Corporate Concerns May Stall Internet’s Growth

Although companies are seeing a huge return on their Internet-related investments, Fortune 1,000 companies have not as of yet - and may not ever - deploy mission-critical applications on the Net because of reliability and security concerns, according to new research from International Data Corp. (IDC).

IDC said research from its "Global Infrastructure" project showed that "the phenomenal business growth in the Internet may plateau because of the failure of technology standards to meet business requirements," said Michael Sullivan-Trainor, IDC senior analyst.

"In addition, the short term success companies are experiencing with intranets and extranets may also lead to a fragmentation into hundreds of closed private networks built on top of the public infrastructure," Sullivan-Trainor said. If a common set of specifications, products and technologies that guarantee reliability and security are not developed, "the Internet may simply become an interesting public access network," he added.

Even though new revenues are being realized by companies that are blazing an e-commerce trail on the Internet, the revenue gains and return on investment (ROI) have not necessarily impacted major corporations’ bottom lines, IDC said.

The study also found that companies’ use of Internet technologies has grown at a rate of 200 percent per year, and a full 100 percent of the Fortune 1000 companies surveyed have deployed an intranet. In addition, 50 percent of those companies were extending services to remote users via a Virtual Private Network (VPN), and 66 percent were extending their network to business partners via an extranet.

For companies, intranets are easy to use, and they have the ability to provide new applications and tie-in remote offices and network management.

But, the growth of intranets is being slowed by issues of interoperability over time, lack of skills, and integration with legacy systems. More than 80 percent of companies said security was the primary barrier to expansion of extranets and VPNs, and less than 15 percent of companies surveyed said they would deploy mission critical applications on the Internet.

According to IDC, there’s hope, though, for those who want companies to move to the Internet. Sixty percent of corporations surveyed said they would accelerate their plans for moving to the Net if security and reliability were guaranteed.

IDC conducted its research in conjunction with The Open Group, a vendor-neutral, international consortium of more than 200 members with combined information technology budgets in excess of $55 billion annually. IDC surveyed information services (IS) managers at large multinational corporations. The average number of employees in these companies was more than 19,000 with average annual revenues of $1.5 billion.

IDC’s Web site is at http://www.idc.com. IDC is an International Data Group (IDG) subsidiary.

The Open Group’s Web site is at http://www.opengroup.org.

(Contacts: Joyce Radnor or Siobhan Carroll of Stauch Vetromile & Mitchell PR, 617-787-0521 or 401-438-0614)