Dot.com take 2: Web 2.0 plus powerful broadband re-ignite e-commerce

But this time the story includes more players and will not end in a crash as it now has the infrastructure to support it, according to analysts.

Web 2.0 opportunities for ISPs and BSPs

While millions of organisations will become part of the new Internet economy and most will simply add this as a new strategy to their existing business models, a whole range of new companies are building dedicated Internet businesses or are emerging specifically to service this new industry, according to Wansink.

"There are especially good opportunities for ISPs, and some are now beginning to diversify their operations. Internet companies are also increasingly relying on the underlying Internet infrastructure for their success," she said.

"The majority of an ISP's Internet revenue is coming from business customers. This is forcing the bigger ISPs to look more closely at their customer's business needs. This clearly goes well beyond Internet access. At the same time, the more innovative ISPs are looking at a whole swag of new business products based on triple play models."

Wansink believes ISPs can increasingly innovate around Virtual Private Networks (VPNs), with IP-based Next Generation Networks (NGNs) that will look after all the companies' data communications requirements.

"VPNs have been in existence for about a decade, dominated by the products offered by the telecom carriers. Their major aim was then to protect the erosion of revenues from business customers as much as possible, with little interest in using them as an innovative way to provide maximum cost savings and benefits," she said.

"By using IP-based VPN services, this now changes. Different ISPs will concentrate on different markets. We already see certain providers concentrating on banking and transactions, others on data centres through Intranets, and online advertising."

Wansink said the other attraction was that VPNs can be linked to other VPNs and the Internet at large far more independently, thus bypassing the incumbent telco networks.

The other big opportunity for ISPs in this increasingly Web-savvy world revolves around datacentres, according to Wansink.

"Data centres are going to be the essential hubs of the modern Internet economy," she said.

"The e-economy can only work on NGN and fibre networks, and the telcos will need up to a decade to facilitate the process. This, in turn, will make room for others to participate and take the lead in an explosion of 'independent' data centres -- perhaps as many as two million of them around the world," she said.

The logic is that very few of the participants in the e-economy have any inclination to become technology buffs, so they will outsource to the technology facilitators in the market.

"The fact that those requirements will vary from SME to SME, means that a highly personalised service will be required by millions of companies. Currently some of the ISPs, IT companies and telcos are becoming involved in this, but at the moment we are only seeing the tip of the iceberg. Less than 10 per cent of SMEs are utilising the e-economy to its full advantage and over the next decade this will increase dramatically."

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Dahna McConnachie

Good Gear Guide

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