e business notes for ggsipu

8/16/2019 e business notes for ggsipu

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E-commerce & Indian history

EBusiness (e-Business), or Electronic Business, is the administration of conducting business viathe Internet. This would include the buying and selling of goods and services, along with providing technical or customer support through the Internet. e-Business is a term often used inconunction with e-commerce, but includes services in addition to the sale of goods.

Electronic business, or e-business, is the application of information and communicationtechnologies (I!T) in support of all the activities of business.

Circa 1991: Introduction of E-Commerce

The year "##" noted a new chapter in the history of the online world where e-commerce became

a hot choice amongst the commercial use of the internet. $t that time nobody would have even

thought that the buying and selling online or say the online trading will become a trend in the

world and India will also share a good proportion of this success.

Circa 2002: IRCTC teaches India to Boo ticet online

India first came into interaction with the online E-Commerce via the IRCTC . The government of

India e%perimented this online strategy to ma&e it convenient for its public to boo& the train

tic&ets. 'ence, the government came forward with the I!T! nline *assenger eservation

+ystem, which for the first time encountered the online tic&et boo&ing from anywhere at any

time. This was a boon to the common man as now they dont have to wait for long in line, no

issues for wastage of time during unavailability of the trains, no burden on the tic&et boo&ers and

many more. The advancements in the technology as the years passed on have been also seen in

the I!T! nline system as now one can boo& tic&ets (tat&al, normal, etc.) on one go, easy payments, can chec& the status of the tic&et and availability of the train as well. This is a big

achievement in the history of India in the field of online E-!ommerce.

Circa 200!: The "ee# "iscounted model of $li#art

The acceptance of the ecommerce on a large scale by the Indian people influenced other business

players also to try this techniue for their E-businesses and gain high profits. Though online

shopping has been present since the /// but it gained popularity only with deep discount modelof 0lip&art. In a way it re-launched online shopping in India. +oon other portals li&e $ma1on,

0lip&art, 2abong, etc. started hunting India for their businesses.

Circa 201%: Current cenario

Online shopping in its early stage was a simple medium for shopping with fewer options. Theusers can ust place an order and pay cash on delivery. But, in last few years this field has been

http://www.webopedia.com/TERM/I/Internet.htmlhttp://www.webopedia.com/TERM/C/customer_support.htmlhttp://www.webopedia.com/TERM/E/electronic_commerce.htmlhttp://www.webopedia.com/TERM/E/electronic_commerce.htmlhttps://en.wikipedia.org/wiki/Information_and_communication_technologieshttps://en.wikipedia.org/wiki/Businesshttp://www.webopedia.com/TERM/C/customer_support.htmlhttp://www.webopedia.com/TERM/E/electronic_commerce.htmlhttps://en.wikipedia.org/wiki/Information_and_communication_technologieshttps://en.wikipedia.org/wiki/Businesshttp://www.webopedia.com/TERM/I/Internet.html


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renovated to a high e%tent and hence fascinated many customers. Today, the online shopping has become a trend in India and the reason behind the adoption of this techniue lies in the attractiveonline websites, user friendly interface, bul&y online stores with new fashion, easy paymentmethods (i.e. secure pay online via gateways li&e paypal or cash-on-delivery), no bound onuantity 3 uality, one can choose the items based on si1e, color, price, etc.

4espite being a developing country, India has shown a commendable increase in the ecommerceindustry in the last couple of years, thereby hitting the mar&et with a boom. Though the Indianonline mar&et is far behind the 5+ and the 56, it has been growing at a fast page.

0urther, the addition of discounts, coupons, offers, referral systems, 7/days return guarantee, "-8days delivery time, etc. to the online shopping and the E-9ar&et have added new flavors to theindustry.

The 6ey drivers of in Indian ecommerce have been:

•

Increasing broadband Internet and 7; penetration.• ;rowing


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• ichness- $dvertising and branding are an important part of commerce. E-commerce can

deliver video, audio, animation, billboards, signs and etc. 'owever, its about as rich as

television technology.

• Interactivity- Twentieth !entury electronic commerce business technology is called

interactive, so they allow for two-way communication between businesses and

consumers.

• Information 4ensity- The density of information the Internet has greatly improved, as

long as the total amount and all mar&ets, consumers and businesses uality information.

The electronic commerce technology, reduce the information collection, storage,

communication and processing cost. $t the same time, accuracy and timeliness of the

information technology increases greatly, information is more useful, more important

than ever.

• *ersonali1ation- E-commerce technology allows for personali1ation. Business can be

adusted for a name, a person=s interests and past purchase message obects and mar&eting

message to a specific individual. The technology also allows for custom. 9erchants can

change the product or service based on user preferences, or previous behavior.

