The business of doing business underwent a radical transformation this week. First, Sun Microsystems announced that it would offer some of its critical business software free over the Internet. Responding to the challenge, Microsoft Corp. two days later revealed that it would offer its own top-selling business software over the Net as well. Both moves are part of a larger shift in the business landscape. The Internet is now making the inroads into traditional business practices that have long been promised.
While attention has focused on e-commerce -- selling goods to individual consumers over the Internet -- the real bonanza lies in business-to-business dealings, sometimes referred to as e-business. By one estimate, e-business revenues will soar to $1.3 trillion in 2003 from a mere $43 billion in 1998. Most analysts consider those figures conservative.
The attraction of e-business is diminished costs. Of course, the Internet can be used to cut traditional communications and costs and to speed up transactions. If each paper-based transaction for operating resources costs about $150, then the potential for savings is great.