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Transcripts From The New Economy Watch Show

Tuesday, June 19, 2001

CNNfn: N.E.W. Show

BRUCE FRANCIS, CNNfn ANCHOR, THE N.E.W. SHOW: Well our next guest has been described as one of the leading Internet visionaries. But if you ask him, he`s likely to tell you that he’s a chief dreamer who helps people see the future of the Internet more clearly.

PATRICIA SABGA, CNNfn ANCHOR, THE N.E.W. SHOW: He is John Patrick, a 30-year veteran of IBM where he is now the vice president of Internet technology. Welcome to the “N.E.W. ECONOMY WATCH.”


SABGA: Now first of all, you`re coming out with a book, so I want to talk a little bit about the book that you`re coming out with, “Net Attitude.”

PATRICK: “Net Attitude.”

SABGA: What does that mean?

PATRICK: Well, we’re at the very beginning of the evolution of the Internet. The number of people actually doing something on the Internet right this very second as a percentage of the world`s population rounds off to about 3 percent. And many of the people who are out there are not so happy with what they’re finding. There’s actually a gap between what they expect and what they’re getting. And the gap is caused by two things: one part is the evolution of the Internet itself. The next generation of the Internet which is well underway, will help close the gap, but a big part of it is attitude, how we think about the Internet and more importantly how businesses, e-businesses, how they think about the Internet and how they relate to the people and meet their expectations.

FRANCIS: Now, what it is your feeling right now, I don’t know how much customer contact that you get over at your job (ph). We have a sense that companies were postponing big Internet projects for quite some time. That suggested that, maybe they weren’t as critical to the future as we all thought they were, just, you know, a few months ago. What’s the feeling now?

PATRICK: Well I think there is a little bit of that but the [INAUDIBLE] of companies are relieved that now they have a little bit of time perhaps to get ready and to prepare the infrastructure. Something we use to think of as kind of an ugly word but which people are realizing is critically important to be able to support the onslaught, remember we’re at the beginning, right? And people now that the Internet, it’s not going to go away. This is not CD radio. This is a really big deal. So we got to get ready. They’re not backing down on that and companies all over the world are preparing to meet the onslaught and to be able to meet the expectations that people have which are growing by the day by the way.

SABGA: OK now you just said expectations are growing by the day, but let’s face it, the Internet is taking quite a – gotten quite a black eye from the dot-com bomb. What do you think is the biggest misconception about the Internet today?

PATRICK: Well the reality is that the dot-com bomb, it’s really a nit. It’s a blip on the radar screen. I mean, there certainly have been a number of companies that failed but those companies that failed really never had a business model in the first place. This is all about real business. It’s about, you know, very simple things like segmenting markets, understanding customers. Setting the right price. Having cost control. Having great distribution and most importantly having great customer service. And the Internet helps do all those things but it’s not going to create it’s own fetishist new way of making money. The basics are still in place. The economy we have is the economy we have.

FRANCIS: Now John, one thing that was disturbing to NorTel when they had their warning last week, is they saw a decline in Internet traffic. Is that an aberration? Is that something we’re just going to look back and say, that was a little – another little blip on the screen or is that a sign of a troubling trend here?

PATRICK: No, I think it’s also a blip on the radar screen. It’s mostly technical but just to give you an example, instant messaging. A few years ago the kids all came home from school when they made a dash for the PC to surf the Web. Now they make a dash for the PC to get on instant messaging and chat with their buddies. The ones they just got off the bus with. And instant messaging is a lot less traffic on the Internet than Web pages are. So there are a little technical things like that. There’s less bits flowing over the Internet, the circus (ph), but it doesn’t mean there is less people or less interest.

FRANCIS: John, we’ve got to go but is that trend going to continue, less traffic before it starts building again or is that it?

PATRICK: No, I think it will build. I think we’ll see it beginning to build now.

FRANCIS: John Patrick, chief dreamer and chief technology officer IBM. Thanks for joining us.