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Andreessen Urges ISPs to Expand Role

Netscape co-founder advises companies in the Internet gold rush to stick to panning gold.

By David Needle, PCWorld   

"The leading companies like Amazon run their e-commerce operation in-house much like the traditional data center with programmers, packaged software, and applications they develop," said Andreessen. "The idea that the vast majority of the world's businesses, especially small business, will buy a router, e-commerce software, and everything else to make it work is silly."

Andreessen sees businesses of all sizes relying on ISPs for a range of services including Web-based e-mail, voice mail, fax (as well as voice and fax integrated with e-mail), and complete e-commerce services for selling via the Internet.

Andreessen said companies are being motivated by "Amazon-envy," wanting to replicate the success of the online bookseller. But before exploiting the Internet, companies will have to shift their thinking from the traditional idea of just selling locally, communicating with customers by phone and fax, and sticking with slow product cycles.

"We're seeing a radical shift where the old rules get broken and companies have access to customers worldwide via the Internet," said Andreessen. "The opportunities and challenges of the next five years are profound."

Still, Andreessen said it's unclear which services will be most in demand. Will micro-payment systems, where consumers pay as a little as fractions of penny to access some services and publications on the Internet, be a hit? Will digital cash (an alternative to credit card payments) overcome its slow start? Andreessen isn't sure, but urged ISPs to invest in technology now so they'd be prepared to "scale up" to whatever services and audience they want to go after.

Andreessen also confirmed reports that surfaced earlier this week that Netscape and Intel were investing in Red Hat, a leading supplier of Linux, a version of Unix for PCs and servers.

"We have versions of Netscape software for Unix and NT, and we're cranking up support for Linux," said Andreessen, which he said is now the most popular Unix in terms of numbers of users, estimated to be in the millions.