Big business still wary of Net
A new study shows that online network growth may stall as corporations remain apprehensive about the Internet.
International Data Corporation today released the results of a study that indicate that, although corporations are achieving a four-times return on investment from the development of Internet, intranet and extranet applications, Fortune 1000 companies have not, and may not, deploy mission-critical applications on the public Internet until reliability and security of the new medium can be guaranteed.
The IDC "Global Infrastructure" research was conducted in conjunction with The Open Group, a vendor-neutral, international consortium of more than 200 members with combined information technology budgets in excess of $55 billion annually.
IDC surveyed IS managers at multinational corporations, including those in retail, financial services, telecommunications, computer equipment and mail-order industries. The average number of employees in these companies was more 19,000 with average annual revenues of $1.5 billion.
IDC's research found that there has been a tremendous return on investment for companies that have deployed intranets and extranets to reduce costs and increase productivity. New revenues have been made by companies "pioneering Internet commerce.
Although these revenues have been made, it's still felt that there is a danger that the Internet will not fulfill its promise will not fulfill its promise as a business infrastructure that opens up new markets and encourages new ways of doing business. This conclusion by corporate executives is based on unresolved issues such as security, reliability and performance may lead to a "leveling-off" of Internet benefits and therefore slow down its deployment as a business tool, according to IDC.
"Our findings clearly indicate that the phenomenal business growth in the Internet may plateau because the failure of technology standards to meet business requirements," Michael Sullivan-Tranor, IDC analyst, said in a statement.
"In addition, the short term success companies are experiencing with intranets and extranets may also lead to a fragmentation into hundreds of closed private networks built on top of the public infrastructure. Without a common set of specifications, technologies and products which guarantee a level of security and reliability businesses require, the Internet may simply become an interesting public access network," he continued.
Despite those findings, the IDC study also shows that the use of Internet technologies has grown at a rate of 200 percent per year; a full 100 percent of companies have deployed an intranet, 50 percent are extending services to remote users via a Virtual Private Network (VPN) and 66 percent were extending their network to business partners via an extranet.
In addition, the research finds that the popularity of intranets is being driven by the ease-of-use, the ability to provide new applications, the ability to tie-in remote offices and network management.
However, 25 percent of the companies surveyed said they are inhibited in intranet deployment by issues of interoperability, lack of skills, and integration with legacy systems; More than 80 percent of companies said security was the primary barrier to expansion of extranets and VPNs. Less than 15 percent of companies surveyed said they would deploy mission critical applications on the Internet.