World Telecommunication Day 1999 |
For the biggest of the big in the telecommunications service provider and computer platform sectors, the approach to electronic commerce support for large business concerns can be adequately summed up with a universal motto: ''We'll take you there.''
E-commerce supporters of this scale are attempting to round out their capabilities so they can provide all the components required for their business customers to launch e-commerce strategies. They strive to provide not only the physical network connectivity, but also the data centers required for Web hosting, the layers of security demanded by e-commerce, the transactional and payment processing capabilities, the product ordering and distribution functions, and the customer service support.
Frontier Corp., for example, offers comprehensive e-commerce packages through its GlobalCenter division. The company already offers support across the United States for large-scale e-commerce capabilities through its own network and is in the process of expanding its reach by merging with Global Crossing Ltd., an international fiber network operator. Toys 'R' Us Inc. and PC Flowers & Gifts Inc. are examples of on-line retailers that have recently tapped Frontier GlobalCenter to be their e-commerce host.
GTE Internetworking is the division of GTE Corp. that focuses on supporting business-to-business e-commerce efforts. Like Frontier, the carrier offers a comprehensive support suite, including network connectivity, site design and marketing support. GTE Internetworking also offers to shoulder the payment processing and shipping functions of its business e-commerce customers.
Likewise, large telecommunications entities like AT&T Corp. and MCI WorldCom Inc. (which is acquiring Sprint) have divisions that support national and international e-commerce functions, as do many of the incumbent local network operators.
The increased focus on e-commerce is increasingly evident among traditional telecommunications players.
France Telecom, for example, announced earlier this year that it would deploy America Online Inc.'s Netscape platforms in its network, which will allow the carrier to support international electronic commerce efforts in Europe.
The logic of alliances
In addition, some large computing and consulting entities like IBM Corp. and Electronic Data Systems Corp. also support e-commerce functions, but their efforts require alliances with network operators, since they themselves lack the physical networking functionality required of global e-commerce.
Whether they are providing support for retail efforts - such as virtual toy stores, auction sites or stock-trading houses - or tapping into business-to-business operations, these telecommunications companies are well aware that taking the network burden off the e-commerce hopefuls ultimately means taking a piece of the action for themselves.
Since the biggest of the big among service providers already have expansive networks in place, they can leverage those assets as e-commerce efforts become even more universal.
''There's a lot of opportunity for these guys to capitalize on their assets,'' says Chris Tatem, chief e-commerce officer for American Management Systems Inc., a software company.
AMS recently published a report, ''eCommerce in the Telecommunications Industry: Trends and Innovations,'' documenting e-commerce opportunities in the telecommunications industry. ''The asset they have is what they're selling: connectivity.''
The report also focuses on service providers' own efforts to sell their services to businesses and consumers over the Web.
Ironically, the study finds that while most large telecommunications entities are adept at supporting the e-commerce initiatives of other lines of businesses, they are not collectively focused on using the Internet as a major business channel for themselves.
In addition, while most large telecommunications concerns are rich in network assets, not all of them are as well equipped as they could be in the area of network enhancements that support Internet-centric operations, according to Mr. Tatem.
''Most of them are not yet selling the commerce solutions that need to run on top of the network,'' he says. ''Some of the telcos don't have the software capabilities they require.''
The large telecommunications service providers face formidable competition from players outside their traditional market boundaries - especially Internet service providers that have been raised in the Internet culture.
These new competitors are not sitting still. PSINet Inc., for example, recently expanded its e-commerce capabilities by acquiring Transaction Network Services Inc., a business focused on managing transactional and financial functions. Two of the largest U.S. independent Internet access providers, EarthLink Network Inc. and MindSpring Enterprises Inc., have announced a merger that would make the resulting company second only to America Online Inc. in the United States.
''Their asset is their home environment on the Web,'' says Mr. Tatem. ''It's easier for an ISP to do it than a traditional carrier. Harnessing the power of the Web requires an understanding of business and technology.''
Jason Meyers