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Craig Reardon takes a look at internet applications that are changing the way we do business and the emerging advantages for SMEs.

Now that the dust has settled on the dot-com crash of 2000, business operators can get a realistic idea of which internet tools and technologies offer tangible benefits for their business.

Since the turn of the century, the internet has become indispensable. Despite early talk of it being a fad, spending from US consumers using the worldwide web in the last 12 months was reported to be $US300 billion.

Throw in the amazing savings businesses are experiencing on everything from postage to sales cycle reduction times, and the reality is that we are part of a truly revolutionary development that has enjoyed a consumer adoption like no other medium before it.

Once it became clear search engines could provide an effective alternative means of finding a supplier, the main advertising medium of most small business, the printed version of Yellow Pages, had to adopt new technology to include an online version.

Service businesses, the traditional mainstay of the printed directory, are also enjoying the additional business and features that the online version of the book is providing. And just as you can pay for a box ad in the printed version, you can pay extra to get more prominence for your product online.

Content management companies emerged in the early days to take care of the maintenance and upgrades of client websites, and this often cost clients more than the initial set-up. Businesses are now the winners as developers cut costs and add features in an effort to gain or retain business.

Now capitalised at $US46 billion (realised by a staggering 450,000 percent annual growth rate), the success of the Google search engine has demonstrated not all dot-com start-ups were turkeys.

SME Benefits

The last few years have seen the emergence of businesses that are powered by the internet rather than created by it. Entrepreneurs found that you didn’t have to create a ‘new to the world’ business to succeed online, rather old fashioned businesses could simply be remodelled using the internet. Some, like Amazon.com , use the internet to channel their market, while others save money on traditional systems like printed catalogues by providing them online, like pyjama king Peter Alexander.

If anything, the last few years have cemented some of the early dot-com rhetoric as technology adoption rates continue to climb and internet companies report astonishing profits. Given these growing numbers, internet solutions that were once the domain of large organisations are now well within reach of small business. The features included in one ‘out of the box’ website solution stocked by a reseller such as The Plant, for example, would cost in excess of $20,000 if built from the ground up by a web developer. However, economies of scale and new pricing models mean the solution can be provided for less than $500 per year.

Thanks to search engine marketing, small businesses can now be assured their web searches are yielding better results than ever before, as well as directing more traffic to their business.

The benefits of search marketing for small businesses are open to the highest bidder, which helps users and advertisers cut through the clutter of search results. Businesses can set their own price for ‘pay per click’ search marketing, which also determines the prominence of the ad. Businesses can also set a daily budget, after which the ads switch off for that day.

Clever advertisers can easily find themselves at the top of the pile through the prudent use of relevant search terms and the right bid ‘per click’, allowing them to compete alongside bigger, wealthier competitors.

Websites have become mandatory in business-to-business space as the proportion of businesses using the internet to find a supplier grows.

There is now more pressure on suppliers to have an online presence. But not just any website will do. It has to be search-engine friendly and professional. If two identical businesses were on offer, the trend is for the one with the most professional-looking and functioning website to be more likely to get the business. A website also needs to be built in a way that it can be found by the major search engines and returned to users and potential customers. Too much ‘flash’ animation technology on websites won’t necessarily bring positive results for the client.

While websites have become cheaper and easier to manage, selecting the right provider has become more difficult as business operators are faced with so much choice in providers, technologies and pricing plans and models.

It was often not possible to ascertain the suitability of a solution until it was used on a day-to-day basis, which was often too late given minimum contract terms and switching costs. This led to the emergence of the independent provider, essentially resellers, who bundle a selection of technologies to meet the budget and requirements of the customer, providing a lower-priced and almost custom-built solution with ongoing implementation and management assistance.

Emerging Trends

At this stage, the number of independent providers is low, but more are expected to emerge during 2005. It was predicted in the early 2000s that broadband technology was going to revolutionise the internet, and now it seems the forecasts were on the money.

And as broadband providers realise their initial offerings were too costly for the average small business, lower prices have paved the way to a healthy uptake of the technology.

Interestingly, the benefits are most felt at small office level, where operators enjoy 24-7 access, a single phone line and savings on dial-up connection costs. Given recent developments, one thing is certain: it will become more and more affordable for a business to adopt online tools and technologies. As more online users and consumers embrace the internet, businesses not getting on board risk being left behind, not only in the current business-to-business space.

It will also become the norm for those appealing to consumers in the ‘information on demand’ environment of IT and home entertainment.

Australian small businesses are in the unprecedented situation of having to decide whether or not to embrace the internet and a new range of exciting opportunities that were simply not possible a few years ago.

Dot-com winners

• Traditional products embracing new channels to market, such as Peter Alexander, Roses Only

• Traditional products embracing new distribution channels

• New businesses challenging traditional market leaders, such as Seek.com.au

• Internet-only business, such as Google, eBay

Winning applications

• Email

• Online booking/ticketing

• Broadband

• Content management systems

• Application Service Provider (ASP) models

• Niche portals

• Subscription revenue models

• ‘Pay per click’ advertising

• Wireless networks

On the way

• Voice over IP telephony

• Home infotainment networks

• Video on demand

• Comparison shopping websites

• Consumer tenders (vendors reverse bid for product/services)

*Craig Reardon is an independent e-business educator and director of The Plant. www.theplant.com.au

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