March 26, 1996

The Internet, When the Dust Settles

Will online technology lead to anarchy, utopia, or something in-between?

At this stage in the Internet's evolution as a form of communication and commerce, we're merely throwing spaghetti against the wall to see what'll stick. Bob Gill, an Internet analyst with the market-research firm Gartner Group, is in the business of predicting just who ends up sticking around--and who ends up on the floor.

It's not as rosy a picture as some may think. As the transport mechanism provided by America Online, CompuServe, Microsoft, Prodigy, and other Internet service providers is driven down to commodity pricing, content owners will likely have the real power on the Internet and, by 1999, will relegate ISPs to common carrier status. Gill predicts that 80 percent of the thousand or so ISPs in business today will probably be out of business shortly, outmuscled by AT&T and other companies with the resources to offer customers the best deals.

More bad news for ISPs comes from the technology itself. Users, faced with the difficulty of finding their way on the Internet, require highly sophisticated search technologies. Power users may search out new technologies on their own, but more casual users will turn to brands they recognize. Consequently, the thousands of "content wannabes," as Gill calls them, will become overshadowed by the big media companies that have brand recognition. "The leading entertainment aggregators will likely leverage their brand recognition into powerful positions on the Internet," explains Gill. The small content developers won't disappear completely, but will sell their products to big companies such as the BBC, Bertelsmann, CNN, and Time Warner.

Scenarios A, B, and C
Gill has constructed three possible scenarios for the Internet's evolution and has assigned each one a probability score. In Scenario A, which has only a 0.1 probability of coming to fruition, the Internet leads to utopian benefits. Bandwidth is plentiful and applications free and instant. International regulations are relaxed and Internet literacy becomes the norm as today's youth enters the work force.

In the downright chilling but far more likely Scenario B, which Gill surmises has a 0.3 probability of occurring, Internet anarchy causes a forceful backlash. Internet security is continually breached, users close their network borders, and the Internet becomes a no- man's-land in which information attack becomes sport. The overwhelming number of applets and plug-ins operating over the unsecured network makes the Internet dysfunctional. Electronic borders are closed, because freedom of information transfer causes intellectual wealth to drain away from developed nations. The backlash drives the industry back 20 years to centralized, monolithic computing models.

In the most likely scenario C, which has a 0.6 probability of playing out, life goes on. Cycles of explosive growth are followed by corrections. Bandwidth eventually becomes affordable in most countries, but the gateways between corporate intranets and the global Internet are heavily guarded and controlled, with caution outweighing opportunity.

Gill predicts that "the Internet will result in neither utopia nor disaster. Rather, the Internet and its technology will be used increasingly for both intranets and interenterprise communications linking employees, customers, suppliers, and business partners."-- Carol Levin

Index to previous Trends Online articles.

Copyright (c) 1996 Ziff-Davis Publishing Company