New Venture Fund to Propel XML

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Event Summary

David Poole, founder and former CEO of DataChannel, announced the creation of XMLFund, a venture fund specializing in startup companies that will advance XML technology and applications. DataChannel uses XML to create Enterprise Information Portals, to serve information on Intranets, Extranets or the Internet.

Market Impact

XML is a language for identifying parts of a document by name. XML facilitates publishing documents to different media, embedding search terms in a document, and all forms of business to business commerce on the Internet. It promises to be the way that different systems can communicate, and is the basis for a number of proposed standards, including those from Microsoft, Commerce One and Ariba (See TEC's News Analysis article: "Ariba Successes Highlight Standards Wars" August, 1999). While the focus of many backroom projects, XML has not much serious support at present. This new fund will have a strong positive multiplier effect on XML development.

Poole told TEC that he expects XML to penetrate the Internet in two waves. The first changes will occur within companies, as they prepare their internal systems and technology tools to communicate using XML. Poole sees that within two years the industry will be ready for the second wave, during which business transactions over the Internet will become as ubiquitous as deals made over the telephone are today.

Noting that there are conflicts between different vendors and standards agencies (See TEC's News Analysis article: "Ariba Successes Highlight Standards Wars" August, 1999) Poole noted that while perceived leadership in these areas is important for market positioning, the issue is one of vocabularies rather than of basic technologies. "It would be great if we could agree on a single vocabulary," he said, "but that will never happen. Instead we have XSL [Extensible Stylesheet Language] to translate between vocabularies.

User Recommendations

We predict (90%) that within three years XML will be in use or on the agenda of every company involved with Internet technology. Converting existing business processes to the point where they can generate XML-based transactions to integrate with other companies' systems will be a task that in some organizations will rival Y2K remediation for the way it touches every aspect of the business. However, only companies like publishers whose main business is their documents will need to introduce XML in the accelerated time-pressures of their Y2K work.

Although the forces that will cause a massive move to a document interchange standard like XML exist at present, the tools are not available and the pressure is not yet primarily market-driven. Market pressures will come from the need to implement other technologies such as business-to-business E-commerce, and from the competitive savings that can result from standardizing on a single base representation language for all of a company's documents. Both of these will be accelerated by Poole's initiative.

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