ISDN's 128Kbps.

The problem at the moment is that cable and satellite Internet access require a two-path system, with conventional modem access via copper wire for the upstreaming. Users of cable access to the Web are likely to find that downstream performance degrades if several neighbours are doing the same thing, although bidirectional cable modems and more modern cable systems are now capable of providing the upstream path.

DirecPC is able to provide a 400Kbps satellite downstream path today, but at present the price makes this something for high volume business users only. A solution to exploit existing copper cables using an asymmetric digital subscriber line (ADSL) at 8Mbps is likely to be the future technology for home users.

The service sector is of course very active, but there is considerable turnover. There are around 50 members of the ISP Association offering Internet access services in the UK. U-Net, currently sixth in terms of subscribers - it has 23,000 and is based in Warrington - is an example of a an experienced ISP that has to maintain nearly 2,000 lines, which it gets from Energis and Cable & Wireless.

Its 'no free trials' policy allows it to avoid the ISP hoppers that can swamp a service during the free trial period, with the benefit that a steadier standard of service can be offered, which may account for a doubling of its 1997 subscriber base. U-net also runs the UK universities' Janet network.

It is clear that many ISPs in this highly competitive sector must be operating on very slim margins, so considerable consolidation is likely. The fastest moving and perhaps most interesting developments on show at the exhibition were in machine translation. Three vendors - none British - were showing their wares, and provided the bemused and distinctly non-polyglot UK attendees the opportunity to see email messages instantly translated, even from oriental languages.

The design and usability of many products appeared to be good and well thought out, but there was little that could be truly described as really innovative. The market is becoming increasingly competitive, so that the quality of marketing and management is more important than the particular ingenuity of yet another mousetrap.