A bad day to be American

As the Nasdaq continues its downward spiral, I am secretly delighted for a number of reasons. Firstly, I`m tired with the Yanks` monopoly on information technology - the medicine that they prescribe for the market often tastes bitter to those outside of the US border. The applications they develop rely too much on bandwidth that is cheaply available to them, but still restricted to us.

[VIDEO]Secondly, their individual wealth was often built on unstable foundations. They created an idea of what technology should be, but were unable to reach the goals they had created for themselves. They weren`t pressured to turn concept into reality, as they could live off the kind donations of willing investors wanting to get rich quick, but not understanding that profit and risk are interrelated.

Thirdly, some cannot envisage anything beyond the US of A. They take a pre-Galileo view of the world, and place great faith in the fallacy that the rest of the world revolves around them. Apart from this being a fairly obnoxious attitude, it also excluded many US companies from capturing the burgeoning global market, which has proved a little more stable in recent weeks, and could have offset some of their losses.

Their regional attitude was equally reflected in the US, with some IT companies - most noticeably cellular service providers and network service companies - failing to even move out of a particular state.

The reports coming in from America tell of suicidal investors, bankrupt entrepreneurs and a generally unhappy IT nation. Those who lost millions of dollars in the crash are shell-shocked, still wondering where they went wrong, and trying to figure out how they will make the next payment on their mansions.

The reports coming in from America tell of suicidal investors, bankrupt entrepreneurs and a generally unhappy IT nation.

Jason Norwood-Young, Technology editor, ITWeb

They have only themselves to blame. The signs of impending doom were all too clear for those removed from the gold rush to see. Whenever a high value is placed on an essentially worthless item - such as an impossible business plan, or a new service in an over-competitive market - it is inevitable that something, somewhere, some time soon, is going to give.

An ideal analogy is the Holland tulip frenzy, which saw fortunes made over the trade of tulips, until, one day, people realised that tulips are actually pretty useless possessions, and those with a large tulip investment suddenly couldn`t give them away. Who in their right mind would invest in tulips? Probably the same people who would invest in IT companies with little or no chance of success.

From a technology point of view, the point of failure is easy to pinpoint. The entire e-business concept, while being a noble goal, proved to be much harder to implement in reality than on paper. Small start-ups actually believed they could roll-out an end-to-end e-business solution, while larger and wiser players played their niche, and built their laager in preparation for the imminent disaster.

Linking up disparate IT systems within a company has always been a challenge for the best systems integrators armed with the toughest engineers and the smartest technology. The process usually costs a fortune, takes a fair period of time, causes major disturbances within the company, and the benefits are difficult to predict.

E-business was designed to take this concept of interconnecting IT systems further, talking to the IT systems of suppliers, distributors, suppliers` suppliers, and distributors` distributors. The complexity of such a project cannot be underestimated. Beyond linking systems that were never built to work together, other concerns, such as security, scalability and access control all come into play - concerns that were never truly addressed.

People`s disillusion with e-business is similar to that with enterprise resource planning a few years ago: it`s not that it can`t work, it`s just not as easy as it all sounds.

I have no doubt that many corporations will successfully utilise e-business infrastructures to gain serious business advantage over their competitors. Some of the brave and foolish have already made a good go at it, with some great success stories at the end of it. In time, standards will be ironed out, applications that fulfil the missing pieces of the e-business picture will be developed, and best practices and best-of-breed will help define what works from what doesn`t.

I`m also sure that the Nasdaq will bounce back. The market is still filled with technology companies with real skills, real technology and real value. The bigger players may have felt a loss in their share price, but their businesses are not going to disappear overnight. People rely on IT now more than ever. The crash has forced IT companies, large and small, to take a good look at their organisations, identify what they want to be, and consolidate to refocus on their core businesses.

It also gives the rest of the world pause from the influx of technology from the Yanks, and gets us wondering if they are really as infallible as they would have us believe. After all, they can`t even spell "analyse", "optimise", or "fibre optic" correctly.