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NUA INTERNET SURVEYS NUA INTERNET SURVEYS NUA INTERNET SURVEYS
Weekly free email on what's new in surveys on the Internet
By Nua Email: surveys@nua.ie Web: http://www.nua.ie/surveys/
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November 9th 1998 Published By: Nua Limited Volume 3 No. 38
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EDITORIAL
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LINUX AND GOLIATH
Welcome to another weekly edition of Nua Internet Surveys. This newsletter
provides information on surveys and reports on the Internet, and is brought
to you by Nua - one of Europe's leading Internet consultancies and developers.
Linux is a Unix-based operating system (OS) which many industry analysts
believe has the potential to make a strong dent in Microsoft's 90 percent
share of the OS market. Linux users are reportedly growing by 40 percent
every year and the Linux homepage gets 100,000 page views *every day* from
people looking for information on the free operating system.
Does an OS built on open-source software such as Linux pose a threat to
companies like Microsoft?
Forrester Research analyst Carl Howe reckons that big companies are too
scared to use Linux. He believes this is because it doesn't support many
applications, because it's difficult to purchase and because there aren't
enough big names behind it.
I don't agree - and neither do the people at Microsoft who penned the
following thoughts in the "halloween" memo which was leaked onto the
Internet last week.
"The ability of the OSS process to collect and harness the collective IQ of
thousands of individuals across the Internet is simply amazing. More
importantly, OSS evangelization scales with the size of the Internet much
faster than our own evangelization efforts appear to scale.
"Additionally, the intrinsic parallelism and free idea exchange in
OSS has benefits that are not replicable with our current licensing model and
therefore present a long-term developer mindshare threat."
The fact that Sun Microsystems is shipping its new Java Development Kit, JDK
1.2, in a Linux version - even though it is a potential threat to Sun's
own Solaris system - is testament to the growing popularity of Linux as a
multi-platform operating system. Intel and Netscape among other venture
capital firms have recently invested in Red Hat Software, a major Linux
distributor.
Proponents argue that Linux is an inherently stronger operating system,
with far greater survival prospects than a closed-source software OS such
as Windows. Software code written in an open community where the brain
power of many individuals is harnessed is likely to be more resilient than
software developed in the confines of one brain, no matter how genius.
Much of the success of Linux has been attributed to the leadership skills or,
more appropriately, the evangelizing skills of its founding father Linus
Torvalds. Linus, who developed Linux eight years ago in Helsinki, has
positioned himself as "gatekeeper" of Linux, benevolently controlling all
modifications while breathing energy into the community that builds it.
In his excellent paper, "The Cathedral and the Bazaar", Eric Raymond,
obviously inspired by Linus, makes the following observation: "the cutting
edge
of open-source software will belong to people who start from individual vision
and brilliance, then amplify it through the effective construction of
voluntary communities of interest".
The "ego-less programming" culture of the Linux community, (evident in any
well orchestrated open-source software project), where thousands work
simultaneously on bug fixes and continual upgrading, has resulted in a
robust OS capable of true multitasking, virtual memory, shared libraries,
demand loading, proper memory management and TCP/IP networking.
There are precious few developer houses that can access, never mind afford or
have the requisite genius to motivate, a commensurable calibre of talent as
that which belongs to the Linux community.
Linux's only drawback is in its usability, or rather its lack of it. Based on
UNIX, it remains, for the moment, resolutely in geek territory. It's mainly
used for launching software programs, tracking, building networks and creating
databases. It's not very pretty and it takes a fair amount of technical
prowess to operate. At the same time, it's not rocket science, it's not
Microsoft, and it's free.
For mainstream adoption of Linux all that is needed is a little sympathy on
the part of the developers for technophobes like me.
Is mise le meas,
Sorcha Ni hEilidhe.
sorcha@nua.ie
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Nua Internet Surveys is a fully searchable database of information
gathered over the last two years. The resource has been cited as the
number one source for tracking emerging trends online and for
providing statistical analysis of the Web.
If you are looking for a particular study or report, visit our search
page and find the relevant data.
