The flotation of online travel and entertainment broker Lastminute.com last week saw net gold rush fever reach a new high in the UK, making the cover of not one but two of the tabloids (The Sun and The Mirror). Short-lived hype, or evidence of deep structural change in the economy?
To answer this question, Computing has set up a special panel of 10 UK IT experts, drawn from end-user organisations, consultancies and recruitment agencies. We'll be returning to them in the coming months to help deepen our understanding of the dot com phenomenon. This month, we asked the panel what effect the fuss is having on keeping staff.
Daniel Gestetner, managing director, Shopsmart.com
The internet is about creativity, idea, speed - but the factor missing from all the glamorous features is that it's bloody hard work.
Startups should have a government health warning. However, quick-buck merchants feeding on the hype, who throw together a site with not much experience and not much thought for the customer, are potentially our worst enemies. The hype means that we may see ideas fall at the first hurdle, which is a terrible shame. These guys are in it for the short term, and consumer loyalty isn't as important as the initial public offering and the size of their wallets when it's sold. We don't want to be tarred with the same brush.
David Wood, retail systems manager, Do It All
It does put pressure on executives, because they are realising that existing companies need an internet presence to survive, and that key staff are gaining bargaining power. However, companies are learning from the US experience that there is greater scope for commercial arrangements with ecommerce companies, without needing the retention and expertise in-house. Finding and retaining staff then becomes someone else's problem.
Alan Boxer, managing director, The E-Centre
Ebusiness is important to the UK's economy, and the hype serves to raise awareness of the internet's business potential. However, it can be misleading, and no one should jump into a startup with their eyes closed. We have a real misapprehension - 80 per cent of the current publicity surrounds business-to-consumer ebusiness, whereas 80 per cent of the real action is in business-to-business.
David Spinks, business development manager, AEA Technology
The hype has led to a situation where startups are ignoring even the most basic rules of business and security. The IT security industry is watching this cavalier attitude with some delight. It's no wonder that we see so many security breaches. The potential fortunes and possible losses made in these 'empty' virtual organisations may well be staggering.
Governments and regulators will have to act to prevent major economic disasters from occurring.
Ralph Seeley, principal consultant, Cambashi
Most of our staff will know at least one person who has become a millionaire in an IT startup. This is both exciting and unsettling. It increases expectations and loosens ties based solely on loyalty. In this respect, we are seeing the evidence already. The term 'frenzy' might be applied to share prices, but it should not be applied to individuals wanting to join organisations where performance and rewards are more closely matched - or less arbitrarily mismatched - when compared to an old-fashioned corporation.
Patrick Ballin, management information systems manager, The Body Shop
The hype has had a marginal effect on our day-to-day work. We have lost a couple of staff members to internet startups. One interesting side effect, though, is that the intranet development business we work with has attracted some very experienced information security professionals by offering stock options - which is helping them provide users with a better service.
Frank Coyle, IT manager, John Menzies
The effect at the moment is minimal, but I believe that it will become more of a problem. There is only so much good IT ability around, and startups are much more interesting and lucrative. In addition, if all goes well then those involved will simply go back to an IT department. Thus, there is no long-term risk involved.
Richard Lloyd, director, Robert Walters Intellimark
It is making traditional industries more aware of the value of candidates - they are putting together far more lucrative packages. Increasingly, they are offering separate terms and conditions to ecommerce staff in an attempt to lure them. Meanwhile, candidates are offering themselves to the market at two very different levels - one salary level for the dot com, and one for everyone else.
Pat Gaffey, head of ecommerce, British Airways
There are three reasons for working on an ecommerce project: money, interesting work and stock options. We can offer the first two, but not the third.
We are setting up the ecommerce division as a separate company, with different remuneration on a different site. It isn't rocket science - but the rationale is to retain good people.
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