Start-Ups Swoon Over Small Biz

by Amy H. Blankstein

Loud cloud. Beam dream. Deep canyon. Brown truck. This isn’t a free-association psychology test, it’s a new Web-centric way of building a business. A string of Silicon Valley start-ups, along with some of the nation’s biggest and oldest corporations, are creating online products for small companies to automate almost every routine business function. Loudcloud Inc., formed by Netscape boy-wonder Marc Andreessen, was an operation shrouded in secrecy until it announced earlier this year that ­ surprise! ­ it’s getting into the act. Loudcloud will offer a sophisticated and largely hands-off system for managing business Web sites. “Building and running a high-growth Internet business Web site keeps getting harder and more complicated,” Andreessen says. So does coming up with catchy names for companies.

It’s Raining Penguins
Flightless waterfowl are on the march. Linux, the open-source, user-friendly flavor of the UNIX operating system, was until last year known mostly for its cuddly cartoon penguin mascot. Now it’s on the verge of challenging Windows’ near-monopoly in the PC market. That means it’s time to consider it as an operating system that could someday run your business. Companies that sell Linux hardware and software, such as Caldera, Red Hat, and VA Linux, are growing quickly. Compaq, Dell, IBM, and Silicon Graphics are among the big computer makers now offering similar systems. Corel and Sun Microsystems are providing office suites. The research firm International Data Corp. estimates that 24 percent of all new Web servers installed in 1999 ran Linux. Despite all this momentum, the operating system doesn’t yet support enough software applications and third-party hardware to be practical as the operating system for a typical desktop business PC. But keep an eye out ­ enough new penguin-friendly products could arrive in the next year to give Microsoft some genuine competition.

More News From the Land of the Ill-Named
Hewlett-Packard Co. and United Parcel Service of America Inc. are two of the old-guard companies racing to do business in a different way. H-P has spun off a Web site called DeepCanyon, which allows small businesses to purchase individual research reports, often for $500 or less, from big firms such as Dun & Bradstreet, Forrester Research, IntelliQuest, and The Yankee Group. These firms typically charge clients tens of thousands of dollars per year or more for a subscription to their reports and access to their databases ­ making it impossible for small businesses to tap their expertise. Meanwhile, UPS, famous for its ubiquitous brown delivery trucks, has set up a subsidiary called UPS e-Ventures to explore the emerging world of electronic commerce. The first such venture is UPS e-Logistics, which aims to “create a service bundle for small- and medium-sized Web businesses to provide solutions for everything from warehousing to order fulfillment to customer service.”

So Crazy, It Might Not Work
Two of the more interesting launches of last year, Centerbeam Inc. and Everdream Corp. [see this month’s feature, “Paying for IT”] offer cradle-to-grave computer network management; the companies will set up a small company’s PC network, then take care of upgrades and repairs ­ all for a set monthly fee. The concept is no longer new, and as the companies roll out their services nationwide, it’s about to get it’s first real test. Its success may ride on two factors: First, both companies are relying on new remote management features in the Windows 2000 operating system to hold down their costs. Second, they make that remote management possible by providing companies with high-speed DSL connections, which are especially vulnerable to security breaches.

Don’t Link on Me
A rebellion’s brewing on the Internet, and it may break the ties that bind the young medium together. Many companies aren’t happy that someone else can profit by posting their proprietary information or creating links deep into their sites. Entities as varied as the Mormon Church and eBay are putting the brakes on loose linkers, and some are even taking their fight to court.

What’s the legal rationale? It depends whom you ask. In 1999 Ticketmaster Corp. filed similar but separate suits against Microsoft and Inc., and claimed a ranged of offenses, including trademark dilution, unfair business practices, and misrepresentation. More recently, eBay attempted to block ­ a service that monitors items on many auction sites ­ from creating deep links.

“Companies that are attempting to deep link are committing the cyberspace equivalent of trespassing,” says eBay spokesperson Kevin Pursglove. Both eBay and Ticketmaster do allow other sites to deep link to their sites ­ as long as they have signed a licensing agreement. This controls links and produces revenue, and depending on how the courts rule, such agreements could become more common. The glory days of the Web as a grassroots medium may soon be gone.

“If we move too quickly to ensure everybody’s property rights on the Internet, there are values that get lost, like freedom of expression.” Peter Jaszi, professor of law, American University’s Washington College of Law.

They may be lost already. In December the U.S. District Court in Salt Lake City, Utah, ruled that the Utah Lighthouse Ministry, a religious organization that critiques the Mormon Church, had engaged in contributory copyright infringement by posting links to sites that had published the Church’s copyrighted text. In other words, it’s not only illegal to link, but also to link to sites that link. If the Web’s like the offline world, not many will defend that right ­ until the link broken is their own.

Small Business Computing Staff
Small Business Computing Staff
Small Business Computing addresses the technology needs of small businesses, which are defined as businesses with fewer than 500 employees and/or less than $7 million in annual sales.

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