Subject: December 2001 Year-end 2001 in Review brought to you by
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December 1, 2001 *4,300 subscribers* Volume 3, Issue 12 Online:
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2001 E-Commerce Wrap-up
Management Perspective
by Mitchell Levy, Author,

One thing is clear about 2001: it was a wild ride. I remember thinking that 2000 was a tumultuous year, but then came 2001. Business spending slowed to a trickle in Q1 and consumer spending froze on September 11. We had the Napster and Microsoft cases and the extension of the Internet tax moratorium.

Evaluating's 11 predictions for 2001 (, we see that 9 were correct.

1. The more things change, the more they stayed the same
2. More consolidation of brick-and-mortar and brick-and-click models
3. Better, faster and maybe cheaper products
4. Increased changes in business models and value webs
5. New standards and rules creating new opportunities
6. Evolving infrastructure and tools
7. A new face of marketing
8. New dimension for growth and evolution
9. Peer-to-Peer commerce took off

Two were only partially correct:

1. A new Internet-enabled world
2. Customers rule

Late 2001 witnessed the bottoming out of the B2C market, a leveling of B2B investment, and consumer confidence in the Internet reaching all-time high levels. In the next year, IT investment is expected to remain steady or grow in 80% of Global 2000 firms. U.S. consumers are set to spend over $10 billion this holiday season, 20% of the $50 billion annualized spending for 2001. The Internet leads with partial optimism.

Consolidation of products and services was as much a result of accelerated maturation as it was related to economic and financially driven events. Marketplace software faded as practical B2B investment focused on process integration, especially CRM and supply chain management. Alliances in 2001 were strategic, not financial.

Strategy, process, and technology, in that order, are finally being adopted in complex sales and implementations of CRM, SCM and extended enterprise applications. It's the only way that B2B can make sense and evolve in a networked deployment.

Wireless technology continues to grow, with mixed applications in business. Mobile data still drive development more than mobile devices do, and wireless enterprise data remains a continued investment focus in 2002. Palm and Handspring may merge this year, but wireless integration with the enterprise remains below projected levels.

Data centers are in peril, with Exodus in bankruptcy, and revenues way below costs in others. Combined with the ASP model, firms including Exodus, Above Net, Level 3, and Qwest had hoped to create cross-connected infrastructure as peering points for business process. Instead, B2B process integration fell into large middleware and integration firms. Even Extricity, a crown jewel in this field, could not avoid acquisition, as anticipated revenues could not cover cash flow requirements after rapid growth.

Grid computing and web services are gaining momentum in the popular press, and with the Object Management Group pushing UML-XML convergence, distributed process is becoming more of a possibility. Forrester's "exT" external technology approach to distributed business process models appears to be materializing.

"E-business" applications have now reached 10% of all IT spending, with CRM and SCM remaining the biggest investments. As the "e" melts away in the future, successful firms (especially IBM Global Services) will no longer differentiate between process- driven and commerce-driven applications. Say goodbye to "e".

The pending merger between HP and Compaq, whether or not it happens, is more than just synergy and expansion of core activities into new growth markets. It's reflective of the growing realization that combining technology and services with strategy and process is not merely the ideal approach, it's the only approach.

Electronic Bill Presentment and Payment (EBPP) remains an elusive goal, as major banks are not participating in the full length of the value chain. Their reticence is partly due to cash management issues, and partly due to the fact that the "all or nothing" threshold is still far above a level that would allow adoption. However, contingencies with the postal system may drive EBPP in 2002.

As geopolitical boundaries and alliances are rapidly morphing and seeking new definition each moment, global commerce continues its inevitable march forwards. We can only hope that our New World embraces the vision of new strategy for good.

The first year of the 21st century witnessed the introduction of the Value Equation, a new tool for strategically designing best-fit business models in the complicated world of digitally commerce. Stay tuned as we share the vision and value of our new tool. Be prepared for a change to this e-zine as we reposition it for 2002.

Finally, happy holidays to you and your family!

Mitchell Levy
Executive Producer,

About the Author:

Mitchell Levy, is President and CEO of (, an e-commerce management consulting company helping small, medium and large enterprises transition employees, partners and customers to the Internet age through strategy, marketing, and off-the-shelf and customized on-line and on-ground training. The latest info on the value equation can be obtained at He is the author of (, Executive Producer of (, an on-line E-Commerce Management (ECM) e-zine, Chair of at Comdex Fall, the Founder and Program Consultant of the premier San Jose State E-Commerce Management Certificate Program ( and the Chairman of the Pay-per-Performance PR Agency Media Attention Now TM ( and the on-line learning content production company Transition Learning ( Mitchell was at Sun Microsystems for 9 years, the last 4 of which he managed the e-commerce component of Sun's $3.5 billion supply chain. Mitchell is a popular speaker, lecturing on ECM issues throughout the U.S. and around the world.

Read more about Mr. Levy:


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