Electronic Commerce and the Internet Chapter 6

Chapter Objectives Describe what the Internet is and how it works Explain packet-switching and TCP/IP Describe basic Internet services and the World Wide Web Explain the differences between –Internet-based electronic commerce –Intranet-based electronic commerce –Extranet-based electronic commerce

The Internet A worldwide network of networks Not owned by a single person, organization, or country Internet Society (ISOC): All About The InternetInternet Society (ISOC): All About The Internet A Brief History of the Internet

Growth in Internet Servers

34.5a

34.5b

12 Most Wired Countries Source:

Source:

Source:

Source: September 1971

Source: ARPANET, October 1980

Source: Circa 1989

What You Will Find on the Internet Information –Text, video, audio, graphics –Databases, technical services, software People –Electronic mail –Newsgroups

How Does the Internet Work? Packet-Switching Technology Connecting Independent Networks TCP/IP

Packet-Switching Technology Data sent in small standard sized chunks called “packets” Packets have headers with addresses of sending and receiving computers Users take turns sending packets Packets reassembled by the receiver

Packet Switching

Connecting Independent Networks Router: fundamental building block of the Internet –Has a processor, memory, and network interface –Has no software –Connects LANs to backbone WANs –Forwards packets from one network to another –Determines best routes for packets to travel

TCP/IP Transmission Control Protocol –Breaks information into data packets –Reassembles packets when received –Checks for lost packets Internet Protocol –Each computer given a unique IP address –User name and IP address separated

Routers Enable Different Paths between Networks

Technologies Enabling Internet Communication ISDN (Integrated Services Digital Network) –International standard for digital data communications –Uses existing twisted pair cable T1 Service –Leased lines from long-distance carriers ATM (Asynchronous Transfer Mode) –Method of transmitting voice, video, and data over high speed LANs

Services on the Internet –BBC News | DOT LIFE | birthday to youBBC News | DOT LIFE | birthday to you –Los Angeles Times: Capability Changes Lives of Sailors Far AwayLos Angeles Times: Capability Changes Lives of Sailors Far Away –The Core Rules of NetiquetteThe Core Rules of Netiquette

Other Services on the Internet Telnet File Transfer Protocol (FTP) Listserv Usenet Archie WAIS Gopher

The World Wide Web The most powerful Internet tool Accessed via a Browser –A simple user-friendly interface

Web pages –Identified by a URL (Uniform Resource Locator) –Created with Hypertext Markup Language Dave Raggett's Introduction to HTML The Bare Bones Guide to HTML

Source: NetcraftNetcraft Total Number of Web Servers as of 8/00 Other MicrosoftiPlanetApache 10M - 20M -

eBusiness: Electronic Business Dell Computers lets customers configure their own PCs online and track assembly and shipping status. Trucking companies will tap directly into ordering system for earlier visibility on shipping schedules. Retailers & manufacturers will monitor inventory databases instead of placing orders through sales.

eBusiness Pfizer, Inc. sends electronic version of drug applications to FDA: approval timetable ~ one year  6 months. Intel, Inc.: 200 sales clerks from order entry to data analysis & customer relations. Cisco Systems: 75% sales are online; 45% of the orders never touch an employee's hands. Ford: international collaboration on the Web ~ “design chain management.“

Electronic Commerce The on-line exchange of goods, services, and money It has no geographical or time limitations EDI available for over a decade Internet based transactions overtaking EDI

XML: A Simple Example Acme Pharmaceuticals Co Smokey Boulevard Smallville Indiana Source: Short Overview of W3C, XML, and RDF - slide "XML: A Simple Example"Short Overview of W3C, XML, and RDF - slide "XML: A Simple Example"

A Model of Electronic Commerce Information Gathering OrderingPayment A Model of Electronic Commerce Fulfillment Service and Support

Three Modes of Electronic Commerce IndividualBusiness IntranetInternetExtranet Business

Exploiting Internet-based Electronic Commerce New rules of electronic commerce –Web site must be aesthetically pleasing –Web site must be easy to use and fast –Web site must motivate people to visit, stay, and return –Advertise your presence on the Web –Learn from your Web site

Intranets as First Step into Electronic Commerce Using the Internet for internal operations Unwanted users blocked from entry Reasons for popularity –Provides inexpensive, quick, international telecommunications infrastructure –Improves product/service quality and decreases costs and cycle time –Is a wise intermediate step in preparing for full electronic commerce

From EDI to Internet-based Extranets Using the Internet to support dealings with other firms Trend toward Extranets rather than EDI

Supply Chains “… one of the most loudly trumpeted keys to eBusiness success”, and “eBusiness is perhaps the most sweeping transformation of the corporate landscape in decades.” --Business Week Supply chains  Supply web

ManufacturerWarehousesRetailersSuppliersConsumers SUPPLY “CHAINS”

Information Goods: Goods and services that can be totally digitized: migrating from atoms to bits. Internet services sport scores books data bases magazines movies music stock quotes financial services Web pages technical publishing (legal, engineering) travel services online education

ProductsServices Material Information Steel, Cement Automotive Consumer Goods Office Eqpt Books, Magazines Newspapers Music CD’s Videos Restaurants Retailing Construction On-line Data Television Education Consulting [from U. Karmarkar, 2000]

Information Goods Costly to produce but cheap to reproduce. They do not need to be inventoried. Once the first copy has been produced, most costs are “sunk” and cannot be recovered. Multiple copies can be produced at roughly the constant per unit cost. There are no capacity limits for additional “copies.”