Online Small Businesses Top 5 Million, but eCommerce Growth Modest Despite New Generation of Internet Tools, IDC Says

FRAMINGHAM, MA – JULY 24, 2001 – Almost three-quarters of small businesses with PCs are now on the Internet, says market intelligence firm IDC. This is up from about two-thirds just a year ago. Small businesses are also moving quickly to establish their own home pages, with two million small firms maintaining their own Web sites. When it comes to ecommerce, though, small business actions have not lived up to their expectations. At the end of 2000 only 725,000 small firms were actively selling online, even though a far greater number had planned to do so.


U.S. Small Business Internet, Home Page, and eCommerce Use

Thousands 1998 1999 2000 Annual Growth

On Internet 3,863 4,290 5,010 13.7%

With Home Page 1,169 1,565 2,092 33.8%

eCommerce 400 540 725 34.6%

Source: IDC, 2001

It has never been easier for small businesses to get up and running on the Internet. According to a new IDC report, Internet Services to Small Businesses: Profiles of Portals, Aggreportals, Destinations, over 50 major companies are providing resources to help small businesses establish a Web presence, implement ecommerce, or gain access to advanced services. A wide range of tools are available for both the “do it yourself” and the “do it for me” small business interested in doing more on the Internet.

Despite these resources, small businesses continue to sit on the sidelines when it comes to ecommerce.

"Inertia is a key factor," says Raymond Boggs, IDC’s vice president for Small Business/Home Office research. "Although many small firms say they are going to implement ecommerce and begin selling online, it still requires more of an effort than simply setting up a home page." IDC notes other factors that are keeping some small businesses from stepping up to ecommerce including:

· Nothing to sell – Although many small businesses are retailers, an even larger number are service providers that may not be in a position to sell anything online. (Of course, the Internet can be helpful in scheduling customers for service).

· Internal challenges – Work flow issues, such as how incoming orders are handled, must be addressed before online selling can be effectively integrated into operations. Getting operations logically organized may be seen as the biggest chore in moving to ecommerce.

· External challenges – Working with banks to establish merchant accounts and coordinating with other financial institutions can also be seen as a lot of work even though comprehensive solutions are available to take care of this.

For more information on IDC’s report (#B24712) Internet Services to Small Businesses: Profiles of Portals, Aggreportals, Destinations, contact IDC’s PR hotline at 508-988-7988.

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 700 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

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


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