Pineapplesoft Link 30th Issue!

Pineapplesoft Link celebrates its 30th issue with its own logo! Visit the Pineapplesoft Link homepage at http://www.pineapplesoft.com/newsletter and let me know what you think. The logo was designed, entirely online, by http://www.1800mylogo.com.

Especially for you if you link to us: you can download a cool Pineapplesoft Link button from http://www.pineapplesoft.com/newsletter#button!

Sean McLoughlin Consulting Practice

In other news this month Sean McLoughlin, who has been helping me since the very first issue of Pineapplesoft Link (2 and a half years ago -- thanks Sean), has started his own management consulting practice based in the UK. Join me to wish him much success.

You can contact Sean at sean@oldwoolmill.co.uk.

The XML Economy

"XML by Example" has gone through its fourth printing and continues to enjoy strong sales. It is available in any store that sells quality books and Amazon.com offers a cool 30% discount (http://www.amazon.com/exec/obidos/ASIN/0789722429/pineapplesoftonl). If you already have a copy, order one for a friend today!

If you are a regular reader of this newsletter, you know that I am very active in eCommerce and XML. Over last month, I participated in many discussions that helped me sharpen my vision of how the two will blend. Here's the vision -- the XML economy.

The Internet and Transparent Markets

One of the fundamental laws of a capitalist economy is that a transparent market, one where every player has access to all product and pricing information, is the ideal market. The transparent market will, over time, converge towards the best pricing for the best products with the best level of services.

That's the economic theory at least. In practice it is very difficult to create transparent markets. The stock market and, possibly, eBay are the best approximations we know of. Yet the theory is useful in guiding our actions. For example, the antitrust laws are derived directly from this theory.

When it comes to the Internet, you can read this law in many interesting ways -- particularly if you are a proponent of open software and open standards. Here's one which I call the XML economy.

The Internet proved such a fertile soil for the development of eCommerce, and the so-called new economy, because it is a good basis on which to build an almost transparent market.

Technically speaking, it is based on open standards (HTML, HTTP, SMTP). Open standards enable anybody, no matter what computer he or she uses, to join and participate in the online economy.

Conversely other forms of eCommerce have not achieved widespread adoption because they failed to build a transparent market. EDI (Electronic Data Interchange) is a prime example: it is a good idea and one that works. However it never captured a significant market share because it is a relatively closed club with such high membership dues that few business can afford to join.

For Small Business Too

The involvement of all business, not matter how big or small is crucial to the development of a transparent market. Small businesses, although they seldom make the front page of magazines, are the bread and butter of the US and European economies. They provide the dynamism that the market needs as they develop new products, challenge established players and strive to grow or, more simply, are content to exploit a useful niche.

However, for small businesses to participate in any market, the price must be right: small business have small means. Fortunately, on the Internet, the price is right. Internet access is so cheap no businesses can afford not to have it.

Furthermore web sites rent for low monthly fees and good editors can turn anybody in a passable webmaster. Even building a fully-fledged online shop is cheap: most ISPs offer shopping carts at reasonable rates. And for those who prefer to join an established mall, there's Amazon's zShops and similar offerings from Yahoo! and Lycos.

The XML Economy

Yet, so far, the Internet is geared towards consumer eCommerce. The next stage, as we all know, is to build a successful business-to-business online market.

If you remember the January issue (http://www.psol.be/old/1/newsletter/20000101_xmledi.html), you know that business-to-business commerce (bricks-and-mortar and online) dwarfs consumer commerce. For most businesses, it is more important to succeed in business eCommerce than in the consumer arena.

What is required to build a successful business market online? Again, the most successful market is a transparent market. Experience has shown us that, technically, it translates in open standards. On the Internet, for business-to-business eCommerce, open standards mean XML.

Which leads me to what I call the XML economy. The XML economy is simply a business-to-business online market. To be successful, it must be transparent or, technically, built on XML. The XML economy is my vision of an Internet where any business, small/big, Windows/Macintosh/Linux/PalmOS/AS400 can participate at a reasonable cost.

We're not there yet. The closest things today are XML marketplaces such as Ariba or mySAP. However they are closed technically and expensive to join. In the next 2-4 years, they will be gradually replaced by the more open and cheaper solutions needed for the development of a transparent market -- the XML economy.

We witnessed the same transformation in the consumer arena. Until 1996-1997, if you had come to me and inquired about building an online shop, I would have fired my programmer's editor and written one for you. Few businesses could afford it.

In 1997, I would have sold you a product. I don't remember the exact figures but depending on the options, it costed between $3500 and $10000. That was still expensive.

Today most ISPs offer shopping carts for $50-$200 per month. HTML editors, such as NetObjects, let you edit and manage your shop from your desktop.

In the process we have seen many proprietary solutions, such as ActiveX, come and go. The winners have succeeded because they built on transparent solutions.

Where To Now?

The XML economy is coming. What should you do about it? It depends on what business you're in.

Most small businesses are well advised to continue deploying the Internet but wait before joining the XML economy. This is still a time for pioneers and it is expensive to be a pioneer.

If you work for a larger corporation, plan your move in the XML economy now. It was not until the beginning of this year that I started systematically advising action. The market is maturing fast and now is the time to claim your stake.

As you plan your solution, remember the economic laws. The transparent market wins. You should resist vendors who try to lock into their proprietary solution. You may benefit in the short term but it will hurt your medium to long term developments.

If you are a software vendor and you sell to business users, make sure your application is ready for the XML economy. Also be open, remember that proprietary solutions will hurt you in the not so distant future.

About Pineapplesoft Link

Pineapplesoft Link is a free email magazine. Each month, it discusses technologies, trends and facts of interest to web developers.

The information and design of this issue of Pineapplesoft Link are owned by Benoit Marchal and Pineapplesoft. Permission to copy or forward it is hereby granted provided it is prefaced with the words: "As appeared in Pineapplesoft Link - http://www.pineapplesoft.com."

Editor: Benoit Marchal
Publisher: Pineapplesoft www.psol.be

Acknowledgments: thanks to Sean McLoughlin MBA for helping me with this issue.

Back issues are available at http://www.psol.be/old/1/newsletter/.

Although the editor and the publisher have used reasonable endeavors to ensure accuracy of the contents, they assume no responsibility for any error or omission that may appear in the document.

Last update: June 2000.
© 2000, Benoît Marchal. All rights reserved.
Design, XSL coding & photo: PineappleSoft OnLine.