John is no stranger to this kind of forum. Last year after the Anaheim ICE show he went to Paris to moderate a conference. We asked John to give us his take on the Web, and a little view into its future so the rest of us can be as well-armed as Bill even if we don't have the capital to back it up.

WWWiz: Last time I saw you, you were headed to Paris to talk with Bill Gates. How did that go?

J.G.: Every year we have an IT conference which is a forum for the continued debate over networked computers with about a thousand of the industry leaders in Europe. Last year I had the chance to interview Larry Ellison and Bill Gates back to back. The whole thing was a battle of the network computers. Larry had toned down his pitch a year ago and said that if computers were going to be networked they would Intel-based. Gates had begun to point out that if there are network computers, Microsoft will support them. Then he gave us a demo of Office 97 and the demo crashed. [lots of laughs]

WWWiz: Tell me about what IDC Research is.

J.G.: The name of the company is International Data Corporation. Our Web site is idcresearch and we have idc.com. We're the world's largest market research firm that specializes in the computer industry. We have offices in about 45 different countries. Our customers are the vendors, like Microsoft, Novell, Netscape, IBM, etc. We basically tell them how big certain IT markets are, how fast they're growing, what kind of shipments, and things like that. Our biggest competitor is Gartner Group, which acquired Data Quest a few years ago which was our archrival. The Gartner Group customers are primarily end users of technology and our customers are builders of technology. That's what we do. We were founded in 1964. We are owned by IDG our parent company which publishes magazines, books and newspapers.

WWWiz: Where do you fit in, specifically?

J.G.: I manage research worldwide for personal systems, groupware, printers, peripherals, consumer research. I've been with IDC since 1991. I spent a year at DataQuest before that; I've been an analyst since the 1970s.

WWWiz: What's the IDC Internet commerce market model?

J.G.: It's a giant spreadsheet, practically a database at this point, that combines our primary research with uses of the Net with supply-side numbers that we have ó installed PCs, modems and things like that. It's a model that's broken down by region, that looks at the number of potential users of the Net and those who are actually on the Net. We look at how many are on the Net. We look at devices and users because they are not one in the same, and predict how many will be on the Net, how many of those that are on the Net are accessing the Web, how many that are accessing the Web are buyers of goods and services over the Net. If they are buyers, how much are they spending per month, how many hours are they on the Net per month? We're basically taking information from primary research on 17 countries, and supply-side research on 45 or 50 countries, and adding it all up to get the total worldwide.

WWWiz: How many people would you say are on the Web today?

J.G.: I'd say the total number of users of the Web in June of '97 was 38.5 billion worldwide.

WWWiz: And what percent of that is the U.S.?

J.G.: About sixty percent. I'd have to say California is the highest penetration of Net users.

WWWiz: I've heard it may be as high as twenty percent.

J.G.: Yeah, Pac Bell has a NAPS center which are gigabit switches on the backbone of the Net. It's probably about 20% of the gigabits in a day are switched in California.

WWWiz: Do you know what the demographics of the Web look like these days? I know several years ago about thirty percent of Web users were male.

J.G.: The largest number of users is in the home, then you get into medium and large companies, followed by small business, then government and education. A lot of people use it in both places. Also, there are less students than there used to be; it's beginning to approximate the normal population. The number of females is increasing. The average age used to be younger.

WWWiz: In fact, Hotmail thought there might be as many as 100 million email users worldwide.

J.G.: Total email users...that may be. It sounds a little high, but not way high. But whether they're all Internet users, I'm not sure. For instance, Qualcom, Microsoft, Lotus...you can get free Internet mailboxes. A lot of arguments over who's got the most mailboxes.

WWWiz: Who's making money on the Web?

