E-commerce will soon be powerful enough to define de facto standards for a single global currency, according to industry analyst Robin Bloor.
The prediction comes in Bloor?s latest report, eRoad: Everything you always wanted to know about e-commerce but were afraid to ask. The traditionally conservative Bloor seems an unlikely Internet evangelist, but his report reads like Utopian science fiction. He describes a world where a single currency reigns - either the euro or the dollar - selected by common consent of Internet patrons. He predicts the end of high-street banking, in favour of banks that are entirely web-based. Web commerce will almost completely replace all other forms of transaction. Companies which are not entirely web-based, he predicts, will be dead within a year.
?The Internet is a new medium and will become the dominant medium. It will supplant and marginalise all of the earlier media - newspapers, television, radio, and the music industry,? the report said. Banking, retailing and insurance are characterised as ?sectors in chaos? that will undergo dramatic change. Banking, in particular, will be transformed as individuals become their own banks, leaving financial institutions to carve out a niche for themselves as specialist traders.
Bloor predicts that retail and insurance will see levels of competition reach far beyond anything they have ever experienced, forcing rationalisation on a worldwide basis. ?The next wave of computing will involve networks and distributed processors linked in to the web. These will use Java to manage machinery, buildings, vehicles and the home.?
Many will agree with Bloor?s conclusions, but most would predict such changes for the distant future. Bloor, on the other hand, believes it will all happen very quickly. ?Internet commerce is growing at about 8% a month and we are already seeing electronic trading have a massive amount of impact on some markets,? he said.
In the US, 20% of stock market transactions are already web-based. According to Bloor, this has led to stockbrokers who were slow to provide a web service losing a significant amount of business. Some sectors will be quicker than others to shift to e-commerce. Users are reluctant, for example, to buy and sell insurance over the Internet, although they are happy to buy and sell shares. But the main reason that companies will have to move to the Internet is to remain competitive. Web-based business costs are about a tenth of those within conventional business. ?Those are the sort of figures that drove car manufacturers from Europe to cheaper Far East countries,? Bloor said. He cited the example of US electronic auctioneers who were able to handle a million bids for one item at a tiny cost.
?It is sheer economics that will drive businesses to change,? he said. Also predicted is further standardisation, not in software, but in currency: ?Web users will only use those currencies that are fairly strong for their transactions and so others that are not strong enough will have to adopt the stronger.?
To the horror of privacy protection evangelists, he believes that every one will be given their own number or name that will register them anywhere in the world and be stored on the Internet. Sharon Saw, senior analyst at Saw IT, said that while she agreed with the thrust of Bloor?s Internet vision, she disagreed with the timescale he predicts.
?The Internet is in a poor state of repair to take the sort of business that Bloor envisions. Bandwidth levels and actual sales interests are too low for a total business commitment,? she said. She adds that only substantial investment in infrastructure by governments can turn that around. Bloor concedes that there are problems with bandwidth, but insists that the Internet is already sturdy enough to change the face of business.
Report by Nick Farrell.
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