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IBM: U.S. and Europe Have Different E-Commerce Models

In a survey of leading European companies, IBM and the Economist Intelligence Unit identified significant differences in the understanding and use of e-commerce between the United States and Europe.

Some European companies believe that "much of the talk about e-business" is simply "hype."

The IBM report comes at a time when frequent, if often conflicting, reports about European attitudes to e-commerce are appearing in the press. A recent study from Andersen Consulting revealed "hesitancy" on the part of senior European executives in taking up the challenges of e-commerce.

One of the key findings of the IBM study is that although the business-to-consumer market offers the richest revenue potential, the business-to-business market offers the best short-term opportunities for return on investment. The Europeans, it appears, are going for the short-term opportunities.

"This study is a landmark in gaining a deeper understanding of how European businesses are approaching the new digital economy, said Khalil Barsoum, general manager IBM Global Industries, EMEA. "(It) aims to gain an insight into the impact the Internet will have on businesses and consumers--and one thing is agreed by all the companies that were interviewed--the impact will be far reaching and profound."

The European executives interviewed named a whole host of concerns about implementing e-commerce. Chief among them were: high telecommunications costs; lack of government interest; lack of technology standards; lack of support for projects at board level; language and cultural differences; and the prospect of EU regulation and taxation of the Internet.

If the voiced concerns sound unduly negative--and IBM makes no judgments about them--European executives may like to compare their thoughts with those of UPS senior VP Joe Pyne, who spoke at the Transportation Club of Dallas this week.

Mentioning that UPS, the world's largest package delivery company, invested $10 billion in IT over the last decade, Pyne said that e-commerce has already transformed the company's business. He quoted figures from Forrester Research estimating that business-to-business e-commerce will reach $66 billion by the year 2000 and the U.S. Department of Commerce's estimate of $300 billion by the year 2002.

Meanwhile, IBM plans to continue its European study, investigating some of its areas in greater depth. In its current report it shoots down the "fast follower" theory as a business strategy--which maintains that companies who follow after the pioneers can avoid their mistakes.

"The first step is to become familiar with the Internet," the firm said.