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. Last Updated: 07/27/2016

Who Will Ride to Profit On Russia's Net Wave?

Wherever California takes the computer industry, Russia will eventually follow. But though plenty of people expect the Internet tidal-wave to hit this country, it is still unclear who in the local computer business is going to benefit most.

One way or another, someone will be making money from providing physical connections to Internet users. Be it over telephone lines, through ISDN, or via even faster connections, users in Russia will need data connections to the outside world. For the moment, while local calls are still free in Moscow (and parts of St. Petersburg), this service is being provided by Internet access providers. Demos, Relcom, Glasnet, Redline and Sovam Teleport and a plethora of other companies will provide you with a TCI/IP (Internet protocol) connection and bill you for your time on line.

But most of these firms do not control the telecommunications infrastructure they use. They rent capacity from larger, usually international, companies. Once the Internet becomes a big business, the likes of Rostelecom, British Telecom and AT&T are very likely to step into this market and offer the cheapest prices.

There will naturally be a demand for Internet skills. Companies will want to link their various offices together, open parts of their corporate networks up to the public, and build internal company Intranets. But it is not clear yet who will be doing this work -- will it be today's suppliers of computer systems? Will it be the current Internet service providers looking for other ways to add value to their businesses? Will it be a new breed of Internet service companies that neither sell hardware nor hook you up to the Internet, but help you design your own Internet systems and help you shop around for the best value Internet server hardware and Internet connections?

Right now there are many manufacturers building businesses around "Internet servers," and perhaps their Russian partners stand to gain. Silicon Graphics, SUN Microsystems, IBM, Apple, Hewlett-Packard, Digital and several others have products that enable you to set up a Web server in hours. But this business may vanish if, within a year or two, even standard desktop PCs can be configured as capable Web servers.

Another possibility is that much of the difficulty and mystery connected with establishing Web servers and building in-company Intranets will be removed as companies like Microsoft, Netscape and Novell release "shrink wrapped" Internet solutions that are relatively easy to set up and install. It was once the case that setting up a network operating system was something of a "dark art." Today installing a simple Local Area Network can be as easy as loading a CD and sipping coffee while the network automatically configures itself. If this development takes place, then it is likely that many Russian companies will start to do much of their Internet development work themselves. In this case, the big winners are likely to be the companies training end-users to install and to use these new Internet tools themselves.

The other possibility is that the eventual winners in the growth of the Internet will not be those providing hardware and software, but those providing content. Publishing magazines across the whole of Russia is a massive logistical and distribution undertaking. Internet magazines could potentially reach audiences to whom it is too expensive or impractical to send traditional paper publications. I'm sure the possibility of reaching such a potentially large audience already has advertising agencies licking their lips in anticipation.

Robert Farish is the editor of Computer Business Russia fax: 929-9958; e-mail: