Internet Technology (Part 1 of 2): What the Net Is, and What It Will Be
The last few years have seen the Internet go from a backbone network for governments and universities to a technological and economic explosion without parallel in modern times. The Internet is rewriting the international economic landscape almost overnight and, in the process, is affecting our lives dramatically.
In 1993, when the Internet became officially commercial, early commercial sites were basically inoffensive pages of information and images on college and university sites. The early "business" sites were usually on inexpensive servers, often in someone's home office or basement. Although there were other technology phenomena in the 20th century, such as the automobile, radio, television, transistor, and jet engine, none have become as pervasive in our society as the Internet. The relative inexpensiveness and universal availability of the Internet have ensured its phenomenal growth. The inexpensive transistor radios we today take for granted cost over $50 dollars in the mid-1950s when they were introduced. This is comparable to today's high-end Palm Pilot. Although Palm Pilots are quite popular, they're still far from being household items. It took 10 to 15 years before every teenager in America had a transistor radio of his or her own. The same is generally true for any emerging technologyexcept the Internet.
Previous consumer trends that form the usual S-curve seem to be dramatically reduced in relation to the Internet. Since the Internet is not a consumer product, its direct impact on society can't be measured according to units sold. In fact, people who have never used the Internet or don't even know what the Internet is (highly unlikely!) are still being affected by the Internet simply because it exists. Internet technology is revolutionary because it's one of the few technologies to go from emerging to pervasive almost overnight!
What the Internet is Not
The Internet is not a product; it's a service. Although it's used to sell products, the real economic value of the Internet is realized when corporations develop a business strategy for the Internet. To maximize its utility, the Internet must first be viewed in terms of its current role in the world economy as a whole.
The Internet is an information-delivery system. Networks can be viewed as markets in themselves, but the true value of a network is its access to markets, and more importantly the creation of markets. These markets, as they're created, define new generations of businesses. The concept of buying and selling dates back to the dawn of man. Who can say when the first Cro-Magnon bought a fresh new lion skin with a useful bone or piece of flint? Technology has allowed the idea to evolve steadily and measurably, becoming part of our everyday culture and language. There was no such thing as "telemarketing" until the telephone came along. It took quite a while after the telephone was introduced to business before the very concept of telemarketing caught on.
The Internet is comparable to what the telephone was 100 years ago. The phone was a useful commodity that, at first, only the well-to-do could afford and utilize. It was by no means the common household item it is today. A household with a telephone in the 1890s was similar to a modern-day household with a PC and Internet access. Today, the limit on the growth of household access to personal computers, and therefore to the Internet, is tied to priceapproximately $2,000 for a well-equipped Pc. This is still a lot of money to the average American household. Another price limitation is bandwidth; Internet service providers (ISPs) charge more for higher bandwidth because it enables faster Internet speeds. This was also the case 100 years ago, when the cost of a telephone and its monthly charges were prohibitive to the average American household with a $10 monthly income. And even if you owned a telephone, you could use it to communicate only as far as your local telephone companysupplied service. Remember, at the end of the 19th century, Ma Bell was not yet born. Anybody who could afford to run a copper wire from one pole to the next could be, and often was, a "telephone company." Like today's ISPs, they were single-point providers to the much larger network.
The biggest problem, as the cost of owning a telephone decreased and the number of households that owned one increased, was a lack of standardization. It took an act of Congress to merge these various telephone companies into a monopolistic whole, finally creating the ubiquitous "Telephone Company" for the next 70 or so years. But once the standard was set, telephones turned from a rarity to a commonality. Prior to 1910, only the most wealthy and successful business tycoons had access to telephone lines. Twenty years later, practically every desk in the corporate world had a telephone. Today, the concept of not having a telephone to do business borders on the ridiculous. One hundred years ago, using a telephone to do business was viewed as just as ridiculous. As the phone became more common in our private lives, it became more intertwined with business, whatever that business was. Eventually, the telephone network allowed us to inform, receive, and distribute goods and services more easily.
Although the telephone network doesn't define the business, sometimes the business can be defined by the network. The Internet, like the telephone, represents a network to distribute products and services, spawning hosts of new businesses to promote these productsand more importantly, the network itself. To be more precise, the actual product or service the Internet lends itself to is information, and the Internet is slowly but very surely revolutionizing the information business. So, rather than watching the revolution, how do you actively and profitability participate in this revolution?