Worl From page 15 Yorkton Securities one day and asked him what it would take to get into the investment bank- ing industry. “He took me to Toronto and hired me. I was Canada’s first Internet t analyst I guess, four ycars ago.” Here’s what he had to say in an interview last week with the News: Most of the hype about e- commerce has been about consumer spending. I’ve read that. the bigger part of the icture has to do with the Einking of companies — busi- - Mess to business e-commerce. Pavan: “The true significant opportunities zre on the busi- ~ ness to business side. . “Businesses have been transacting electronically for ages. Wal-Mart essentially defined ciectronic commerce. Most major companies have used electronic data inter- change for about 20 years. That’s electronic commerce; it’s just extremely complicated, “' tedious and expensive. The . Internet has just cut the price ‘point by ebout 90% and made ‘ it available to everybody. It’s not a new concept; it’s just now cheap, economic and scalable. *“Ye’s really reached a critical ‘ mass. where virtually everyone _. from ‘the general consumer to “ the largest corporation will ‘want to use it in the next cou- * ple of years and will have to use it_in the next couple of years after that.” Fou sester “research firm) projects that in ‘the United States jlone, the Ss inter compan trai hard ¢ Internet will aie $43 bil billion, ia. 1998 and surge to $1.3 trillion : 2003, an annual growth. rate of 99%. - , “At looks great for busitress, *- ‘but what about the: con- sumer? > “3.0 Pavans “The: ‘Intemct as a . whole i is really empowerin the consumer“ when: you ‘think about it. All of 'a sudden you ‘ don’t have to spend five days _ (a__ business ing in 25 different stores © oe d exactly what you want at - ‘the best price you want. You ean have an electronic robot search the whole Intemet and come back’ and say here's the . places you can buy this televi- ‘sion, aud it’s cheapest here. “What that’s going to force - ore conipstitive pri ¢ end of the day it’s probably going ‘to ‘bea’ wash ‘for: the’ ty .of retailers because : - ‘will. get com-- cir. efficiencies will "idak, Fax or drop ta yout oxtry tz: At ld will especially in rural areas. “It’s all self-fulfilling. Just the other day you saw Ford and General Motors talking about their entire business to business e-commerce supplier strategy. It’s all going to be done on the Interner now. That’s a huge step. It’s mainstream, massive companies telling mid-tier companies they have to do this. That’s where the (e-commerce) growth really starts to happen.” When people think about e-commerce, most think about computers. Where do you sec the hardware going? Pavan: “The computer is going to be a very small subset of the total ¢-transactions issue. In Japan, for example, you see a huge adoption of Internet- capable cellular phones. I think the wireless appliance market will dwarf the PC market in terms of units actually out there.” Has the challenge of secu- rity of e¢-transactions been met? Pavan: “The reality is that your transaction on the Internet has always been and will continue to be more secure than filling out a credit card slip at your neighbourhood gas sta- tion. “The only types of fraud that we've ever seen really in any substantive size has been when somebody gets 4 credit card number from somewhere else — in most cases a garbage can or from the floor off your Visa bill — and uses that num- ber to purchase something and have it shipped. “Our view is that it is very secure and it will get more secure. We'll see digital wallets, digital signatures becoming mainstream probably in the next year or two. Many sites -already have them.” t about hackers com- promising sites? * “Just as in the traditional worid, people will always rob banks and people will always - steal things from stores. Every me you see a security threat or breach, things are improved.” What kinds of physical : changes do you forecast for our. communities ‘as. ¢-com- merece becomes. more pre- _ dominant? . ~ Pavan: “All your neighbours ‘are going to have Web phones and the connectivity (Internet) is going to be forced into the home. “Businesses get less central- ized, Physical location doesn’t matter, all that really matters are the goods. More aad mere le. will be able to work at Pome. ‘More and more people will be mobile and_ be able to do more things. on their . -) Morice Oe. W.Van, BC VIP 175 Wednesday, December 15, 1959 - North Shere News - 17 HIGH TECH phones. Another example is, my parents live in Trail and the selection is very limited where they can buy from. My parents look at the Internet and shop- ping as a way to get things they couldn't get anywhere else. “More ind more people will be able to live in rural com- munities and enjoy choice and selection that was once just available in the city.” Where do you see the biggest impact of e-com- merce? . Pavan: “It will be in the way businesses are run, for sure, in the way that businesses deal with their suppliers. When Ford builds a car — maybe 10 years ago they might have had two or three weeks of spare parts at the assembly line. “Now that’s down to maybe a week or less. Soon, because things will get so effi- cient in terms of communica- tion and ordering and supply- ing and paying, inventories will start to go away in virtually all businesses and you'll start to get real-time supply of goods and more customization. “Everybody pays for all that inventory in stores. As thin get more efficient, hopefully that will drive the economy. That’s why the stock market keeps going up and up. ! think ay the computer and clec- tronic commerce are starting to . deliver on the promise that they gave 10 years agu — to make us more efficient.” What's the major trend on the immediate horizon? Pavan: “The movement of. the Internet from the comput- er to wireless information appli- ances, whether they be pagers, cellular phones, Palm Pilots, anything like that. We’re still largely a wired world. The biggest tend will be in unteth- ering us.” Winners and losers? Pavan: “The winners will be those who focus on business to business, security and produc- ing the actual infrastructure for the Internet. be “T boost ere’s going to some spectacul: re hiboe on the e-tailing side. A lot of these companics are starting up on ean with out the benefits of the traditional bricks and mortar retailers. I don’t believe that anybody cau compere in book business © with cr ters online because there 56 Chapters book stores.’ They’ ve got the infrastructure, they've got the expertise. You can’t beat “When Sears cemes online, : they'll be very difficult to beat ja.the categories they are known for. They already havea brand, they already know hew WISHING YOU A MERRY ~ CURISTIAS AND A VERY. PROSPEROUS NEW YEAR! i@Ss wonders YORKTON Securities’ internet and e-commerce enolyat Mark Pavan make ing paying close atiendon to the rapidly evolving worid of electronic commarcial : enterprise. to deliver and they know how to build catalogues. “We'll sce failures: in- the small ‘startups where | before they get big enough, they get crushed by traditional competi- tion. The reality is it will come because they'll: largely under- budget how much it costs to build 2 brand.” So the Internet is net the - great equalizer? Pavan: .“It’ is the great equalizer, but more for. the consumer than the business. It makes every consumer able to _access the same choices in a very marrow time frame. “Gift Suggest ns LAPTOPS - fare hen $188 PEHTIUMS from $355 Trstisa Satelite 428 CUT 109 Anybody w with very ile effort can get their hands on so much information about anything — : just like that.” . On the business side it’s not the great equalizer? Pavan: been the very sii portunity. for some and Yahoo, and I'm certain that there will more great ideas © coming out of the woodwerk . that also succeed on that scale, but you're going to need a lot of money to do it now. “In the U.S, venture capi- talist world, $100 million. “I think there has | ifcan: brands to be: started and built, like Amazon’ chrown | at an idea is nor that = unreasonable, You. can’t. find: that kind of money in Canada It’s going to be tough’ for small entrepreneur ‘to- buil portal right now or'do eny of these types of thin, less they "have a very unique idea. “When we first started rae ing Internet companies $50 million was a lot : brand. Now you pahetis need. $500 million if you decide build - it’. on”, your? own. Internet is all about: brand, yet brand is fragile.’ As sconi'as cus: tomers: are: di inted,. ne click and they’re go’ Son BvD ax peeevscnenesoes S11 Expert 98 G268 with, evi cettwae .