SAP Canada exec says investors doubt dot-com startups

TORONTO — Peter Blackmore couldn’t speak “off the top his head” about how Microsoft’s .Net strategy would impact SAP’s business, but he had plenty to say about the future of e-business after the dot-com meltdown.

At Toronto Board of Trade breakfast Thursday, the managing director of SAP Canada said investors are skeptical of new technology startups and that the failed companies of the new economy built their businesses on the Web without a proper foundation.

The Internet is still an important and useful tool for business, said Blackmore, but companies that want to take advantage of e-business need to take a closer look at their internal operations. “The Internet is not going away. It is still evolving.”

However, many companies are opening themselves up to the Internet without resolving internal problems first. “People are building companies and systems as if it were a perfect world.”

The new economy in the Internet age does not negate the need for sound business practices of old, said Blackmore. “People have to know how to run a good business.”

E-commerce should not be viewed as a business in itself. “E-commerce is just one piece of the puzzle.” Companies should be using e-business to increase revenues, cut cots and improve efficiency, he said, whereas the dot-com frenzy was all about being first on the Web at whatever the cost.

“People thought we were entering a business revolution,” said Blackmore. He doesn’t dispute this, and draws a parallel to the advent of the automobile boom 100 years ago, where every carriage company was replacing horses with engines. “There were more car companies in Canada than there are in the world today.” Most of the startups failed, and that same phenomenon could be seen at the beginning of the century as it swept through the dot-com landscape.

Blackmore said now the revolution is businesses leveraging the Internet in a pragmatic way, “blending old economy needs with new economy collaboration.”

In this environment, he said SAP’s level of business activity is still high, but the level of closure is a little lower because customers are apprehensive about the return on investment. “Establishing ROI is a very speculative exercise.”

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Jim Love, Chief Content Officer, IT World Canada

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