Internet World: IBM's Gerstner predicts customer backlash (540)

Customers are confused and exasperated by the feuding in the Internet market, according to IBM chief executive Lou Gerstner, and if suppliers aren?t careful, there will be a backlash.

Gerstner?s warning was the central theme of a keynote address to the Internet World trade show in New York on Wednesday. He cautioned vendors attending the show that end users were beginning to display signs of what he dubbed ?Net weariness?, a condition resulting from a combination of excessive hype and increasing disillusionment with suppliers.

"A lot of what?s gone on in the last 12 months is just plain confusing and exasperating to our customers," he said, dismissing supplier battles for dominance as "food fights". "I wouldn?t be surprised to see an Internet backlash soon."

In a no-holds barred address, he hit out at the IT industry?s habit of jumping from one "big thing" to another, citing the oft-predicted death of the mainframe as an example of how fickle received wisdom can be. "It just didn?t happen," he declared. "We?re shipping more mainframe computing power today than ever in the history of our company or the industry."

He warned that the Internet bandwaggon was getting out of control. It is, he said, time to start substantiating some of the claims made for the Net. "As an industry, we are not shy about telling people how beautiful our babies are, long before they are born," he said.

Customers are confused by all the claims and counterclaims made by suppliers, he went on, and this is leading to scepticism about the commercial potential of the Internet as a platform for doing business. "People ask ?Is there real money to be made on the Internet?? and I say ?Yes there is,?" he said, citing IBM customer, stockbroker Charles Schwab & Co, as a prime example of a company that is successfully exploiting the Internet?s potential.

Charles Schwab, the US? largest discount stockbroker, this week decided to allow foreign investors to begin trading domestic stocks via its Web site. (see story, 09/12/96). "Schwab expects to capture as many customers with the Internet over the next year as they have over the past 13 years," Gerstner told conference attendees.

To illustrate his concern about industry in-fighting, he chose the example dominating the attention of everyone attending Internet World: Java. "Let?s not blow this," he urged, emphasising IBM?s backing for the language. "Let?s not do to Java what the industry did to Unix."

Having made his point about industry peace and cooperation, he succumbed to the inevitable temptation and proceeded to take a side-swipe at Microsoft, accusing it of being slow to open up its software to the rest of the industry. "A world populated by closed or semi-closed architectures takes away choice,? he said.

What customers needed to see now were consensual open standards. If these do not appear, then the network computer revolution will be slowed down and the Internet will not become the integral component of US households that it might be.

This year alone, IBM will spent $1 billion on Internet research - 20 per cent of its annual resarch and development budget. "We have to adapt and enable every product in our portfolio to work with the Internet," said Gerstner.

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