Is IT Ready to Support Ubiquitous E-Commerce?

FRAMINGHAM (03/17/2000) - A teen-ager pulls a packaged dinner from the kitchen freezer, scans it across a countertop Web pad and downloads cooking instructions from the food manufacturer. A computer system at the local supermarket receives an electronic replenishment order for the item and adds the same dinner to the family's weekly order.

Across town, the teen's mom stops on her way home to gas up the family car at a Web-ready pump. During the 90 seconds it takes her to fill the tank, she checks the news headlines and downloads directions to the site of her daughter's saxophone performance later that evening.

Welcome to the not-so-distant future of ubiquitous computing, when people will work and play using a variety of simple networked devices or information appliances, many of which tap into the same databases of consumer data anytime, anywhere.

In the ubiquitous world, everyday household appliances will also be Internet-enabled to automatically and constantly communicate with their manufacturers and with one another. Instructions on a packaged dinner scanned across the screen of a Web-ready fridge, for example, might automatically set the oven to the proper cooking temperature for the dinner.

"Three to five years from now, it will feel very commonplace to open the fridge or sit in the car and just have the Web be there. It'll just become embedded in our daily lives," said Kurt Schacker, a vice president at Wind River Systems Inc., an Alameda, Calif., maker of embedded software for devices ranging from pacemakers to antilock brakes.

In short, ubiquitous means everything will be networked to everything else, with everything on all the time - operating conditions that have huge implications for information technology groups that will be called on to develop and support new information appliance applications and the infrastructure on which they run.

Building or leasing and maintaining reliable, high-capacity broadband and/or wireless networks that can support around-the-clock communications across hundreds of millions of devices tops the list. Another big issue for IT is transcoding content from Web pages now viewed largely on PCs into new formats usable on the miniature screens of palm-size and other devices.

"The No. 1 thing IT needs to be aware of is that everything done on information appliances has to have someone in the back room managing the device and the content delivery," said Brian Conners, vice president of network device alliances at IBM.

The way consumers access the Internet also will shift away from single PCs to multiple, low-cost and simple-to-use information appliances such as Web terminals, gaming consoles and screen-phones. By 2004, International Data Corp.

(IDC) in Framingham, Mass., forecasts, the worldwide market for information appliances will exceed 89 million units, or about $17.8 billion, up from 11 million units and $2.4 billion in 1999.

Buffalo Grove, Ill.-based eTForecasts estimates that by 2005, more than 150 million information appliances will be accessing content from corporate servers in the U.S. alone. Worldwide, the figure will reach 800 million.

"Current online users want access to services in more locations and situations, while many other consumers desire Internet access without the inherent complexities of PCs," said Bryan Ma, an IDC analyst.

Just last month, IBM announced a deal with Boston-based Fidelity Investments, which plans to distribute broadband-enabled IBM Internet appliances to an unspecified number of customers during a pilot test this summer. Customers will use the devices to access the financial services company's online trading site (www.fidelity.com), plus news and other relevant content furnished by Internet content portal Lycos Inc.

The idea is to "optimize" services by tailoring them specifically to how customers use the Internet appliances, said Tracey Curvey, an executive vice president at Fidelity.

"If someone is using an appliance only for trading, we could only have keys that match the keys of the trading functions, or we could use the screen differently or have different content," said Curvey. "You can match the device and the functionality to the needs of customers," which works to increase customer retention, she added.

The plan is for Fidelity's in-house IT group to develop and customize those applications, said Curvey.

Information Everywhere

One big implication for IT is on the content front. In the ubiquitous world, information will have to be transcoded for delivery to everything from Internet-enabled stoves and car dashboards to wireless cellular phones and pagers.

New infrastructures will also be required. To remain competitive and offer new remote control and diagnostic services, electric utility companies, for example, will need the ability to manage power flows on a per-household and per-minute basis. That means revamping network infrastructures to monitor consumption at individual houses.

Puget Sound Energy Inc. in Bellevue, Wash., for example, is extending a pilot wireless network and installing network-based meter readers that continuously monitor customers' power usage and relay that data back to the utility every five minutes. The technology also gives the utility the ability to detect power outages and will eventually enable it to provide a whole range of new network-based services, including the ability to diagnose and repair appliances remotely.

Other companies are still trying to make devices that could succeed as kitchen-based home information sources, a function the PC never fulfilled, despite predictions of some early PC visionaries. Seattle-based CMi Worldwide Inc.'s waterproof, greaseproof Internet-enabled Icebox kitchen resource center will hit retail shelves this summer. The unit was designed to let users download recipes, access online shopping, retrieve e-mail, view videos and listen to CDs. It also connects to CMi's portal for recipes and other specific kinds of information but has no hard drive and gets information mainly from CMi's site.

Users control the flow and pace of information and navigate among functions via a wireless keyboard and remote control device.

"We ended up creating a product that wasn't a PC because that wasn't what consumers wanted in the kitchen," said CMi Vice President Russ Whitman.

"What they wanted was something simple and reliable with quick access to the most important things, rather than the ton of things a PC can do. You don't need to do spreadsheets or create PowerPoint presentations in the kitchen. But e-mail access and entertainment are important," Whitman said.

Unlikely Bedfellows

Last but not least among IT's challenges is that standards, such as common bar code types, must be hammered out so previously unlikely bedfellows, including appliance makers, food manufacturers and grocers, can exchange consumer information on packaged foods, cooking time, usage and more on a plug-and-play basis.

Just last week, Sears, Roebuck and Co. announced a partnership with America Online Inc. that involves creating Web-linked home appliances. Also last week, Ford Motor Co. and Sprint Corp. announced a partnership to put Internet access and other advanced communications features in Ford's cars.

"What you're finding is that companies that were never really partners now have natural synergies," said Jim Devlin, a senior vice president at the Dallas-based retail systems division of ICL, the IT services provider owned by Fujitsu Ltd. Last year, ICL and Frigidaire Home Products, the North American arm of Sweden's AB Electrolux, demonstrated a "smart refrigerator" with an integrated 233-MHz microprocessor, 32MB of RAM, an Ethernet link, a bar-code scanner, Windows 95 and a flat-panel touch screen.

Just last month, LM Ericsson Telephone Co., the Swedish telecommunications company, and Electrolux announced a joint venture called E2, in which the companies will work together on smart appliances that can be controlled and monitored over the Internet.

And within the next six weeks, Procter & Gamble Co. is slated to convene an information appliance brainstorming session to be held at England's Cambridge University with global heavyweights in the retail, networking and content businesses, including Wal-Mart Stores Inc., Cisco Systems Inc., Nokia Corp. and Yahoo Inc.

What all of this indicates is "that this crazy world where appliances talk to each other and you can control your cooker from a telephone or PDA is not far away," Devlin said. "You will see appliances out this calendar year that will hook up to the Web. They'll link to [information] portals now being built, with the mainstream of this being just two to five years out," he said.

But it's not here yet. "The ubiquitous world is going to come on us quite quickly," said Devlin. Yet most companies, especially retailers, aren't in the least prepared to take advantage of the benefits that world has to offer, he said.

"I'm almost 100 percent confident that the average retailer has set no cycle time about how to intersect that [ubiquitous] world," he said. "Most IT managers I meet tend to be pretty head-in-the-sand-type guys."

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