Many of today's ebusinesses will discover that technology takes a path that simply doesn't fit into their business plan.
The biggest challenge to commercial exploitation of the internet over the next couple of years will be in the shift to broadband. Some will strike gold; others will dig a lonely hole for themselves. The safe money will be with the picks and shovels salesmen: Cisco, Real Networks, Arm, Vodafone and so on.
Put simply, broadband means having a wider range (band) of frequencies. Access to the internet is currently delivered through the narrow band of voice telephone networks.
In the days before the web, the telephone network (referred to as pots, or plain old telephone service) was more than sufficient. Computer bulletin boards were either text-based or used low-resolution narrowband graphics systems such as viewdata (for example, Teletext).
The web brought graphics, then sound, and now streaming audio and video links, demanding more data to be sent down those plain old telephone cables.
A standard computer modem takes digital information, turns it into an analogue signal and feeds it down the telephone line. Incoming data is processed in reverse to recover the original digital information.
While the 1200bits per second (Mbps) speed of 1980s modems was fine for text-based networks, the current standards of v.90 modems (about 45Kbps) or even ISDN (64Kbps or 128Kbps by using two channels) is proving the major limiting factor on what can be done with the internet.
Broadband brings speed
Broadband technologies provide access to the internet significantly faster than traditional modems, and generally provide 'always-on' access, where the connection between a computer and the ISP is permanently left open, rather than requiring a dial-in.
The primary competing technologies in broadband access are asymmetric digital subscriber line (ADSL) and cable modems, although there are a range of other options. Both of these services provide speeds in the region of 512Kbps to two megabits per second (Mbps) - eight to 32 times the speed of an ISDN channel.
Enabling pay-per-view video broadcast over the internet is one of the more talked about prospects, but the results of pervasive broadband access will be far more wide reaching. For example, the current thinking in web page design is that you need to find an appropriate balance between strong design and page download speed - 15 seconds of downloading, or around 64Kb of data - before your page at least starts to show up is considered an upper limit. With an ancient 1.2Kbps modem, a web page would have had to be just over 2Kb, or around 500 words of plain text, before you started losing potential customers. At 512Kbps you would have to exceed a megabyte of data.
A fast broadband connection can offer interactive TV services. Beer-budget radio stations will be able to broadcast CD-quality audio with a coverage in the hundreds of millions of receivers. Music publishers will be able to distribute their wares directly to the public with painless download times for anything short of a Wagner epic.
Any media that can be transmitted digitally will suddenly have a new, flexible and very cheap distribution channel.
Sony's reluctance to match arch-rival Sega by providing a modem for the Playstation 2 is because it wants to wait for broadband instead. It hopes to position its platform as the primary platform for general digital content delivery.
Tests on broadband and always-on systems have revealed a significant change in usage patterns. Consumers with this kind of internet access, spend, on average, more than three times as much time and twice as much money online as their dial-up counterparts. While early adopters of broadband will be enthusiastic about the new medium, broadband will introduce a major shift in consumer purchasing habits. Estimates for the value of consumer ecommerce exceed $200bn within the next two to five years.
While business-to-business (B2B) ecommerce sites do not need the same bandwidth as a media site, the always-on model of internet use will have significant repercussions here, too.
The automotive industry has been quick to jump onto the B2B advantage, putting in place B2B networks that speed up the process of dealing with procurement, allowing lower redundant stock levels and lower prices. Nick Scheele, president for Ford in Europe, estimates this initiative alone will create savings of up to $900 per vehicle.
Increased pervasiveness of the internet can only drive this trend into every aspect of business practice. It's no wonder Scheele said the internet would "have as great a transforming impact over the next 20 years on manufacturing as the Industrial Revolution had 200 years ago".
Always-on broadband access will also have significant impact on the way many services are delivered. Connected home appliances will open up the possibility of off-site maintenance and diagnosis, while connected checkout tills will allow on-demand automated stock ordering to be a viable option for a corner shop.
Current GSM networks offer on-demand 9.6Kbps signals for mobile phones - this slow speed is the reason for offering low-bandwidth Wap services. This will change with the introduction of the third-generation (3G) wireless networks and GPRS (general packet radio service). GPRS is a cost-effective path to always-on wireless internet access with a high bandwidth - BT Cellnet claims its offering will reach speeds of 171Kbps.
Although early offerings aren't likely to achieve anything like these speeds, we can eventually expect to see 3G technologies at 2Mbps.
The third generation
3G networks will make truly portable computing a viable concept. With sufficient bandwidth to provide remote desktops, voice over internet protocol (VoIP) services, teleconferencing and eventually shared virtual spaces, it would be possible to turn an office from a set of desks to a set of IP numbers, accessed from machines anywhere in the world.
While a 2.5in screen may mean that no one's really keen to watch a movie on their mobile phone, GPRS's positional feedback could be used to show trailers of movies at the nearest cinema. An increasing proportion of many marketing budgets will be used to provide alluring content to mobile users over the coming years.
There are currently about 200 million mobile phone subscribers, and that number is set to soar. The value seen in the market can be gauged by the size of the recent bidding for 3G mobile licences in the UK, which raised a total of £22.5bn from TIW, Vodafone, BT, Orange and One 2 One. Mobile broadband will start rolling out this year, and advances in personal digital assistant (PDA) and phone technology are shaping up to take advantage of it.
With high-speed internet access around the corner and mobile phones appearing with advanced features such as colour screens and Java support, companies investing heavily in Wap may find that they are taking the low bandwidth road when they ought to be on the high bandwidth road.
Opening the loop
A longer-running complaint has been that the UK government should have forced BT to open the local loop long ago.
ADSL offers broadband over standard two-wire telephone systems, using the 'last mile' connection from the exchange to the customer's home or business, but without access to the exchanges, ISPs are unable to offer it to customers.
ADSL trials have been taking place for years now, but BT has shown great unwillingness to introduce it fully. This isn't surprising, as ADSL will wipe out BT's relatively big ISDN business and impact on its call charge income, particularly when VoIP becomes commonplace and starts to supplant analogue telephone use.
When BT is finally forced to open the local loop, we can expect to see a flurry of land-based broadband offerings. Unfortunately we are one of the last countries in Europe to roll out ADSL. Worse, the BTOpenWorld ADSL service is slow and expensive.
Stiff competition between cable operators and telcos in the US meant many areas have had ADSL for some time - usually between $20 to $40 per month compared with BT's £40 per month base offering - and often with twice the bandwidth.
Broadband UK isn't really the truth. We've had our eyes closed to broadband for too long - distracted perhaps by the diversions of free internet access and free internet calls. Now that broadband is here, we'll have to open our eyes to its possibilities as quickly as possible to retain a lead in the European internet market, and take advantage of the huge growth expected as it plays catch-up with the US.
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