The turbulent years of the dotcom boom and bust were actually good for the internet industry because of the business lessons learned, a panel of industry experts said last week.
The over-inflated claims about how quickly the internet could revolutionise business during the dotcom boom are widely thought to have damaged the IT profession's credibility and made businesses sceptical about investing in new systems.
But, speaking at a seminar on the future of the internet in London last Thursday, Richard Duvall, chief international officer at online financial services provider Egg, said the internet is now in the "post-frenzy" stage, where companies have a greater understanding of an emerging technology.
"Historically, every time a new technology enters the economy you get the automation stage, then the frenzy period before a pause and then the golden age," he said. "With something like electricity, you are talking 20 years between stages, but the internet has evolved much faster. We have passed the frenzy stage, which is a good time for reflecting on lessons learned."
A major area of focus for companies involved in e-commerce at the moment is creating demand for high-speed broadband services, with much of the talk centred around potential "killer apps" such as video or music downloads.
However, the consensus among panel members was that single areas of content would not drive broadband demand. "There is a misconception that you need new services to drive demand for broadband," said Henrik Kjellberg, director of lodging at online travel firm Expedia. "Consumers are beginning to realise that higher speeds improve existing services immensely."
What we learned from the dotcoms
"The companies that did well were the ones that didn't go balls-out dotcom. The real winners were those who looked at the technology with a hard, cold eye and used it for 'bread and butter' add-ons, taking a very pedestrian, old-fashioned approach. By being boring they have made money." Philip Virgo, strategic advisor, Imis
"At the height of the boom we were worrying about how to keep the company afloat, so we didn't spend lots of money - and we are glad about that. We have learnt from our own and others' capacity to move to the next phase of exploitation of the internet. At the time we were scared we were being left behind but we haven't been compromised and we have been able to do the things we wanted to do but not spend the money others did." Peter Vetch, IS and e-business director at MG Rover
"There was a collapse in the dotcom market but many have thrived and survived - for example, Amazon.com and Lastminute.com are showing progress. The real impact on the IT industry has come from the collapse of the financial markets." Fahri Zihni, president, Socitm
"I think the biggest impact has been on telecoms and the lack of adequate broadband capacity. The major telcos are risk-averse about making the necessary investment in broadband capacity." Jim Haslem, former Socitm president and head of IT at the London Borough of Bromley