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SURVEYS THIS WEEK:
INTERNATIONAL : Germany Goes on Internet Strike
: Vietnam To Cut Net Access Rates
ISP INDUSTRY : UK ISP Subscriptions Rising
: India Finally Issues ISP Licenses
: Saudi Arabia Issues First ISP Licenses
ECOMMERCE : Holiday Gift Market Remains Untapped
: German Businesses Appraise Ecommerce
: Ecommerce in Europe Set to Rocket
: Majority of SMEs to Build Ecommerce Sites
: Emarketers Respond to Analysts
: Online Trading Settles Down
ADS/MARKETING : Ad Revenue to Hit USD2 Billion in 1998
: Banner Ads Drop in Price
COMPUTER INDUSTRY : PC Sales in the US Will Slump in 2000
MISCELLANEOUS : Online Porn Industry Facing Crisis
: A Flexible Work Place Means Higher Profits
: 44 Percent of College Courses Use Email
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INTERNATIONAL
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Las Vegas Sun: Germany Goes on Internet Strike
Over 6,000 German Internet sites went off-line yesterday to
demonstrate against the cost of Internet access in the country.
Germany's 7.5 million Internet users were also asked to stay
off the Web.
The strike's organisers are demanding that Deutsche Telekom reduce
the cost of connecting to the Internet from the current rate of USD
3.13 dollars per hour to USD 63 cents.
Germany has followed Italy's lead in using the Internet to protest
over telecom rates, a similar protest was organised against Telecom
Italia last week.
<http://www.lasvegassun.com/sunbin/stories/tech/1998/nov/01/110100813
.html>
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AsiaBizTech: Vietnam To Cut Net Access Rates
In order to promote the Internet the Vietnamese government has
announced plans to reduce access rates by up to 30 percent. Current
rates put the Internet beyond the reach of most Vietnamese consumers.
Vietnam awarded its first ISP licenses in November 1997. However, a
year later, in a country of over 77 million people, there are just an
estimated 11,000 Internet accounts in Vietnam. Further,
Non-Vietnamese nationals hold half of the subscriptions.
ISPs report that the number of individuals and private companies
using the Internet has dropped to 27 percent from 44 percent in June
of this year. This, they believe, is directly because of the expense
of accessing the Internet.
The State Steering Committee for the Internet Development of Vietnam
made the announcement at an Internet conference in Hanoi.
<http://www.nikkeibp.asiabiztech.com/Database/98_Nov/03/Mor.01.gwif.h
tml>
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ISP INDUSTRY
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BBC Online Network: UK ISP Subscriptions Rising
Recent ISP subscription figures in the UK show that there are now an
estimated 1.86 million British subscribers.
Together, AOL and CompuServe account for over 48 percent of ISP
market. AOL UK now has over 500,000 subscribers, up 75 percent on
last year's figures, while Compuserve reports 400,000 subscribers.
Demon Internet follows these with 250,000 subscribers, or over 13
percent of the market. BT Internet reports 165,000 subscribers
followed by MSN with 160,000 and VirginNet with 145,000.
Competition for subscribers was compounded earlier this year when two
free ISP services, Dixon's Freeserve and X-Stream entered the market,
with an estimated 120,000 subscribers each.
<http://news.bbc.co.uk/hi/english/sci/tech/newsid_204000/204802.stm>
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Las Vegas Sun: India Finally Privatises ISP Market
Over a year ago, the Indian government announced plans to issue
licenses to private companies wishing to become Internet
Service Providers.
The state run ISP, VSNL, has maintained a monopoly for some years and
Indian users have continuously complained about high prices and bad
service.
The opening up of the market to the private sector is poised to
improve both Internet rates and the quality of service Indian users
can expect. While plans for deregulation were announced in September
of 1997, in February of this year, the Telecom Regulatory Authority
of India objected to the license agreements put forward by the
government, and the policy had to be reformulated.
The Indian government has been previously accused of impeding the
development of the Internet in India. VSNL have effectively strangled
the uptake of the Internet by charging 1 million ruppees (USD27, 473)
for a one year 64-kbps link. In addition, subscribers have to buy in
bulk blocks of 500 hours and pay an additional 83 cents a minute
access charge.
<http://www.lasvegassun.com/sunbin/stories/tech/1998/nov/01/110100955
.html>
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Techserver: Saudi Arabia Issues First ISP Licenses
The government of Saudi Arabia has authorised 40 private companies to
provide Internet access. To date there have been no ISP licenses
issued in the country.
