Silicon Valley Watcher - Former FT journalist Tom Foremski reporting from the intersection of technology and media

Prediction: Dotcoms will eat lunch this time around -- the Reversal of the Internet Business Timeline. Part I

Posted by Tom Foremski - December 9, 2004

by Tom Foremski for SiliconValleyWatcher.com

Around about middle of 2003 something interesting happened. I can't quite put my finger on what exactly it was, or what caused it, but the internet business timeline started reversing.

Maybe it was talk about the Salesforce.com IPO that signaled the reversal. Anyway, it started to be increasingly clear we were going to re-run the last seven to nine years in reverse with a few twists.

I've dubbed what's coming as the Greenfield Enterprise Economy. The following will happen:

--Dotcoms will slowly start coming back into vogue, eat the lunch of the established companies, and go on to eat the companies themselves while spitting out the crunchy infrastructure legacy costs and sucking out the fatty stuff-- the IP and brands.

Some of the new Dotcoms will be web services vendors, currently acting in the traditional enterprise software model of "arms dealers," selling their technology to others. And some of these web services companies, while selling their technology to others, will begin using it themselves in new markets and in regional applications. Sometimes this will occur in partnership with other web services companies. For example, suppliers of say, e-commerce ASP services, will establish a regional shopping mall.

The logic will be clear: why spend millions marketing technology, trying to convince potential customers of the gain of large operational efficiencies when instead they can invest that money into establishing new ventures that take full advantage of the technology.

Such ventures would not necessarily compete with potential customers because they will be focused on specific regions or used to develop new types of services. The focus of most of the new Dotcoms will be on cracking the regional business market - currently the single largest commercial online opportunity.

With this strategy, sales to customers will be boosted because those ventures will serve as technology showcases, demonstrating how to combine technologies and business models to recreate profitable ventures in other regions or niches.

Also, those ventures can be flipped -- sold to customers. This generates new capital and sales at the same time.

The best business opportunities will come from the emergence of Greenfield Enterprises -- these will become the true new Dotcoms of the new economy (yes, the term new economy will return).

The Greenfield Enterprises will be absent most of the legacy costs of competitors. The correct application of technology combined with business model innovation will mark the successful Greenfield Enterprise.

The Greenfield Enterprise Economy Dotcoms will then eat lunch. I will explain how in Part II of the Reversal of the Internet Timeline...

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