Swimming lessons in sea of technology

Date: 23/05/1996

By Tim Jones

THE information revolution sweeping through the developed world has left many small European companies dazed and confused at the range of products on offer - a situation that Bob Cushing of US networking company 3Com Corporation hopes to remedy.

“In some ways, we may well look back on the hype surrounding the Internet and decide that all it did was confuse people by obscuring the real benefits,” says the 38-year-old European director of 3Com.

Cushing believes there is a need for a return to basics. “What usually gets an organisation started in this area is nothing to do with personal communication. It is usually about resource-sharing: sharing printers, access to fax machines, to file-servers and so on. That is what usually starts people off in networking,” he argues.

After that, he says, follows a desire to eliminate paper communications within the company and only then, as stage three, comes the wish to communicate with the outside world via electronic means.

“Now, because of the publicity surrounding the Internet, people are looking at networking and communications from the third stage first, and a lot of them are finding it very confusing connecting to the Internet,” he says. “They are swimming around in this sea of data, most of which is totally irrelevant to their business activities. After the entertainment factor has worn off, they start asking themselves what they are doing.”

The main reason for small and medium-sized enterprises (SMEs) to talk to the outside world electronically is simply to communicate with their business customers and suppliers. Since many large firms are becoming more and more automated, they require their small-business suppliers to act likewise.

“The newer generation of SMEs are 'pilot fish' companies that swim alongside the big firms and act as out-source contractors and service providers,” he says.

“They are comfortable with new systems and very willing to use them.”

But one problem, at least until now, has been the type of system on offer. “One of the major problems for the small firms is having a product at the appropriate price to make it worth their while getting involved in this type of technology,” says Cushing.

At the same time, they want something easy to install, and available from their local dealer or their software company. As a result, companies like Microsoft and Compac are coming up with specialist software for this market, while Hewlett Packard and 3Com are increasingly developing tailor-made small business data-networking systems.

Generally speaking, the market will meet the needs of these companies because there are attractive niche profits to be made.

As for politicians, Cushing believes the European Union has a role to play in developing the much-vaunted 'information society' - but less through technology awareness programmes and more through making high-quality communications infrastructure available.

“They can do a lot of the development projects at the large scale and deregulate. Beyond that, it's almost both an educational and support function,” he stresses.

Cushing argues that making sure the telecommunications markets in Europe are opened up and prices slashed would do far more to create the information society than any number of seminars.

“Look at simple things. In the US, all local calls are free. In Europe, no local calls are free.

By deregulating telecommunications in Europe and forcing down prices, this makes the expense of communication - which is a big cost in setting up a small business - a much smaller factor,” he says.

Europe's failure to hang on to its best information technology brains is another key to the Union's underdevelopment in the field, according to Cushing.

3Com's headquarters in Santa Clara, California, are surrounded by national ghettoes of highly trained foreigners lured to work in the US by cash, advanced research and ready access to venture capital.

“It's like the United Nations,” says Cushing, adding: “For a brand-new IT company, getting funds once you are up and running is possible, but going to a merchant bank simply with an idea for a new technology is likely to get you nowhere in Europe.”

As a result, small IT firms tend to expand by being bought by bigger fish and 3Com is no exception, having recently snapped up three UK firms.

Nevertheless, Europe can still do something right. 3Com decided to locate its largest assembly plant in Dublin, with 200 staff, because it was attracted by its highly educated workforce and huge development subsidies.