Magazine Article | November 1, 2000

Betting IT Budgets On The Internet

Source: Field Technologies Magazine

Companies in the United States are spending big bucks on Web-based technologies. Their investments are justified, but is your company doing all it can to keep up?

Integrated Solutions, November 2000

I have a friend who teaches fourth grade. As you can imagine, she is always well armed with anecdotes. On the first day of school a few months back, one of her students was staring blankly at a portable record player sitting on a utility cart. After a long summer vacation, the student was clearly not in a raise-your-hand mode at this point. He simply blurted out what was running through his young mind. "What is that thing?"

Telling him it was a record player hardly answered his original question. He had never seen a record player or the black vinyl disks that many of us remember from our youth. In his mind, that technology did not exist. He was raised on CDs, and that is all he had ever known. Essentially, the ubiquity of this technology erased any memory of what it had replaced. And, that is exactly what the Internet will do.

Companies Splurge On Web-Based Technology
A few years back, the Internet may have been a curiosity in your IT staff meetings. Last year, the marketing that hyped e-commerce and B2C (business-to-consumer) transactions was omnipresent. In 2000, however, companies realized that the Internet could truly revolutionize how they conduct B2B (business-to-business) transactions with their partners. E-procurement and e-fulfillment may not be as glamorous as a glossy online storefront. But, these are the business processes that will be forever changed by the Internet. Internet technologies are allowing companies to streamline supply chains and save money that drops straight to the bottom line.

If your company is not investing in Web-based technology, well, you're in pretty exclusive company (and, not the good kind). Top industry watcher and analyst IDC (Framingham, MA) predicts that spending in the United States on Web-related IT products and services will more than double from $119.1 billion in 2000, to $285.5 billion in 2003. The percentage of IT dollars spent on this technology will also more than double in about that same time frame. IDC predicts that 27% of all IT budgets in the United States will be directed toward Web initiatives in 2003. By contrast, only 12% of IT spending in 1999 was earmarked for Web technology. In what could hardly be considered a shocking news flash, IDC concluded that "purchases of Web-related technology are now a business imperative." Tell that to your boss the next time he refuses to sharpen his pencil and crunch IT budget numbers. Remember those dollars saved up to this point from IT investments? Now it's time to reinvest for what could be an even bigger payoff in terms of efficiency and production.

Get Online Or Get Out
If you want an idea as to what should be included in your company's Web strategy, simply turn the pages of any issue of Integrated Solutions. Supply chain management – check. CRM (customer relationship management) – check. Data and information management – check. Enterprise mass storage – check. Wireless applications – check. E-commerce and e-business – check.

In response to going to a cyber cafe, Homer Simpson asked brusquely, "The Internet, is that thing still around?" Obviously, it is. Even if your company tries to ignore it, the Internet will not go away. Odds are, however, your company will.

Questions about this article? E-mail the author at