However, there is confusion as to whether the list of 40 is a
shortlist, or the final list of companies that have been granted ISP
licenses. The names of the successful applicants have not yet been
released.
ISPs will begin providing Internet access in the next month,
according to the government spokesperson, the president of King
Abdulaziz City for Science and Technology.
The Saudi government plans to retain tight control of the Internet.
It had repeatedly delayed issuing licenses until it was certain that
central control of the Net could be effectively maintained. All the
ISPs will be linked to the same server, located in the technology
city.
Saudi Arabia has a population of over 20 million, a quarter of who
are non-Saudi nationals.
<http://www.techserver.com/newsroom/ntn/info/110398/info9_11405_nofra
mes.html>
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ECOMMERCE
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Jupiter Communications: Holiday Gift Market Remains Untapped
Analysts have identified the holiday season as an 'untapped' market
and advise online merchants to use this year to build up a strong
seasonal 'gift-buying' trade.
The 1998 holiday season will generate online revenue in excess of
USD2.3 billion, more than double last year's takings of USD1.1
billion, according to research by Jupiter Communications.
However, Jupiter predict that only 16 percent of this holiday
season's revenue will be generated by gift purchases. Gifts will
account for the majority of puchases in just 11 percent of cases. To
date, most online retail purchases are made by the individual for the
individual.
To entice consumers online merchants need to provide a service that
off-line merchants cannot, according to Jupiter analyst Nicole
Vanderbilt, giving gift registries and wish lists as examples.
<http://www.jup.com/jupiter/press/releases/1998/1102a.html>
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Gemini Consulting: German Businesses Appraise Ecommerce
A new study reveals how companies in German speaking areas evaluate
Web commerce. The study was conducted jointly by Gemini Consulting,
the University of Freiburg and Computer Zeitung.
The report, the Electronic Commerce Enquete, is based on a survey
sample of 914 corporate decision-makers, primarily in German
companies. 116,621 written questionnaires were distributed in
the autumn of 1997.
The study found that while over half of the companies surveyed have a
positive view of the Internet, a third do not consider the Web a
serious business medium. Further, over three-quarters of the
executives surveyed say the Web cannot replace one-to-one contact
with major consumers.
Just over 15 percent of companies offering online purchasing said
their Web presence was profitable.A further 36 percent expect their
Web sites to generate a profit in the next few years. A third of
companies described their Web presence as a successful public
relations tool.
85 percent of respondents said that ecommerce had increased
international competition in the market place. When questioned about
the major barriers to ecommerce, 71.1 percent cited the lack
of accepted online business practice. 70 percent pointed to the need
for electronically signed contracts in order to speed up development.
In contrast, technology issues were considered a minor hurdle.
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The Industry Standard: Ecommerce in Europe Set to Rocket
Ecommerce revenue in Europe will surge to over USD8 billion by 2004,
up from USD35.8 million in 1997, according to a report by Frost &
Sullivan.
The 'European Market for Internet Electronic Commerce,' report
predicts that by 2004, the number of Europeans with Internet access
will reach 44.9 million, up from 9.9 million in 1997. As the number
of users rises, business-to-consumer trade will dominate the
business-to-business market. In 1997, business-to-business trade
accounted for over 92 percent of ecommerce transactions in Europe.
The study predicts that by 2004 over 40 percent of ecommerce revenue
will be generated by what the report terms as 'intangible' consumer
goods, namely online services and information. Business products will
generate 20 percent of ecommerce revenue, followed by 'tangible'
consumer products.
<http://www.thestandard.com/articles/display/0,1449,2294,00.html?home
.bf>
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E-Valuations Research: Majority of SMEs to Build Ecommerce Sites
64 percent of small businesses are planning to develop
transaction-enabled Web sites in the next five years, according to a
new study by E-valuations research. The results are based on a
survey of 500 small businesses in the US, conducted in March 1998.
Three-quarters of SMEs expect the Internet to effect their business
in the next few years. The study found that 62 percent believe that
having a transaction-enabled web site will give them an advantage
over their competitors. Of those who already maintain a
commerce-enabled site, 92 percent believe it gives them a competitive
edge.
