The notion that e-business got dumped along with tech stocks clearly misses the reality of how much business has been transformed electronically. Even though IT budgets have been stripped, many information technologies are now fundamental to business practice. In fact, many Internet-based technologies survived and even thrived in the down-turn.
The reason is simple. These technologies transform costly, clumsy, painful business processes into processes that are faster and cheaper. Even though, there is an up-front cost, the bottom-line is impacted enough over time that these technologies and the efficiencies they provide are now often operationally essential in order to firms to remain competitive in an even more competitive environment. They not only impact the bottom-line in the short-term but they also may win customers in the long-term.
Two major forces are reshaping e-business. The first is bundling, where once separately sold applications are now sold together. The second is outsourcing in which software previously sold as a product are now sold as a service. In essence, e-business got harder for the technology competitors selling the wares because of increased competition for lower budgets and it also got smarter for the companies employing the technologies. The competition fueled more reasonable prices, better service and better products. However, it may still be difficult, given a limited budget, to assess what your company might need and what efficiencies can be achieved within specific cost constraints. In order to evaluate this, Table 1 compares various e-business components that medium-to-large sized enterprises are using to compete.
Certainly efficiencies in the supply-chain and the sell-chain enable firms to remain competitive during lean times. The current technologies are all about getting the right information to the right people. A good portion of this is increasingly being achieved via web-services. These services are fueled by the reality that full integration is still a long way off so it is still not possible for servers at different companies to really share and exchange information spontaneously without considerable effort.
Web services are arising as the key technology for enabling this interaction, if only superficially sometimes. It is still impossible to connect your bank, airline, rental care and frequent flier program seamlessly. However, the web-service technologies are certainly moving in that direction. The interesting thing about achieving these efficiencies through web-services is that there is nothing ‘flashy’ about the technology. The tools that make this possible are not at all glamorous, but boring nuts-and-bolts technologies. Maybe this means that while the honeymoon is over with e-business solutions and they may not be as ‘sexy’ as once considered, more importantly they are stable and integral to our daily business lives.
Table 1. Basic eBusiness Tools and Costs
Price Range (US $)
|Data Storage and Management|
|.03 – .15 per megabyte (for a large 4 tera-byte ebusiness application the range is in the 1.5 million area)|
|11,000 – 40,000 per CPU|
|13,000-23,000 per month|
|10,000-55,000 depending on processing, dataports, software, memory|
|4,500 (for eight 100 megabit ports)-30,000 (more for gigabit Ethernet ports and advanced functionality)|
|4,000-20,000 (pay more for the number of ports)|
|Free – should be included free of charge with an application server|
|8,000 – 35,000 per CPU|
|100 – 200 per seat (the more applications you want to integrate the higher the price)|
|300,000 – 500,000|
|250,000 (applies to licensing only – integration costs up to 5 times the cost of the software)|
|1 million – 5 million (for midrange retailer)|
|5,000 per user (list price)|
|500,000 (without customization or integration)|
|190,000 (for a midsized company purchasing 70 seats with mixed read-only and full-access)|
|20 per user (enterprise wide deployments can cost considerably more)|
|11,000 – 18,000 (costs range from $10 per user to $200 per user depending on the complexity and scalability required)|
|100,000 and up (depending on the complexity of the system)|