Types

B2B e-commerce is simply defined as e-commerce between companies. This is the type of e-commerce that deals with relationships between and among businesses. $bout @/A of e-commerce is of this type, and most e%perts predict that BB e-commerce will continue to grow

faster than the B! segment. The BB mar&et has two primary components: e-frastructure and e-mar&ets. E-frastructure is the architecture of BB, primarily consisting of the following:

• logistics - transportation, warehousing and distribution (e.g., *rocter and ;amble)

• application service providers - deployment, hosting and management of pac&aged

software from a central facility (e.g., racle and


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• Ceb-based commerce enablers (e.g., !ommerce ne, a browser-based, 9


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procurement, licensing procedures, and other government-related operations. This &ind of

e-commerce has two features: first, the public sector assumes a pilot?leading role in

establishing e-commerce and second, it is assumed that the public sector has the greatest

need for ma&ing its procurement system more effective.

Ceb-based purchasing policies increase the transparency of the procurement process (and

reduces the ris& of irregularities). To date, however, the si1e of the B; e-commerce

mar&et as a component of total e-commerce is insignificant, as government e-

procurement systems remain undeveloped.

Consumer-to-consumer e-commerce or !! is simply commerce between private individuals

or consumers.

This type of e-commerce is characteri1ed by the growth of electronic mar&etplaces and online

auctions, particularly in vertical industries where firms?businesses can bid for what they want

from among multiple suppliers." It perhaps has the greatest potential for developing new

mar&ets

!onsumer-to-!onsumer (!!) type e-commerce encompasses all electronic transactions of

goods or services conducted between consumers. ;enerally, these transactions are conducted

through a third party, which provides the online platform where the transactions are actually

carried out..

In C2B there is a complete reversal of the traditional sense of e%changing goods. This type of e-

commerce is very common in crowdsourcing based proects. $ large number of individuals ma&e

their services or products available for purchase for companies see&ing precisely these types of

services or products.

E%amples of such practices are the sites where designers present several proposals for a company

logo and where only one of them is selected and effectively purchased. $nother platform that is

very common in this type of commerce are the mar&ets that sell royalty-free photographs,

images, media and design elements, such as i+toc&photo.

#eer-to-#eer applications allow users to control many parameters of operation: how manymember connections to see& or allow at one time whose systems to connect to or avoid whatservices to offer and how many system resources to devote to the networ&. +ome simply connectto some subset of active nodes in the networ& with little user control,Chile ** systems had previously been used in many application domains,J7K the concept was populari1ed by file sharingsystems such as the music-sharing application Dapster (originally released in "###). The peer-to- peer movement allowed millions of Internet users to connect Ldirectly, forming groups andcollaborating to become user-created search engines, virtual supercomputers, and filesystems.L

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The )d(anta'es

*1+ Cost Effecti(e

The entire financial transactions will eventually become electronic, so sooner conversion is

going to be lower on cost. It ma&es every transaction through e-commerce payment a lot cheaper.

*2+ ,i'her ar'in

E-commerce also enables us to move better with higher margin for more business safety. 'igher

margin also means business with more control as well as fle%ibility. Mou can also save time from

the e-commerce.

*.+ Better /roducti(ity

*roductivity here means productivity for both companies and customers. *eople li&e to find

answers online because it is faster and cheaper, and it costs a lot cheaper e%pense as well for the

company.

*%+ uic Com#arison


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E-commerce also enables you to compare price among several providers. In the end, it leads you

to smart shopping. *eople can save more money while they shop.

*+ Economy Benefit

E-commerce allows us to ma&e transaction without any needs on stores, infrastructureinvestment, and other common things we find. !ompanies only need well built website and

customer service.

The "isad(anta'es

*1+ ecurity

!ustomers need to be confident and trust the provider of payment method. +ometimes, we can be

tric&ed. E%amine on integrity and reputation of the web stores before you decide to buy.

*2+ calability of ystem

$ company definitely needs a well developed website to support numbers of customers at a time.

If your web destination is not well enough, you better forget it.

*.+ Inte'rity on "ata and ystem

!ustomers need secure access all the time. In addition to it, protection to data is also essential.

5nless the transaction can provide it, we should refuse for e-commerce.

*%+ /roducts /eo#le

*eople who prefer and focus on product will not buy online. They will want to feel, try, and sit

on their new couch and bed.

*+ Customer er(ice and Relation /roblem

They sometimes forget how essential to build loyal relationship with customers. Cithout loyalty

from customers, they will not survive the business.

Technical "isad(anta' es

• T here can be lac& of system security, reliability or standards owing to poor

implementation of e-!ommerce.

• +oftware development industry is still evolving and &eeps chang ing rapidly.

• In many countries, networ& bandwidth mig ht cause an issue as there is insufficient

telecommunication bandwidth available.


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• +pecial types of web server or other software mig ht be reuired by the vendor setting the

e commerce environment apart from networ& servers.

• +ometimes, it becomes difficult to integ rate E-!ommerce software or website with the

e%isting application or databases.

