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E-business
Watch
Tracking the
online media to bring you the key e-business trends
November
28, 2000
The Net Gets Physical
One of the
Internet’s greatest strengths has been the ability it has given us to find
information and goods located anywhere in the world. Regardless of our
location, it is possible to find and buy books on gardening, read about the
history of Estonia, or e-mail distant friends and colleagues. However, while
the Internet has been an efficient tool for finding information in the virtual
world, it has performed less well at tasks rooted in the physical world.
This is set
to change as a host of emerging technologies and companies begin to break down
the divide between the physical and virtual worlds by linking the physical
characteristics of users, locations and objects through the Internet.
Bridging the physical and the virtual
New
technologies and Internet-enabled devices are making it possible for users and
others to know precisely where they are, and what’s around them. Among the most important innovations are
improvements in the accuracy of the Global Positioning System (GPS), which uses
satellites to pinpoint a user’s location; the E911
mandate, which requires U.S.-based cellular service providers to know the
location of a cell phone to within 125 metres by 2001; and Bluetooth, which lets devices in close
proximity speak to each other. While
each of these technologies has its limitations – GPS, for example, works very
poorly indoors, and cellular providers have had difficulties meeting the
accuracy requirements of the E911 mandate – they are creating the foundation
for a new generation of location-sensitive services.
At the same
time a number of
software and service providers are compiling rich information about physical
locations. Companies such as InfoUSA.com, Infospace and Mapquest have been leading the way in the
supply of rich, location-specific data, such as how to drive to a certain
address, the phone number of a nearby store, the closest ATM, and detailed
traffic and weather reports. InfoUSA.com, which currently licences its
directory to over 1500 websites and information services, is also embarking on
an ambitious project to compile a photograph record of all 12 million
U.S.-based businesses listed in its database.
It has already
posted more than 750,000 photos, and expects to add another 5 million
photos by the end of 2001.
Meanwhile, Geovector, an InfoUSA.com partner, enables
users to get information about objects or locations by simply pointing their
handheld device, essentially bringing a ‘point and click’ interface to the
real-world. While the product is still in its developmental stages, the company
has encoded 30,000 ‘points of interest’ in the San Francisco area. By pointing a wireless device at the target
object, users can access information (stored on the Internet) that will tell
them such things as a store’s hours, the real-time availability of a table at a
restaurant, information about historical sites, or even details about other
people in their vicinity who are using the service.
Next-generation transformations
While many
of these location-sensitive services are still in their early stages, they have
the potential to dramatically change the structure and operation of many
economic activities
Logistics
Companies such as @Road
and Savi Technology are combining the power
of new, location-sensitive technologies with the convenience of the Web, to
help companies monitor complex supply chains. @Road’s GPS technology and tools
make it possible for companies to use the Internet to track the precise
location of their vehicles, employees, goods and other assets. In addition to tracking assets, @Road also
can dispatch and communicate with their mobile workers. In a similar manner, Savi Technology attaches
Radio Frequency Identification (RFID) tags to objects – everything from trucks,
trailers, and pallets, to forklifts -- and then, connecting to Internet data
repositories, provides real-time information about these physical assets.
Automotive
Dozens
of companies are rapidly developing products and services to meet the needs of North
American automobile drivers and passengers during the 26 billion hours
they spend in their vehicles each year. General Motors has recently added
traffic information, stock quotes, e-mail, news, sports and other web-based
information to its OnStar system, a
GPS-enabled in-vehicle safety, security and information service. Meanwhile, start-up MobileAria is building a
platform that allows its users to manage their personal information (e-mail,
calendar, and address book) and access Internet-based information, using a
voice-activated interface that is integrated into their vehicle.
Retail
While online
retailers transformed the retail industry by enabling customers to buy goods
over the Internet, new developments are challenging retailers in their own
physical stores.
GeePS, a New
Jersey-based start-up, has developed technology to help brick-and-mortar
companies deliver targeted advertising and promotions to cell phones as they
pass near the stores. Similar
applications could provide services that alert shoppers to sales and events
while they are in a competitor’s store, luring customers away from nearby
retailers. Already, Toronto-based BuyBuddy
offers wireless comparison-shopping that helps customers compare a product’s
price to those of other online and offline retailers.
Other companies are seeking to turn mobile devices into new
point-of-sale terminals, capturing the lucrative billing relationship with
customers. Britain’s Virgin
Mobile recently announced that it would be launching an “m-wallet” service
to enable its customers use their phones to purchase items from vending
machines and other nearby objects. In
September, the company
previewed its “cellular vending machine,” which would allow users to
purchase items simply by dialling the vending machine’s unique phone number.
Users would then be billed the cost of the products on their next mobile phone
bill.
Travel
The travel
industry also is poised for further change, as travelers begin to use new
Internet-enabled devices and services to learn, in real-time, about the
locations they are visiting, as well as buy goods and services.
Companies such as Vindigo
and CitiKey are making available
sophisticated city guides that combine geographical data with editorial
commentary on local businesses, services and events. Vindigo, for example, has built a very popular application that
allows users with Palm-based devices to find shopping, dining and entertainment
venues near their geographical location. The application also provides
up-to-date restaurant reviews, movie times and other pertinent information. Ultimately, such city guides will provide
access to rich new services, from full-transaction capabilities to time- and
location-sensitive discounts. Users
walking down the street will not only be able to buy tickets to a show, they
will be able to receive a discount if they are one of the next ten people to
walk through the door.
Looking ahead
Although
widespread use of many of these devices and applications may be years away,
they are all built upon an infrastructure which is quite real, and which will
soon be in place. However, in the
short-term it will be difficult to differentiate between their hype and
hope. Geovector, for example, has not
yet built a functioning device; GeePS cannot yet determine a user’s
geographical location. It is also unclear
whether many of these location-based services are actually built upon viable
business model. While the concepts
behind them are intriguing, the market for location-based services is still in
its infancy.
Finally,
one needs to be aware of the emerging social implications of these new
technologies. Building a bridge between the physical and virtual worlds raises
serious issues around privacy and security (Do I really want a retailer to know
when I’m not home?) As the Internet
extends further into the “physical world”, how companies resolve these issues
will become a crucial component for success.
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