Does the millennium bug loom as Net threat?

About 16 per cent of US households have computers connected to the Net. Europe’s two biggest computer markets, Germany and Britain, have eight per cent and five per cent of their homes wired for cyberspace.

“By year-end 2000, 64,000 companies in Europe and 173,000 in the US will conduct Internet-based, fully integrated business-to-business electronic commerce,” a recent report by London researcher Datamonitor said.

Information technology companies are in the advanced guard. “High-tech companies are leadingthe way, like Hewlett-Packard and Cisco System. That breeds off itself. The banking sector is also stoking things up,” Bill Hutchison, partner with KPMG Management Consulting said.

High-tech companies are slashing costs by buying and selling the basic building blocks of their businesses like semiconductors, chips and computer hardware across the Internet, or internal, secure networks called intranets.

“We area looking at a hockey-stick shaped growth,” Hutchison said. Many experts say that this computer-to-computer marketplace is not just a better way to do business, but a revolution in the making.

According to US high technology consultancy Gartner Group, the much-talked about millennium bomb is no marginal, obscure possibility. Upto half of the world’s corporations face a blast from the millennium bomb.

Companies which have scrupulously engineered their own computers for 2000, may be wounded by incompetent business partners.

“Electronic commerce operators need to be just as concerned oftransactions exchanged with external partners as with their own internal systems. By the end of 1999, not even 50 per cent of business partners will be year 2000 compliant,” Gartner said in a recent report.

Millennium bug paranoia is making companies in Europe reluctant to embrace electronic commerce. “The millennium bug is a significant delaying factor in Europe,” said KPMG’s Hutchison.

Spending on millennium bug fixes, and preparing for the European economic and monetary union, which is due to start on January 1, 1999, are also inhibitors.

“The millennium, everyone’s got that problem, and the Euro too; spending on 2000 and the Euro must apper as competitors for budget,” Hutchison said.

Despite possible drawbacks, by 2002 electronic commerce will be part of the major business strategy of 90 per cent of the world’s big companies and 35 per cent of midsize enterprises, according to Gartner.

Gartner also points out that doing business over the Internet is not just an extension of regularcommerce. Money has to be invested in specialise marketing, promoting and positioning.

Gartner also provided a handy definition of electronic commerce. “If you can get an electric shock from it, it is electronic commerce,” Gartner said.

Companies that hesitate now will be left at the starting gate. “Losers? Those guys that say `we’re gonna wait”. They are viewing it as a technology that they can screw in. The big losers will be those sitting around scratching their heads for too long because they’re afraid to mess with their existing channel, or they figure they will wait until the technology churn slows down and they can leapfrog with one big purchase,” said Glover Ferguson, Andersen Consulting’s e-commerce expert.

But it may be that procrastinators have the last laugh. They will not see their businesses disappear into a virtual black hole at midnight, December 31, 1999.