THE INTERNET AND TECHNOLOGY CONVERGENCE

THE INTERNET AND TECHNOLOGY CONVERGENCE

One of the most frequently asked questions by Wall Street investors, journalists, and business entrepreneurs is, “What’s the next big thing?” As it turns out, the next big thing is in front of us: We are in the midst of a networking and communications revolution driven by the growth of the Internet, Internet-based technologies, and new business models and processes that leverage the new technologies.

           Although “digital convergence” was predicted a decade ago, it is now an undeniable reality. Four massive industries are moving toward a common platform: the $1 trillion computer hardware and software industry in the United States, the $250 billion consumer electronics industry, the $1.6 trillion communications industry (traditional and wireless telephone networks), and the $900 billion content industry (from Hollywood movies, to music, text, and research industries). Although each industry has its favored platform, the outlines of the future are clear: a world of near universal, online, on-demand, and personalized information services from text messaging on cell phones, to games, education, and entertainment.

           The Internet is bringing about a convergence of technologies, roiling markets, entire industries, and firms in the process. Traditional boundaries and business relationships are breaking down, even as new ones spring up. Telephone networks are merging into the Internet, and cellular phones are becoming Internet access devices. Handheld storage devices such as iPods are emerging as potential portable game and entertainment centers. The Internet-connected personal computer is moving toward a role as home entertainment control center.

           Traditional markets and distribution channels are weakening and new markets are being created. For instance, the markets for music CDs and video DVDs and the music and video store industries are undergoing rapid change. New markets for online streaming media and for music and video downloads have materialized.

           Today, networking and the Internet are nearly synonymous with doing business. Firms’ relationships with customers, employees, suppliers, and logistic partners are becoming digital relationships. As a supplier, you cannot do business with Wal-Mart, or Sears, or most national retailers unless you adopt their well-defined digital technologies. As a consumer, you will increasingly interact with sellers in a digital environment. As an employer, you’ll be interacting more electronically with your employees and giving them new digital tools to accomplish their work.

           So much business is now enabled by or based upon digital networks that we use the terms electronic business and electronic commerce frequently throughout this text. Electronic business, or e-business, designates the use of Internet and digital technology to execute all of the activities in the enterprise. E-business includes activities for the internal management of the firm and for coordination with suppliers and other business partners. It also includes electronic commerce, or e-commerce. E-commerce is the part of e-business that deals with the buying and selling of goods and services electronically with computerized business transactions using the Internet, networks, and other digital technologies. It also encompasses activities supporting those market transactions, such as advertising, marketing, customer support, delivery, and payment.

           The technologies associated with e-commerce and e-business have also brought about similar changes in the public sector. Governments on all levels are using Internet technology to deliver information and services to citizens, employees, and businesses with which they work. E-government is the application of the Internet and related technologies to digitally enable government and public sector agencies’ relationships with citizens, businesses, and other arms of government. In addition to improving delivery of government services, e-government can make government operations more efficient and also empower citizens by giving them easier access to information and the ability to network electronically with other citizens. For example, citizens in some states can renew their driver’s licenses or apply for unemployment benefits online, and the Internet has become a powerful tool for instantly mobilizing interest groups for political action and fund-raising.