1997-08-08 - E-Commerce Report

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From: John Young <jya@pipeline.com>
To: cypherpunks@toad.com
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UTC Datetime: 1997-08-08 09:43:57 UTC
Raw Date: Fri, 8 Aug 1997 17:43:57 +0800

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From: John Young <jya@pipeline.com>
Date: Fri, 8 Aug 1997 17:43:57 +0800
To: cypherpunks@toad.com
Subject: E-Commerce Report
Message-ID: <1.5.4.32.19970808020729.00746f28@pop.pipeline.com>
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7 August 1997, Business Wire:

Businesses will spend $31 billion on Electronic Commerce-related 
software,  hardware, products and services by the  year 2001, 
according to Bill Burnham, senior research analyst at Piper 
Jaffray Inc.

That's one of the conclusions Burnham draws in "The Electronic 
Commerce  Report" released today. The first comprehensive study 
of the rapidly emerging Electronic Commerce industry, Burnham's 
report  outlines how this spending threatens to topple many of 
the existing  structures underpinning the economy.

The 250-page document provides an in-depth examination of five 
separate areas of the Electronic Commerce industry: 

  Internet  Security, 
  Electronic Payments,  
  Financial Software, 
  Business Commerce Software and 
  Commerce Content  (Internet-based retailing).  

The  report includes projections for revenue growth, size of the 
electronic bill payment industry, number of electronic bill 
presentments and the number of commerce-oriented Internet sites.

Some of the report's most significant findings include:

-- Implementation of the Secure Electronic Transaction (SET) 
standard for  Internet credit card transactions may be delayed 
due to  compatibility and  processing problems;

-- Increasing concentration in the electronic payment sector 
will lead to the "death" of the current payment system. The 
Internet increasingly will be used in lieu of payment networks  
currently run by organizations such as Visa, Mastercard and the  
Federal Reserve;

-- An estimated $228 billion in goods and services will be  
bought and paid for over the Internet in 2001. The  consumer-to-
business market will account for $26 billion in  purchases while 
the business-to-business market will account for $202 billion in 
purchases - eight times larger than the consumer  market;

-- The Electronic Data Interchange (EDI) industry faces an 
increasing challenge from a new Internet-based technology called  
Direct Data Internet (DDI). DDI eventually will battle with the 
EDI industry for control of the business-to-business market on the  
Internet;

-- Intelligent Agents -- software programs that automatically  
shop on behalf of consumers -- will eliminate the advantage enjoyed  
by firms with well known consumer brands;

-- Banks and technology firms such as Microsoft and Intuit are  
heading towards a confrontation over the creation of so-called  
"Integrator" sites on the  Internet. These sites are destined to  
become a consumers' gateway to the  Electronic Commerce industry;

-- The Internet security industry will grow from $525 million to  
$2.7 billion in the next five years. However, this industry will  
face constant threats from large technology firms such as Microsoft  
and Cisco Systems, who could  destroy the industry by embedding  
security features into their products.

"Too many people have confined the concept of Electronic Commerce 
to selling trinkets over the Internet," Burnham said.  "But 
Electronic Commerce goes much deeper than that. Over the next few  
years we will witness a series of battles between firms that hang on  
to the traditional ways of doing business and those that embrace and  
capitalize on the rise of Electronic Commerce."

Copies of a six-page summary or the entire 250-page report are 
available upon request. For more information, contact Piper Jaffray  
at (612) 342-5540.

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