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By Sally Watson, 14 October 1999 00:25

NEWS Microsoft chairman and CEO, Bill Gates, was in London this week to call on Britain's business leaders to see ecommerce as an opportunity, not a threat. Gates warned 300 of the UK's top executives that ecommerce will supersede traditional commerce, and established businesses will face tough competition in the digital marketplace. "New start-ups are doing the leadership work. Despite losing money they are receiving very high valuations - which allows them to market and advertise," he said. Gates believes companies must embrace 'stage three' of the Internet and provide users with customised products, personalisation and value-added service. He said 'stage one' of the Web - where sites only displayed information - and 'stage two' - where they allowed simple transactions - are no longer good enough. "Companies should be re-thinking distribution models and the flow of information within the company. Technology is not the stumbling block - you can create a Web site with off-the-shelf software - the key problem is business strategy. You need to change the way you do things inside the company." Gates said he expected to see many more mobile devices connected to the Internet, but said third-generation wireless will not deliver "the same kinds of bandwidth that BT will be able to deliver with DSL" and warned that US wireless networks have been oversold, degrading the quality for the user. Henry Harrison, senior consultant for telecoms analyst, Schema, agreed: "He's absolutely correct. The top speed of third-generation will not be as good as DSL." But Harrison added: "Whatever Gates says, consumers aren't bothered about bandwidth. They want services and applications, and companies should look at delivering them at lower bandwidths." Robin Bloor, CEO of Bloor Research, said Gates' comments were sensible but might not have the intended impact on his business audience: "It's easy to talk about ebusiness, but it's not so easy to transform a company. The thing that will give CEOs the wake-up call is not Bill Gates evangelising - it will be when they see their competitive position deteriorate."