We all want faster connections and more bandwidth so we can see bigger, better banners, graphics, audio & video. But there's more to the story! Read on to find out the real reason... and what it means to your business!

by Eric Anderson

We hear it constantly: we need more bandwidth. Those who offer video-based content or bandwidth-eating banner programs are among those who raise this cry--but the real reason the Net will move in that direction has nothing to do with graphics or video. A far more important application is pushing the limits of existing bandwidth: the ability of large manufacturers and vendors to provide better information--and thus, better service--to suppliers and customers. This trend has far-reaching implications for the entire global industry.

I've spent many working hours this week on data warehousing; we're training on some new tools. Data warehousing is a hot topic in database management right now. If you don't know what a data warehouse is, it doesn't matter.

One of the tools we're adopting is basically a shuttle system for data. With this tool, for example, we can pick up data from a particular field in a particular database, manipulate it, and then dump it into another field in another database someplace else. The best part is that the databases can be anywhere; all you need is an IP address. This process can be completely automated, and described programmatically.

For those with database experience, some light bulbs might be clicking on.

A practical example: With this tool, for example, Barnes & Noble, could sweep all of the sales at all of the stores each night, manipulate that data and then deposit in it appropriately in each publisher's database. In other words, if you're a publisher, each morning when you come in and turn on the computer, you could see how many copies of your book Barnes & Noble sold yesterday in each of their stores. The marketing implications are pretty obvious. Did you send a press release to the Bay Area? You'd know if it did any good. Appear on a radio program in Iowa? You could tell if anyone bought. In other words, you'd be able to tie marketing activities more closely with sales.

What makes this possible is being able to locate the database using an IP address... in other words, the Internet. This interconnectivity has never been available before. Historically, collecting information from thousands of locations, sorting it, and redistributing it to thousands of completely different locations has been outside the realm of possibility. With the Internet, it's now quite feasible.

But think about this: for Barnes & Noble to do this would require dumping a huge amount of data through the Internet.

Now, think what happens when Auto America does the same for their parts inventory, Sears does it for their tires, etc. That's where the real bandwidth problem comes into play. That's why Gates and others see this interconnectivity creating bandwidth problems.

Historically, one of Wal-Mart's biggest advantages that has been its willingness to tie vendors into the Wal-Mart supply system and the foresight to invest in a system that can handle such interconnections. As the result, Wal-Mart's cost of making a sale is around 7-8% while other retailers have been much higher (10-15%). Technology allows Wal-Mart to enjoy a 3-4% price advantage.

For example, we are pushing to provide browser-based connections for our school-management software. The payoffs are huge; we don't have to deal with networking anymore. We don't have to deal with client-side issues. The downside is that we suck up bandwidth.

The point of all this is to remember: the Internet is first and foremast a NETWORK. While a network can be a broadcaster (such as radio or television), there are many other uses for the network besides acting as a new medium. This is where the really exciting part of the Internet is; it's where much of the growth in traffic will occur. It's also frequently hidden from those who attempt to apply traditional models to something incredibly non-traditional.

Eric Anderson heads Blaine Software, a consulting firm helping businesses leverage technology and the Internet for better results. Blaine Software is at https://www.blainesoft.com.

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