The Internet is here to stay and its effect is lasting. That was the theme of John Sculley's luncheon keynote address at the DMI conference on Tuesday.
"It would be a huge mistake to think that because dot-coms melted down that the Internet melted down," said Sculley, founder of investment firm Sculley Brothers, and formerly CEO of Apple Computer and of PepsiCo.
The best use of the Internet will be figured out, he said. Technology is adopted in stages, he remarked, pointing out that it took 30 years to figure out how best to use telephones. And even mobile phone technology started out as CB radios.
The Internet has revolutionized the way business is done. The biggest shift was from companies being in control to customers being in control. Customers today want best-quality services, products they can customize, at prices they choose and they want them right away. And that came about largely through the head of Dell Computer, Michael Dell.
Dell did what forward-thinking companies have always done: changed the ground rules. Pepsi did it when it invented the "Pepsi Challenge," at which 50% of participants chose Pepsi over Coke in blind taste tests, Sculley recalled, and created a festival of media coverage.
Dell did it when it established a build-to-order model in which he stored six or seven days of inventory instead of six months of inventory, so Dell customers could order a PC, custom-made to their specifications and receive it in 48 hours.
Bill Gates understands that we're moving from a product-centric way of conducting business to a server-subscriber way. Dot-Net is Microsoft's strategic effort in this direction.
The technologies this strategy includes are: XML, which provides the ability to take disparate data from a variety of sources, so information becomes compatible among networks, Sculley said.
Another Microsoft technology, Passport, has collected 160 million registrations for Microsoft's online properties. People register when they first use or sign up for any of Microsoft1s Internet services. "It's like a tollgate, and for the moment -- it's free," Sculley said.
Microsoft1s biggest competitor in this strategy? AOL/Time Warner a company that already uses subscriber services, said Sculley, listing the properties based on a subscription model: the magazines, Time/Life subscription services and AOL, which "probably controls 70% of the world's e-mail," Sculley said.
"There's no place to hide from these duo-polies," he quipped.
What will all of this amount to in terms of the Internet's evolution? "Over the next five years, we'll see the Internet look and feel more like television and radio with content being brought to the user instead of the user having to find content," Sculley predicted. In general, there will be broader bandwidth and better content.
The result for direct marketers is they will become more integrated in the business processes of the companies they serve, Sculley said.
