Nearly 2.8 Million Small Businesses to Test eCommerce Waters by 2003, IDC Says

FRAMINGHAM, MA – May 31, 2000 – eCommerce is being embraced as a legitimate way for U.S. small business to expand and prosper. According to new research from IDC, the number of U.S. small businesses engaged in ecommerce will increase from 400,000 in 1998 to almost 2.8 million in 2003. Small businesses that recognized ecommerce potential and have made the necessary infrastructure investments are well positioned to succeed, while those who are resistant to change face a formidable challenge.

Overall, most small businesses have annual revenues less than $5 million; however, IDC found that average annual revenues of companies that regard the Internet as important are significantly higher than those that rated it less important. "The Internet is a key component to success for small businesses," said Merle Sandler, senior analyst for IDC's Small Business program. "Consumers have been the focus of small business ecommerce activity, but we are seeing a shift toward business-to-business ecommerce in small businesses of all sizes."

Key Findings

· Of 7.5 million small businesses, 11% were engaged in ecommerce activity in 1999.

· Only one-third of Internet-enabled small businesses have a home page, but intentions are high.

· Small businesses profiting from the Internet are more involved in business and other services, manufacturing, and real estate that their non-ecommerce– enabled counterparts.

· Small businesses that regard Internet-related revenue as important tend to have been in business for a shorter period of time than other small businesses.

· Under 20% of small businesses are selling online (taking orders over the Internet or by phone or fax).

IDC's bulletin, Generating Revenue Through the Internet: Small Businesses Today, Next Year, and Two Years Out (IDC #B22139), provides quantitative data derived from IDC's 1999 Small Business Survey – a total of 1,043 small businesses were surveyed by mail after a telephone screening. For more information or to order a copy of the bulletin, please contact Patrick Steeves at 508-988-6787 or psteeves@idc.com.

About IDC

IDC delivers dependable, high-impact insights and advice on the future of ebusiness, the Internet, and technology to help organizations make sound business decisions. IDC forecasts worldwide markets and trends and analyzes business strategies, technologies, and vendors, using a combination of rigorous primary research and in-depth competitive analysis. IDC provides global research with local content through more than 500 analysts in 43 countries worldwide. IDC's customers comprise the world's leading IT suppliers, IT organizations, ebusiness companies, and the financial community. Additional information can be found at http://www.idc.com.

IDC is a division of IDG, the world's leading IT media, research and exposition company.

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