Making Sense of Service Providers - Page 5

Civilizing the Frontier

Doing business on a frontier demands a high degree of self-sufficiency. At one time or another, merchants have created their own currency; companies have built and maintained their own roads; mining operations have constructed and owned entire towns.

The Internet is ready to move beyond such frontier economics to become a place where people can do business without having to do it all themselves—where even a tightly focused service provider can find enough of a clientele to make it a viable concern.

A thriving ecology of service providers reduces the barriers to entry for everyone else who wants to sell on the Net. The more service a company can buy, instead of performing for itself, the more that company can focus on doing what it does best.

This principle is at least as old as Adam Smiths 1776 essay on the economics of mass-producing pins. The questions are how and when, not whether or not the service providers will become the true infrastructure of e-markets.

Technology Editor Peter Coffee can be reached at [email protected]