Is it all over for e-business? We don't think so; but the party atmosphere has gone a little sour. The champagne has gone flat, and the guests are suffering a serious hangover.
The reality is that more and more business - internal to companies, between companies, and between companies and their customers - is being transacted online. There are some very good reasons for this: it is quicker, cheaper and gives everyone more choice.
However, making it happen in practice is far from easy. Investors backed dot.coms in the expectation that here was an entirely new way of doing business that would win out against the old, slow and expensive methods. They were right; but it hasn't happened in they way that they hoped.
What has happened is that 'old economy' companies have adopted the new techniques, out of necessity - destroying the advantages of many dot.coms. Meanwhile dot.coms have experienced a host of new problems familiar to any startup, ranging from technical difficulties to the problems of building a customer base from scratch. Many suffered from a simple lack of basic business experience, the need for which does not go away just because the business is online.
Enormous progress is being made in putting everything that business does online, and translating proprietary systems into the common language of the Internet. Much of this is taking place behind closed doors and within existing corporate boundaries, where the distorting mirror of the stock market does not penetrate. The pioneers were right in saying that the Internet would revolutionise business; but it is happening from the inside out, and in thousands of small ways, many of which individually appear trivial.
Much of the work being done now has little to do with technology itself. Rather it is concerned with changing processes and ways of doing things, so that (for example) online queries and authorisations take the place of what used to be done using paper forms and signatures. This means changing not just technology, but the working habits of thousands.
Meanwhile, a growing number of companies are providing the key pieces of enabling technology which makes all of this possible. Many of these companies are in the UK: the research work we have recently done for the Department of Trade and Industry is producing an online database of e-commerce enabling technology . The range of products is impressive, and instructive, from security solutions and payment systems, to software designed for particular industries (shipping, banking, retail etc). Some of these products are designed for internal use; some for dealing with customers; some for automating dealings with partners and suppliers in complex, industry-specific value chains.
All of these are a necessary part of the process of putting businesses, of every kind, online. There is no single 'magic bullet' solution. But slowly but surely, all the key pieces that make business possible are being translated into the new medium of online software and services.
Putting 'e' on the front of a business name no longer looks like a guaranteed recipe for success - any more than adding '.com' to the end. But in the more realistic climate that now prevails, no-one would suggest going backwards.
The reduction of stock market values, for both 'old' and 'new' companies, reflects two things. First, the move to do things online is proving more difficult than the original optimistic projections. The e-honeymoon is definitely over; we are down to the hard, everyday business of making the relationship work in practice.
Second, it reflects the torpedoing of many previously unassailable certainties - such as the certainty that big,blue chip companies would go on making money by continuing to do things the way they have always been done. This no longer looks a safe bet. In the new world that business has become, the truly successful formulae have yet to emerge: something that should give hope to businesses trying new things.
What is certain is that online technology has become part of the landscape. E no longer stands for exceptional; e now means essential, and any company that wants to survive has to buckle down to making it work. Welcome to the world of e-relationships; the honeymoon may be over, but real life is just beginning.