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Technology - The state of business online

12 December 2006

With online sales increasing, why are only a minority of UK companies capitalising on the potential of the Internet? Insider Essential Guides spoke to Lawrence Jones of ISP UKFast to find out.

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Although UK Internet sales rose to £103bn in 2005, the vast majority of UK businesses are missing out on this revenue. An e-commerce survey of businesses conducted by the Office for National Statistics found that while 56 per cent of businesses bought online, less than 15 per cent of them sold on the Internet.

Lawrence Jones, managing director of Manchester-based Internet service provider UKFast, says: "As a business Internet host we see the web statistics for some of the most competitive e-commerce websites on the Internet. It still astonishes me that so many UK companies are failing to maximise their web potential. Every company now needs to place its online presence closer to the heart of its business.

Still only 70 per cent of businesses have a website, meaning that a mere 10 per cent of all businesses are drawing revenue direct from the net. And as Jones points out, the playing field is not exactly level. "What you'll find is that 2 per cent are making 75 per cent of the online cash. It's a clear message that there's space for more competition," he says.

This is backed up with the National Statistics research which suggests that companies with more than 1,000 employees are walking away with almost 50p in every online pound. However, according to Jones, the signs are improving, especially for smaller businesses. "In the first six months of 2006, UKFast sold more dedicated servers to the small business market than in the last four years put together. When a business commits to dedicated hosting it's a sure sign that they are getting serious about the net," he says.

"It'll be a long time before small and medium-sized companies are making as much money online as the big fish, but collectively, the sector is really starting to make its mark."

Key Facts

• UK businesses made £103.3bn online in 2005

• 70 per cent of companies in the UK now have an online presence

• 14.6 per cent of businesses sold online in 2005

• 56 per cent of businesses bought online in 2005

• Businesses in retail, wholesale, travel and catering sectors are making approximately £47 in every £100 spent online

• Companies with more than 1,000 employees are making £48 in every £100 spent online

• Businesses with between 50 and 249 employees saw the highest rate of increase in Internet sales, equating to a boost of 151 per cent in 2005.

Source - UKFast

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