It is estimated that the Internet is likely to generate sales in excess of $3.2 trillion in the year 2003, a result of both revolutionary and evolutionary factors. These sales will not be limited to such well-known companies as Amazon.com and eBay, companies whose Web sites are garnering huge numbers of hits. For example, the e-business unit of Avnet's computer marketing group in Phoenix has experienced growth averaging 30 percent per month since November 1997 (Gonsalves & Kerstetter, 1999, p. 25).
Among manufacturers, companies such as Dell Computer, Oracle, Gateway, Cisco Systems, and Hewlett-Packard already are connect tens of thousands of times each day to other businesses as well as to consumers. Even large traditional companies such as Dow Chemical, Boeing, AlliedSignal, and General Electric are installing sophisticated e-business systems. The marketing (and financial) message they and others are sending is that companies must use the Internet if they are to remain competitive (Bridges et al, 1999, p. 107).
Companies are finding that the Internet eliminates many of the limits to scale which have traditionally plagued companies. The economic principle commonly known as the "law of diminishing returns," which says that companies realize smaller incremental gains for each new customer after a certain point, either does not apply in the world of e-commerce, or sets in at a very high level. It is not more costly to reach the one millionth customer than the seventh customer when using a Web site, and the revenue generated from the one millionth customer does not go to support a larger facility which, in traditional companies, would be necessary to support such a large operation ("Sales on the Internet," 1999, p. 11).
In a recent survey, approximately 40 percent of 802 CEOs calculated that e-business would account for more than 10 percent of their revenues over the next five years. Of that 40 percent, fully half expect t...