Companies who believe the majority of their customers are online are
the most likely to build transaction-enabled sites. Further, these
companies have much higher expectations of ecommerce, predicting that
the Internet will increase revenue by as much as 50 percent.
Cost and security concerns were cited as the major barriers to
building transaction-enabled Web sites.
The study also found that there is an opening in the market for a
product that would help small businesses to solve the problems faced
in building transaction-based Web sites.
<http://www.e-valuations.com/emerch/>
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TechWeb: Emarketers Respond to Analysts
In a testament to the growing demand for software specifically
designed to intelligently manage and improve customer relationships,
several new products have come on the market.
The new software enables emarketers to develop a virtual character to
welcome consumers to the site, point them in the right direction, in
effect helping them with their purchase. This allows the interaction
to become increasingly personalised as the agent built up a profile
of the consumer.
To date there has not been a market for such a product. However, as
analysts continue to point out the need for businesses to focus on
customer retention, this market is becoming buoyant.
<http://www.techweb.com/internet/story/TWB19981021S0015>
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ZDNet: Online Trading Settles Down
While online trading continues to grow, two industry reports indicate
that the market may be settling down. This is according to analysts
at Credit Suisse First Boston and Piper Jaffray Inc.
The reports defined an online trade as a trading order executed over
the Net, rather than the number of customer accounts which have been
the basis of other estimates. CS First Boston calculated that
253,000 such trades were conducted online in the third quarter of
1998. The Piper Jaffray estimate set the number of online trades at
264,000. Overall, this represents a 14 percent increase on the
previous quarter.
Online trading has grown steadily in the first three quarters of 1998
but in each quarter the rate of growth has slowed down. Credit Suisse
First Boston estimated that in the first quarter of 1998 online
trading rose 25 percent. The growth rate slowed to 16 percent in the
second quarter and again in the third.
The traditional off-line trading houses recorded the highest number
of online trades, with Internet-only brokerages falling behind.
<http://www.zdnet.com/zdnn/stories/news/0,4586,2158540,00.html>
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ADS/MARKETING
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IAB: Online Ad Revenue to Hit USD2 Billion in 1998
The revenue generated by online advertising in 1998 will reach USD2
billion, more than double the 1997 figure, according to IAB.
Online advertising generated USD906.5 million in 1997.
The Internet Advertising Bureau's report found that in the second
quarter of 1998, online ad spending rose to USD423 million, up from
USD214.4 million, the 1997 figure for the same quarter. This brings
the 1998 first-half total to USD 774 million, up 125 percent on the
first half of 1997.
Banner ads generated 58 percent of all online ad revenue, sponsorship
deals 37 percent, and interstitial ads, 3 percent. IAB found that 56
percent of ads are sold as a package, success measured by a
combination of impressions, click-through rates and cost-per-sale. 40
percent are sold as straight cost-per-thousand deals, and 4 percent
as performance-based ads.
In terms of industry spending, the computer business accounted for 26
percent of online ad spending, followed by consumer-related
advertising, 24 percent, financial services, 13 percent, new media 13
percent, and telecommunications, 9 percent.
The results are based on a survey of over 200 companies, and
incorporates data from 1200 Web sites. Price Waterhouse Coopers
administered the study.
<http://www.iab.net/news/content/1998rev.html>
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Wired: Banner Ads Drop in Price
The cost of renting advertising space on the Internet is falling,
according to a report by AdKnowledge.
The study found that the cost of placing an online ad in September
1998 had dropped to USD36.29 CPM, down from USD 37.84 CPM in May of
1998. At present the CPM, or cost-per-thousand viewings, is the basic
online advertising unit.
Ad Knowledge attributes the decrease in price to increased
competitiveness in the marketplace. While the number of businesses
advertising online is growing rapidly, so too is the number of
Internet businesses seeking to generate revenue from advertising on
their site.
The falling rates may also indicate that prices were artificially
high, and that advertising executives are more discerning about where
and how much money to spend on online campaigns.
However, recent research has indicated that the industry is moving
toward hybrid campaigns and away from the basic CPM rate.
<http://www.wired.com/news/news/business/story/16024.html>
<http://www.adknowledge.com>
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COMPUTER INDUSTRY
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Forrester Research: PC Sales in the US Will Slump in 2000
A new report by Forrester Research predicts that PC sales in the US
will peak in 1999, with a heavy fall off in corporate sales to
follow.
