Businesses Find Security in Internet-Based Software

Software is less likely to be disrupted when it lives on a server.
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Add this to your list of heroes who have emerged from the attacks of Sept. 11: the Internet.

Sure, it doesn't have the short-cropped selflessness of a New York City firefighter or the quiet fortitude of Rudy Giuliani. But when it came down to it, like them, the Internet did its job in a crisis. Lots of phone calls didn't go through that day, but the emails and the instant messages did, sometimes as the only means of communication.

Which is why some technology observers are now starting to talk about the Internet and Internet-based software taking on an even more prominent role for businesses in the years to come.

Now, as businesses reconsider how they create, store and back up their data, some see a catalyst for spending that could give the economy -- or at least software firms -- a boost.

"All of a sudden, for reasons no one anticipated, we're getting an interest in upgraded and re-architected information systems to keep businesses from being vulnerable," says Joshua Greenbaum, a technology consultant and principal at Enterprise Applications Consulting in Daly City, Calif.

That means computer systems that run over the Internet, and don't live on the hard drive of the personal computer -- known as "the client" in tech speak -- that you use at work each day. Of course, Internet-based computing has been a hot topic for software companies for some time, with firms like

PeopleSoft

(PSFT)

,

Oracle

(ORCL) - Get Report

and

SAP

(SAP) - Get Report

trying to outdo one another with the "thin-client" characteristics of their software.

Internet-based software, instead of residing on your PC, is actually distributed -- or "served" -- over the Internet, or some other internal network, before coming to your computer. All you need to make it work at your desk is an Internet browser.

That includes software like "corporate portals," starting points that some big businesses are beginning to put in place for their employees. Like the MyYahoo! feature of the popular search engine, corporate portals allow employees to customize a home page to help them do their jobs more easily, and even access company-wide software programs that don't have to be installed on the computers at their desks. From a technology perspective, those systems are easier to maintain because you can make changes once that are then reflected at the computer of each user.

Until now, though, corporations' adoption of such software was mixed -- some were doing it aggressively, others not as quickly.

Now, with many companies thinking seriously for the first time about the possible physical destruction of their facilities, software that relies more on the Internet to do work, and less on the computers that are connected to it, could be more important than ever, according to Greenbaum.

"There's an optimistic view that we'll see a Y2K-like impact when companies turn around and ask, 'How can I make sure I'm not vulnerable?' " Greenbaum says. "What they'll eventually come to realize is that all that data sitting on clients in the World Trade Center is gone, and whatever was on servers has been saved."

Of course, many firms reported remarkably small losses in terms of information and data in the wake of the terrorist attacks, largely due to the back-up systems they put in place after the WTC was attacked in 1993.

Jon Ekoniak, a software analyst at U.S. Bancorp Piper Jaffray, says Internet-based software could become increasingly attractive in the wake of the attacks, if only for the fact that it would allow businesses to get up and running quickly after a catastrophe. But he doubts if a Y2K-like spending spree is around the corner.

"That's probably a little too much," Ekoniak says. "Y2K had to be done -- you had to prepare because there was a definitive date. This is different. There's those that may already have these systems in place where they feel they are comfortable with it, and others might go ahead and say, 'Hey, we're probably not vulnerable.' There's no impending date forcing people to act."

But other observers think the immediate interest will be in the backup and security of data so that it can be recovered, not building entire new systems over the Internet.

"A little bit of that

curiosity about backup systems has always been piqued when someone lost their laptop," says Ben Smith, a consultant at A.T. Kearney. "When you have an entire building of 70,000 people lose their laptops overnight, that sends a pretty quick message, and we'll see more interest there."

And there are other problems. Before businesses are going to trust the process of creating and storing data on the Internet, they'll want to make sure the Internet is secure. So far, it has been proven woefully deficient.

"It turned out to be the most reliable form of communications and infrastructure, because it is a network," says Bill Conner, president and CEO of

Entrust

(ENTU)

, an Internet security software firm based in Dallas. "Now I think the next challenge is to take that high performance and up the security requirements."

Even before those capabilities are in place, the events of Sept. 11 -- and how companies can protect themselves against similar attacks -- are still topic No. 1 when executives get together.

"You can't have a customer meeting today without talking about what happened at the World Trade Center," says Rick Bergquist, chief technology officer at PeopleSoft. "No one can run a big company today without having a backup on it. But I think what's different now is people are realizing the less

code they put into each device, the quicker you can recover."

Of course, recovery -- in all the meanings of that word -- is what business in the U.S. is all about in the fall of 2001.