Electronic Commerce Semester 1 Term 1 Lecture 6

Predicting the Future of the IAP Market In the future, four organisational and technology trends will drive the growth and consolidation of the IAP industry: –the trend toward virtual organisations –the trend toward higher performance networking - combining data, voice and video –the trend toward integration of local and wide- area networks –the trend toward universal online access

Future of the ISP Industry The service provider industry of the future will feature a few strong players who can address the following needs: –Convergence leading to competition –Service and capacity management –Customer service, loyalty and retention –Marketing –Customer education –Changing technology behind Internet Access

Convergence Leading to Competition Leading communications carriers have noticed the increasing numbers of Internet users Despite the lower profile of some companies in providing consumer Internet access, the market is too big for them to ignore

Service and capacity management Capacity management is an issue that warrants the immediate attention of access providers Corporate customers, whom various access providers are attempting to attract, will not put up with unreliability as individual consumers Clearly online service providers need to strengthen network access for a rapidly growing member base

Customer service, loyalty and retention Many Internet access providers pay too little attention to customer service Initial experience has indicated that while subscriber growth is increasing among various IAPs, customer retention is poor The reasons for this are: the difficulty in finding information on the Internet, the lack of useful information, and system problems such as poorly developed websites or lack of access to websites

Marketing Given the media focus on the Internet, it is not surprising that existing Internet access providers are using this attention to entice curious consumers However, this is a short term phenomenon, and rather than touting the generic benefits of surfing the Internet, access providers must specifically address how the Internet can solve existing business problems and respond to consumer needs

Customer education The principal methods of competition in the online industry are price, content, ease of use, and computer service In addition, IAPs need to address consumer concerns in a number of areas including: –Learning curve –Complexity –Security –Speed & reliability

Changing technology behind Internet Access In order to access the Internet via a dial-up connection, the user requires a modem attached to his or her computer A phone call is made via the modem to the nearest Point of Presence (POP) provided by the selected access provider Once connection is made between the user’s modem and one of the modems of the POP, the user’s internet software initiates a log-on, which allows a full connection to the Internet

Network Bandwidth & Internet Access Speed, simplicity and economy are key to the evolution and adoption of the Internet Online users are increasingly impatient with delays and roadblocks to access, especially since they are accustomed to quick response times on their television networks The network response time depends on bandwidth, which is the speed at which information can be sent or received