E-commerce essentials 1. What is e-commerce? 2. How is e-commerce different from traditional commerce? 3.

What are the driving forces behind e-commerce? 4. What are the key technology concepts behind the Internet? 5. What are the key e-commerce questions for management?

WHAT IS E-COMMERCE? 1.1 Terminology E-commerce E-business E-markets Internet business Teleshopping EFT (70s) EDI (80s) e-shopping e-commerce I (95-00) ecommerce II (01-06) 1.2 Definition (Figure 1.1) The use of the Internet and the Web to conduct commercial transactions that involve an exchange of value across organizational or individual boundaries in return for products and services vs the use of the Internet and the Web to conduct business activities 1.3 Types (Table 1.2) 1. Relationship-based (Rayport and Jaworksi, 2001) Business originating from Business Consumers
B2B Purchasing & Procurement Supplier Management Inventory Management B2C Sales Consumer search FAQs Service & support C2B Demand aggregator Cause-related advocacy group

C2C Auction Classified ads Games Jobs

2. Technology-based

 P2P M-commerce

E-COMMERCE vs TRADITIONAL COMMERCE 2.1 7 features of e-commerce technology (Table 1.1) 1. Ubiquity 2. Global reach 3. Universal standards 4. Richness 5. Interactivity 6. Information density 7. Personalization e-commerce vs traditional commerce
Key elements Technology Competitive edge Accessibility Customer interface Customer interaction Customization Product promotion Product characteristic E-commerce Enabler Speed 24 x 7 Screen-to-face Self-service One-to-one customization Word of mouth Commodity Traditional commerce Facilitator Differentiation Limited time Face-to-face Seller influenced Mass customization Merchandising & personal selling Perishables, feel and touch

2.2 E-Commerce I vs E-Commerce II (Table 1.5) DRIVING FORCES 3.1 Economics 1. Lowering of costs 2. Increasing competition 3. Increasing consumer power: demand for speed, convenience, instant satisfaction, ....

3.2 Technology 1. Growth of the Internet (INTERconnected NETworks) 2. Emergence of the WWW 3. Ongoing advancement of IT Internet II & Next Generation Internet Projects GigaPOP, IPv6 Photonics (Table 3.5) Wireless web Internet telephony Digital libraries Distributed storage Distance learning Digital video Video teleconferencing Tele-immersion M-commerce 3.2.1 Internet
3.2.1.1 History of the Internet (Figure 3.2) ARPANET (1969-1990) the U.S. Defense Departments Advanced Research Projects Agency (ARPA) network for data sharing NSFNET (1986-1995) the National Science Foundations (NSF) national network for university communications Internet (1990) (Figure 3.3) Business use of the Internet promotes the development of World Wide Web

KEY TECHNOLOGY CONCEPTS OF THE INTERNET 1. Packet switching (Figure 3.4) 2. TCP/IP (Figure 3.5) 3. Client/Server computing (Figure 3.7) 4.1 Internet architecture
Level End user Local access providers Internet access providers Network access providers Backbone Example You and me Verizon, InsightCommunication AOL, MSN, CompuServe (Table 3.3) MCI, Sprint, AT&T (Table 3.2) Fiber optics, routers, switches

Internet connection options 1. Dial-up 2. Digital Subscriber Line (DSL) 3. Integrated Services Digital Network (ISDN) 4. Cable 5. T1 6. T3 7. Wireless 4.2 Internet protocol a set of rules for formatting, ordering, and error-checking data sent across a network TCP/IP (Transmission control protocol/Internet protocol) (Figure 3.6)
Layer Application Transport Internet/Network Network Interface/Link Specific Protocol HTTP, SMTP, FTP TCP IP, Routing PPP (Point-to-Point IP), SLIP (Serial-Line IP)

TCP controls the assembly and reassembly of packets as they are transmitted over the Internet IP handles the addressing details of each packet (IP address/URL) IP address: 32-bit numeric address in dotted quad addressing format Universal Resource Locator: hhhh://www.xxx.yyy where hhhh: how to access a resource, e.g., http, ftp, telnet www: name of a specific computer xxx: subdomain yyy: top-level domain Application Layer Protocols: HTTP (hyper text transfer protocol): transfers and displays Web pages SMTP (simple mail transfer protocol): requests mail delivery from a mail server, specifies the exact format of a mail message and how it should be administered POP (post office protocol): retrieves and/or deletes e-mails from a mail server, provides support for multipurpose Internet mail extensions (MIME) which allows attachments of binary files to e-mails IMAP (interactive mail access protocol): downloads, filters, organizes, deletes emails FTP (file transfer protocol): transfers files between TCP/IP-connected computers

4.3 World wide web A client/server system and a set of standards (markup languages) for storing, retrieving, formatting, and displaying information in a networked environment using graphical user interfaces and dynamic links to documents.

Global hypertext publishing Universal readership

Web technology Client ware Browser, viewer, player, client computing Server ware Web server, scripting, page construction, image manipulation, transaction protection Network ware Router, gateway, hub, firewall, leased lines Middle ware Database, data warehouse 4.3.1 Web server
Web server Apache: a patchy system IIS (Internet Information Server) NES (Netscape Enterprise Server) Originator NCSA (National Center for Super Computing Applications), 1994 Microsoft Netscape

Web server functionalities HTTP services Security & authentication (SSL protocol) FTP services Searching (search engine vs intelligent agent) Search engine comparison Data analysis (access log analysis) WebTrends log analyser Site management (authoring, publishing, link checking) NetMechanics site management tool Application construction (HTML, CGI, API) Content management (ODBC, ASP) Site development

4.3.2 WWW standards: markup languages SGML (Standard generalized markup language): a meta language used for defining other markup languages to describe and format electronic documents that are independent of software applications, devices, and machines. HTML (Hyper text markup language): a document production language that uses a set of tags to define the format and style (headings, title bars, bullets, lines, ordered lists, graphics, tables, frames, ) of a document, i.e., how a page is displayed on the web. XML (extensible Markup Language): a document definition language that uses paired start and stop tags to define the structure of the data to be displayed

KEY QUESTIONS FOR MANAGEMENT Is your business right for e-commerce? Business Plans (Table 2.1) 1. Why will customers buy from you? 2. How will you make money? 3. What is your market niche? 4. Who are your competitors? 5. What is your competitive advantage? 6. How do you promote your products or services? 7. What types of organizational structures are necessary? 8. What kinds of managerial experiences and background are necessary? B2C business models (Table 2.3) 1. Portal 2. E-tailer 3. Content Provider 4. Transaction broker 5. Market creator 6. Service provider 7. Community provider