In the run up to the year 2000, US companies are upgrading and
revamping entire computer systems to offset problems with the
millenium bug. While this will contribute to the surge in PC sales in
1999, 80 percent of companies expect to cut their spending
considerably in the following years.
The report predicts that PC sales will reach USD55 billion in 1999,
dropping 15 percent to USD47 billion in 2000. It expects the market
to stagnate through 2002. According to Forrester's Carl Howe it is
unlikely that PC industry will regain the loss in sales, referring to
the 1990s as the PC's glory days.
Forrester expects the PC market to change considerably in the coming
years, with two-thirds of US companies focusing their spending on
Internet related appliances. Also, increased competition in the lower
end of the PC market means that prices will be drastically cut in
order to stimulate sagging demand and to shift excess stock.
<http://www.forrester.com/press/pressrel/981028b.htm>
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MISCELLANEOUS
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Broadcasting & Cable Online: Online Porn Industry Facing Crisis
The online porn industry has reported an annual growth rate of 40
percent over the last number of years but this is about to come to an
end, according to industry analysts. There are currently an estimated
60,000 porn Web sites in the US.
Forrester Research estimates that the revenue generated by the online
porn industry in 1998 will Mtotal USD1 billion dollars. This
represents over 20 Mpercent of the overall ecommerce industry, which
Forrester estimates is worth USD4.8 billion.
However, the relationship between the Internet, pornography, the law
and freedom of expression continues to be the subject of intense
controversy. To date, legislation has been the primary weapon used to
curb the industry.
However, the financial industry may be able to inflict more damage.
As credit card companies such as American Express and other financial
institutions consider cutting off services to porn sites, the future
of this lucrative industry look far from certain.
<http://www.broadcastingcable.com/>
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Gemini Consulting: A Flexible Work Place Means Higher Profits
Companies should re-examine the traditional workplace models if they
are to retain competitive advantage, according to a new study on
workers attitudes accross the globe by Gemini Consulting.
Those companies who maintain inflexible conditions particularly with
regard to time, opportunities and incentives risk diminishing their
profit margin.
The study found that overall the majority of workers feel that
employers are not meeting their needs. According to Gemini, the
implications are serious. "In an economy where knowledge,
information, and the quality of workers are vital to competitive
advantage, this failure to meet employees’ needs could represent a
threat to competitiveness itself.
Workers accross the globe identified their top five priorities in the
workplace as: ability to balance work and personal life, work that is
truly enjoyable, security for the future, good pay or salary, and
enjoyable co-workers
The study was commissioned by Gemini Consulting and conducted by
Yankelovich Partners. 10,339 workers in 13 countries, including 10
European countries, Russia, the United States, and Japan were polled.
<http://www.gemcon.com/Pages/general/workforce.html>
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Campus Computing Project: 44 Percent of College Courses Use Email
The number of US Colleges that incorporate technology into the
classroom is rising steadily, according the findings of the Campus
Computing Project Survey. The results are based on a survey of 571
colleges around the US.
The study found that an increasing number of academics use email and
the Internet in their courses. 44 percent of college courses use
email, up from 32.8 percent in 1997 and 8 percent in 1994.
A third of courses use the Internet as part of the syllabus, up from
24.8 percent last year. A further 23 percent incorporate the Web into
the course structure, up from 5 percent in 1994. 15 percent use
CD-ROMs.
Contrary to popular belief, the study found that a higher number of
academics, 51.6 percent, access the Internet on a daily basis
compared to 45.1 percent of undergraduates.
45 percent of private school students go online compared to 29.3
percent of community colleges.
<http://www.campuscomputing.net/>
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THE CLICKONOMIST
Whether you are striving for competitive advantage or merely
struggling just to stay in the game, The Clickonomist is in tune with
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MAKING IT WORK
The Internet and information technology are changing the way we work
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__________________________________________________________________
This newsletter is copyright 1996 - 1998 Nua Ltd. Permission is given
to reproduce this newsletter in any format pending full recognition
of Nua Ltd. Nua do not accept responsibility for the accuracy of
information contained in this newsletter. The content has been
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