1. If the auto industry had keep with technology
like the computer industry...
...we would all be driving $25 cars that
get 1000 miles per gallon.

2. This is true, but…
- Your car would crash twice a day
- Every time a road is repair, you would have
to buy a new car
- The airbag systems would say, “Are you
sure?” before going off
- When your car died on the freeway for no
reason, you would just accept this, restart,
and drive on

3. History of the Internet
1956
- USSR launches Sputnik (Earth satellite)
- US forms Advance Research Project Agency
1969
- ARPANET commissioned by DOD for research in networking
1971
- 15 nodes (23 hosts) UCLA, SRI, UCSB, U of Utah, BBN, MIT, SDC RAND, Harvard, Lincoln Lab, Stanford, UIU, CWRU, CMU, NASA
1973
- First international connections for ARPANET: England & Norway.
- Bob Metcalfe's Ph.D. dissertation at Harvard: Ethernet
1977
- Electronic Mail to over 100 researchers
1981
- BITNET: electronic mail & listserv servers
1982
- Transmission Control Protocol (TCP) and Internet Protocol (IP) established.

4. History of the Internet (continuation)
1983
- ARPANET split into ARPANET and MILNET.
- Berkeley Unix + TCP/IP for desktop stations. Hosts: 1,000
1986
- NSFNET created (backbone 56 Kbps)
1987
- NSF agreed to manage the backbone with Merit, IBM and MCI
- No. of hosts breaks 10,000
1989
- NSFNET upgraded to Mbps
- Creation of pan-European IP network. Hosts: 100,000
- Tim Berners-Lee paper “Hyper Text and CERN”
1990
- ARPANET ceases to exist
- Initial World-Wide-Web program on NeXT
1991
- Gopher released by University of Minnesota
- WAIS released by Thinking Machines Corporation

5. History of the Internet (continuation)
1992
- NSFNET upgraded to Mbps
- NSF relaxes the “Acceptable Use Policy”. Hosts: 1 million
1993
- White House, United Nations and World Bank come On-Line
- Business and media take notice of the Internet
- MOSAIC is released in Illinois (Mark Andreessen at NCSA)
- Annual growth of traffic was 341,634%
1994
- US Senate and House provide information servers
- Shopping malls arrived on the Internet
- Mass marketing find its way to the Internet
- Andreessen & colleagues form Mosaic Communications Corp. (now Netscape)
1995
- The Web main theme at the European Parliament
- Sun Microsystems launched JAVA

9. Bandwidth Type of Circuit Speed/KBPS Time/Meg. Telephone 14.4 9.3 min
ISDN min
DirectPC min
T , sec
Cable TV Modem , sec
ASDL 6, sec
Adv. Cable TV Mod. 40, sec
T , sec
Optical fiber 80, sec

10. Growth of Internet Users
U.S. Online Population Forecast by Researcher
200
150
100 50
CommerceNet/Nielsen
Cyber Dialogue (Aggressive)
Cyber Dialogue (Conservative)
International Data Corp.
Jupiter/NFO
Population
(Millions)

13. Why the Optimism? - Continuing rapid growth of the Web
- Business are rapidly deploying intranets/extranets
and moving toward browsers as universal frontends

14. Electronic Commerce E-Commerce is any electronic process supporting
one or more elements of the value chain.
The goal is to generate revenues through enhanced
sales, reduced costs, or improved communications.

15. Internet Value Chain: Customer Relations
Capability
Benefits to
Company
Opportunities
for
Advantage
Marketing and Sales and Support and
Product Research Distribution Customer Feedback
Data for market Research new Access to customer
research customers comments on-line
Establishes Low cost More staff in contact
consumer response distribution with the customer
to new products method
Environmental Multiple contact Immediate response
Scanning points at no to customer problems
incremental cost
Incremental market Lower cost Enhanced customer
share margins satisfaction
Source: Cronin 1994

16. The Customer Continuum
CUSTOMER NEEDS INTERNET RESOURCES
company material home page
new products, announcements MARKETING gopher server
specific information newsgroups
direct
product description commercial platforms
ordering options SALES privacy enhancements
remittance on-line electronic catalogs
individual problem resolution help desk
changes & updates SUPPORT fixes & updates
general product support user discussion groups
Source: Cronin 1994

17. LOW TOUCH PRODUCTS WINS US online transactions in 2000, ($bn)
Computer h/s
Travel
Financial brokerages
Collectibles
Music/video
Books
Clothes/sporting
Flowers/cards/gifts
Department store
Event tickets
Consumer electronics
Automotive
Home/garden
Toys
Food/wine
Source: Boston Consulting Group

18. Internet Value Chain: Inputs from Suppliers
Capability
Benefits to
Company
Opportunities
for
Advantage
Pricing and Delivery/Order/Tracking Product
Ordering On-line Inventory Support
Easy, efficient Faster turnaround Direct access to
access expertise
Information Improved Interactive
constantly updated planning
Not locked in to Less inventory Faster problem
proprietary system stockpiled resolution
Lower cost of Faster, more flexible Improved reliability
obtaining materials delivery and performance
Source: Cronin 1994

19. B2B E-Commerce Projections
1,200
1,000
800
600
400
200
$ Billions
1999
2003
U.S.
World
Source: IDC

20. Internet Value Chain: Internal Operations
Capability
Benefits to
Company
Opportunities
for
Advantage
Global R&D/ Collaboration Location-independent
connectivity sharing/distributed resources Work
Savings in Facilitates business Flexible work
telecommunications partnerships and arrangements
joint ventures
Improves connec Shortens develop Telecommuting and
tions to business ment time contract employees
partners/customers
Promotes global Disseminates Virtually teams based
awareness resources more on expertise, not
broadly location
International Flexibility & effectiveness Increased
reach in information-based activities productivity
Source: Cronin 1994

21. Options for Evolving an E-Business
Extend
Launch a new business
or add a new model
Enhance
Add functionality or improve product
/service that is currently offered
Extend
Enhance
Expand
Expand
Add products/services in existing line
or enter a new market
Exit
Exit
Drop a product/service
or exit a business

22. Alternative Views of Strategy
Past Decade Today
- One ideal competitive position - Unique competitive position
- Benchmarking and achieving best - Activities tailored to strategy
practices
- Aggressive outsourcing and - Clear trade-offs
partnering
- Advantages rest on a few key - Advantage arrives from fit across
success factors, resources, competencies activities
- Flexibility and rapid responses - Operational effectiveness a given

23. Other Interesting References
Strategy:
“In Search of Strategy,” Sloan Management Review, Spring 1999
Internet Technology:
Keen, P., Mougayar, W., and Torregrossa, T. (1998) The Business
Internet and Intranet: A manager’s guide to key terms and Concepts,
Harvard Business School Press.
Internet Online Atlas:
History of the Internet: