Impact of the Internet

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

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sumer items are purchased with a single mouse click, but the Internet can be used to make available product information and facilitate data transfer. Thus a purchase order can be issued, received and the product shipped entirely through the Internet. Analysts expect more than 30 percent of all business-to-business commerce to take place on the Internet before 2005 (Bourge, 1999, p. 2). General Electric already uses e-commerce to buy commodity items and is saving an estimated 10 percent to 15 percent when compared with non-Internet purchasing. A company spokesperson confirms that approximately $5 billion of General Electric's supply transactions could be conducted on the Internet by 2002 ("The Future," 1999, p. 12a). It is also estimated that domestic business-to-business trade on the Internet will reach more than $1.3 trillion by 2003, which is more than 30 times the $43 billion transacted in 1998. Because business supply chains are expected to make increased use of e-commerce over the next five years, the computing and electronics industries, today's leaders in Internet commerce, will be supplanted by the aerospace and defense, petrochemical, motor-vehicle, and utility industries (Bourge, 1999, p. 2). Importance of Securit
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Approximate Word count = 3082
Approximate Pages = 12 (250 words per page)

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