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I think the obstacle is not realizing that every day they wait they are operating at a competitive disadvantage. Once that obstacle is removed, they'll adopt. Your thoughts?

--Mike Buckley

As a generic statement what you write above pretty much sums it up. If you go looking for details as to why companies still don't adopt the Internet more agressively you would find many different answers that all revolve around the issue of money (cost).

Many of the traditional businesses (the brick and mortar guys) were really excited about putting more funcionality on the web a couple years ago, spurred on by the New Economy Paradigm -- you will be eliminated by your Internet based counterpart that is springing up around you if you don't do something now -- coming from Wall Street, Consultants and the whole buzz about it. Heck people were literally scrambling around trying to find ways to get to the something.....ANYTHING.

Now that the dust has settled and many who did not jump immediately and are still standing strong are now saying to themselves we don't have to hurry. So they are kicking the tires. Nonethless, darn near everyone (who we'd identify as pragmatists - the mass market, main street) is internalizing the DotBomb fall-out as the Internet is/was over hyped and they see all the failures of these start-ups and the failed migraton attempts by their peers. It has paralyzed them into fear. When you take that psychological profile and marry it to some of the price tags and deployment time frames associated with building out these applications then add two cups of a declining economy and stir those ingredients together you've got the perfect potion for an IT spending freeze. On the other side of that coin, your words about "if you wait you could be operating at a competitive disadvantage" is so true. This is another fear factor that is driving the pragmatist herd. This is what Andy Grove would identify as the Strategic Inflection Point. Those that hesitate will see their business fall off while those that do not will go on to greater success. It is the unkown about what course of action to take.

App Servers is a relativley new and novel concept to main street. I know, in my industry, that many of my peers (you would identify us as a prototypical paragmatist in the main street herd, annual revenue about $100 million, we don't have huge IT budgets) are using AS/400 and have IT saffs who are PERL and RPG programmers, they are not JAVA people. There is an additional cost in either re-training or replacing them. UPS, TNT, FedEx they've got the money to go ahead of the herd and can afford to make mistakes. They do 10-15 times more in annual sales than we do. There is a degree of complexity to what is made available as a product solution set by companies like BEA and IBM AppServers. It manifests itself in the cost to implement such platforms and applications. Casual observers only see the price of the software and hardware, there is more to it than that. I highlighted one as it refers to our companies IT staff. This is not exclusive to us. It is industry-wide in the demographic of our company size. We are the mass market. The fact that BEA is continually trying to improve on this feature of their product, requiring less programming skill to implement the product incrementally lowers the barrier to adopt such a product with each incremental improvement in that complexity feature. Choosing to focus on this area of the product will bring more success to the AppServer adoption by the mass market than trying to bundle eBS applications with it.

I think the trigger for the mass tornado will be IA-64 servers, Linux and Infiniband. All standard commodity parts which will drive the cost of deployment way down.


So, when Paul makes that statement, he's correct also, I think. The thrust of the collaboration between Intel and BEA is to pre-build more of this programming functionality into this combined architecutre that will make the offering even more pallatable to the likes of our company. It is likely that we may not see the AppServer really move up the S curve as a product category until these things start hitting the market. And I'm cetainly not privy to any specific details about the collaboration of the two companies. I've only seen words written by BEA that that is what the intended outcome of this project is about -- the small and medium size market. It doesn't mean they'll get it right. But, Intel needs this to be a success as much as BEA does (more on that this evening, I have to go into the office and finish a project for an interior company that supplies the Dodge Ram plant in Ramos Arizpe, Mexico - a new optimization program from their US suppliers - oh joy).
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