Since the mid-1990s, e-business has been the "next big thing." But definitions of what e-business was and how it would benefit companies were as squishy as Jell-O. In Phase I, companies practiced "brochureware" by building a rudimentary corporate Web site; Phase II featured online transactions and order status. In Phase III, companies say they are beginning not only to tie their basic IT infrastructure into the Internet, but to move more and more of their core business functions to a Web-centric model. CIOs at companies of all sizes, markets and business models are deploying Web-based applications to do everything from increasing revenues and cutting costs to enhancing customer service and improving employee productivity. Of course, it hasn't been easy: The vast majority of the more than 500 CIOs we surveyed indicated that e-business has made information security a bigger challenge, increased overall IT complexity and forced companies to collaborate among departments and business units far more than had been the norm. But the promise of e-business appears on its way to being realized, as many CIOs report their companies have hiked sales and reduced costs thanks to their e-business initiatives, resulting in better competitive positions and enhanced shareholder value.