J.G.: On the Web, there are just a couple of retailers you can find like Amazon. The biggest people we find that are making money are those that are building extranets to connect to the suppliers. Making money means they're selling goods over the Internet. It's a lower-cost channel; for example Dell Online is doing about $2,000,000 a day. Cisco also places orders over the Web. It kind of depends on what you mean by "making money." The ones we find justifying the investment in the site tend to be those that are making money by offsetting costs. I know our company has lots of Web sites and is trying every form of compensation from ads, banners, descriptions and it's still in the experimental stage. I don't think anyone is making significant revenues that lead to profits on the Web, unless they're selling goods and services at lower costs. Microsoft's Expedia travel service is almost certainly making profit.

WWWiz: So are people overcoming their fear of using credit cards on the Web?

J.G.: We're pretty sure that the banks are more afraid of that than their customers. When we ask people if they're buying goods and services over the Web, it's something like 20, or depending on their region, can be as high as 35 or 40 percent of the people using the Web who say they're buying goods and services over the Web. And over half of those transactions are actually completed on the Web, as opposed to by fax or telephone. I don't think the customers are nervous about using their credit cards; I think the suppliers are.

WWWiz: What are people using more: virtual cash or personal credit cards?

J.G.: I think the e-cash is trace amounts. The commerce that we pick up is either credit card consumers shopping on the Web, or an account with a company where they bill you. I don't think e-cash is standing in the way of commerce today, but it's not having a very big effect.

WWWiz: What do you think the cable modems will do to the market and the Internet bandwidth?

J.G.: We've looked at the residential market for cable modems and even in the year 2001. Including cable modems, ISDN and all alternative methods are less than 15% of total access so 85% of access will still be though a modem. Modem speeds will still be around 56k. There aren't that many cable companies that are doing this. A lot of them have pulled back. I happen to have it at my house but the supplier is going to a few small communities in our area and you just can't generally get on it. I found that even though I could download MTV at 2 megabits per second there were problems with the server and I would still end up in the kilobit-per-second range and it's very frustrating. I did a bandwidth study and found that five years from now the Internet will still be only about 2% of all traffic on the system versus voice, but five years later it could be as high as half. The switching algorithms will have to be rewritten. The data switches have a much larger peak-to-valley requirement than on voice. The phone companies could be in very big trouble in seven or eight years.

WWWiz: What do you think the Internet will look like in five or ten years, in terms of average usage?

J.G.: In the U.S., we have the household PCs. It may be common to go on the Internet daily, because there are people already doing that who aren't propellerheads. It's a prime source of information regarding travel, events, a great way to communicate with relatives. Thinking about the way it may influence education. This may be a little further out, but kids use the Net now to get information; they aren't using it yet to submit papers, like in middle school or high school. But the school system is getting very savvy about making Net resources available, and I would expect it to become one of the main ways to communicate in education and local government. I fully expect we'll be able to get our driver's licenses or check our accounts, apply for this, apply for that over the Net. I'll give you an example. You remember when the comet was here and those people in the cult killed themselves? We went to go look at the comet, and a couple families were there, and one mom was talking to another mom, and said, "Gee, I've got to check the Web site for this cult." It's already in the general populace, going on the Web site for one reason or another. The Web has gotten into the common parlance, faster than any technology I've ever seen.

WWWiz: What would you see as the biggest roadblock ahead?

J.G.: I would think it would be content, or the programming. You know, is there enough good stuff on the Web? That, to me, is gated not by technology, but by the creative talents of people putting things up on the Web. That would be number one. Number two might be the cost of getting on the Web. You've got to have a computer.

WWWiz: I keep hearing about, or I have over the years, the big shake-up that's coming with providers. Recently I picked up BoardWatch, and I'm seeing more and more providers, and I know some of the people working with us have had some of the biggest names in providers and had days when they couldn't get email, or lost their email, and it seemed like sometimes the little guys are still the best. I was just wondering what your take on that is.

J.G.: Well, I think I agree. I think the economies of scale on access are such that there's not a lot of room to make a lot of money, so I see the bigger guys buying up the little companies, but I don't think the big companies understand customer service. You see a degradation in customer service; however, you'll still have a service provider at the end of the day going belly-up.