"In the beginning of business competition, it's my technology versus yours," says Bill Davidow. "The next place is my costs versus your costs. The competition then moves to quality.

"The era of competition over the next few years will be my service versus yours -- that's where the next battleground is."

Davidow, who successfully ran Intel Corp.'s sales and marketing efforts before leaping into venture capital, insists that technology companies are evolving into service companies -- and the ones that don't will not be around for long.

"What we're going to demonstrate shortly is the tremendous value of service to the customer," says Davidow, who defines service as "any acts or information that increases the value of the product to the customer."

"A recent Dataquest survey of semiconductor companies and customers revealed that manufacturers' main concerns were custom chips, forecasting demand and lead times for production ; it turns out that the buyers' main concerns were reliability of service, reducing the number of their suppliers and reliable delivery," he says.

In effect, manufacturers are more concerned with managing capacity than managing the service their customers desire. That has to change, Davidow says.

As a venture capitalist funding new companies, Davidow is amazed that "almost never is the service nature of the enterprise outlined" in the business plans he receives.

"The most surprising thing is the narrowness of perspective on what makes a business," he notes sadly. "Business is multidimensional but most of these plans are only one- or two-dimensional."