Electronic commerce is expected to reach critical mass over the next three years, opening up a global market for exploitation, a report has forecast.
The annual PricewaterhouseCoopers Technology Forecast, published today, predicts improved security, Internet access and easy-to-use electronic commerce applications will quickly prompt all businesses to adopt Internet trading strategies. However, it warns that open standards for automated transactions need to be agreed before universal adoption can take place.
It is likely the bulk of revenue will be generated from business-to-business exchanges, even though the greater volume of transactions will take place between businesses and the consumer. The report warns that electronic commerce will not work unless it offers buyers an additional advantage over traditional purchasing methods.
According to the report, the products most likely to benefit from electronic trading include maintenance, repair and operations materials which fit into industry supply chains. In many cases these are already ordered, purchased and tracked electronically through custom-built systems. Conducting these processes over the Internet will lead to significant cost savings.
Because of the Internet's relative infancy, the existing and emerging technologies which drive it are prone to short life cycles. The report classifies a Web year as less than three months, and predicts the continued launch of Web products and services on a daily basis for the next three years at least.
However, the current hype surrounding multimedia - incorporating voice, video and data applications on PCs - is not expected to pose a significant challenge to television as an entertainment medium for several years. Instead the report concludes it will be best deployed for corporate use in video-conferencing and the distribution of pre-recorded events and presentations.
The use of the Internet to carry voice telephony will be confined largely to domestic consumers, the bulk of whom will continue using relatively slow analogue dial-up modems that will not provide adequate bandwidth to derive the full value from available services.
The demand for increased bandwidth will continue, though the deployment of fibre optic cable to every home has been abandoned as economically unfeasible. Instead, the most successful emerging technologies are finding ways of "squeezing more traffic through the existing access lanes".
The global deregulation of the telecommunications industry will see 80 per cent of world telecommunications markets scheduled for liberalisation by next January.
Computer companies will continue to apply pressure on telecoms operators to provide increased end-user bandwidth at lower costs in order to deliver their products and services.
According to the report, home users stand to gain most from these developments as there will be a greater choice of telecommunications service providers. The report predicts incumbent local telecoms carriers will continue to control the installed "local loop" base, while the challenge will lie with newer entrants to exploit emerging technologies to provide residential services. However, the benefits of new entrants will only be felt outside urban business centres once broadband satellite systems come into service after 2002.
