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Who’s Asleep at the e-Wheel

Posted: 04/2000

The Letter

Who’s Asleep at the e-Wheel

The thought of reading or writing another word about e-commerce makes me want to puke. But alas, anyone in this industry–heck, anyone who watched this year’s Super Bowl commercials–knows that e-commerce is the future. The Gartner Group Inc.
(www.gartner.com) predicts business-to-business
e-commerce revenues alone will climb to $7.29 trillion by 2004.

So what’s all the fuss about February’s announcement by SBC Communica-tions Inc.
(www.sbc.com) that it will acquire e-business integrator Sterling
Com-merce Inc. (www.sterlingcommerce.com)?

According to some industry analysts, SBC’s $4 billion acquisition of an e-commerce company is “the boldest move in this space by a telco to date.” Moreover, they say this acquisition will force all
competitors–from ISPs to IXCs–playing in the e-commerce space to evaluate their situation and use partnerships, acquisitions, joint ventures and other strategies to strengthen their positions as either acquisition targets or greenfield players.

Excuse me, but doesn’t it seem awfully shortsighted of SBC’s nimbler competitors not to already be positioning themselves in the e-commerce space? It seems almost incredulous to suggest the entrance of a stodgy Bell company is what may trigger competitors to move into an area that they–and the rest of the free world–clearly know they must be in. Since when do innovators take their cues from incumbents?

In fact, they don’t.

And while the fact that an RBOC finally has become serious about e-commerce may signal a new level of competition in this space (e.g., that it is a must-have strategy), SBC’s buy is merely a me-too move.

For example, MCI World-Com Inc.
(www.wcom.com) just announced in January a major partnership with e-commerce services provider AppNet Systems. Also in January, NEXTLINK
Com-munications Inc. (www.nextlink.com) announced its intent to acquire e-commerce provider Concentric. These are only the most recent pairings. Qwest Communications International Inc.
(www.qwest.com) announced its acquisition of European Internet and e-commerce provider EUnet way back in March 1998. And, Frontier Corp. (now Global Crossing Ltd.,
www.globalcrossing.com) acquired Global Center more than two years ago–in January 1998. And, there have been many more such combinations in between.

While some analysts may charge that competitive carriers are falling asleep at the e-wheel, it may be they who are not paying attention to who and what is driving the market.

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Khali Henderson
Editor-in-Chief


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