• T here could be software?hardware compatibility issue as some E-!ommerce software

may be incompatible with some operating system or any other component.on-Technical "isad(anta' es

• Initial cost: T he cost of creating ? building E-!ommerce application in-house may be

very hig h. T here could be delay in launching the E-!ommerce application due tomista&es, lac& of e%perience.

• 5ser resistance: 5ser may not trust the site being un&nown faceless seller. +uch mistrust

ma&es it difficult to ma&e user switch from physical stores to online?virtual stores.

• +ecurity? *rivacy: 4ifficult to ensure security or privacy on online transactions.

•


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Ecommerce involves the mandatory useof internet.

Ebusiness can involve the use of internet7intranet or e3tranet.

E3am#le- Buying of pendrive from$ma1on.com is considered Ecommerce.

E3am#le- 5sing of Internet by 4ell, $ma1on for maintaing business processes li&e nlinecustomer support, email mar&eting, suplly chain

management.

•

•


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$pplication of e%tarnet

• supply chain

management

• customer

communication

• distribution

promotion

• online

training?education

•

customer service

• order status inuiry

• warrantry

registration

• claims

$pplication of internet

• 4ownload programs

and files

• E-9ail

• Noice and Nideo

!onferencing

• E-!ommerce

• 0ile +haring

•

Information browsing

• +earch the web

addresses for access

through search engine

• !hatting and many

moreO

Intranet $pplication

+haring of company

policies?rules 3 regulations

$ccess employee database

4istribution of

circulars?ffice rders

$ccess product 3 customer

data

+haring of information of

common interest


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of connected devices. minimal number of connecteddevices.

comparable with Intranet.

It is owned by no one. It is owned by single

organi1ation.

It is owned by single?multiple organi1ation

It is means of sharin'information throughout theworld.

It is means of sharin' sensiti(einformationthroughoutorgani1ation.

It is means of sharing informationbet6emembers and e3ternalmembers.

+ecurity is dependent of the user of device connected to networ&.

+ecurity is enforced via afirewall.

+ecurity is enforced via a firewall thseparates internet 3 e%tranet.

E3am#le: Chat we arenormally using is internet.

E3am#le: T!+ using internalnetwor& for its businessoperations.

E3am#le: '* and Intel using networ& f business related operations.

5sers can access Internetanonymously.

5sers should have validusername?password to accessIntranet.

5sers should have valid username?passwoto access E%tranet.

Internet is unre'ulated anduncensored.

But Intranet is regulated bythe or'aniation #olicies.

E%tranet is also re'ulated contractual agreements betweorgani1ations.

E"I stands for Electronic 4ata E%chang e. E4I is an electronic way of transferring businessdocuments in an org ani1ation internally between its various departments or e%ternally withsuppliers, customers or any subsidiaries etc. In E4I, paper documents are replaced withelectronic documents li&e word documents, spreadsheets etc.E"I "ocuments

0ollowing are few important documents used in E4I:

• Invoices

• *urchase orders

• +hipping euests

• $c&nowledg ement

• Business !orrespondence letters

• 0inancial information letters


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A buyer prepares an order in his or her purchasing system and has it approved.

Next, the EDI order is translated into an EDI document format called an 85

purchase order.

The @P/ purchase order is then securely transmitted to the supplier either via the internet or through a

N$D (Nalue $dded Detwor&).

If the purchase order is sent using a N$D, then the buyers N$D interconnects with the suppliers N$D.

The N$Ds ma&e sure that E4I transactions are sent securely and reliably. The suppliers N$D ensures

that the supplier receives the order.

The suppliers computer system then processes the order. In the case of !ovalentCor&s clients, we

provide N$D transportation and our servers provide all of the software and hardware reuired to process

E4I documents. nly internet access and email are needed.

4ata security and control are maintained throughout the transmission process using passwords, user

identification and encryption. Both the buyers and the suppliers E4I applications edit and chec& the

documents for accuracy.

Advantages of an EDI SystemFollowing are the advantages of an EDI System.

• Reduction in data entry errors. - Chances of errors are much less being use of computer in data entry.

• Shorter processing life cycle - As orders can be processed as soon as they areentered into the system. his reduced the processing time of the transfer documents.

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• Electronic form of data - It is !uite easy to transfer or share data being inelectronic format.

• Reduction in paperwork - As lot of paper documents are replaced with electronicdocuments there is hug e reduction in paperwor".

• Cost Eective - As time is saved and orders are processed very effectively# EDIproves to be higly cost effective.

• Standard eans of communication - EDI enforces standards on the content of data and its format which leads to clearer communication.

value chain

the process or activities by which a company adds value to an article, including production,mar&eting, and the provision of after-sales service.

$ value chain is the whole series of activities that create and build value at every step. The totalvalue delivered by the company is the sum total of the value built up all throughout the company.9ichael *orter developed this concept in his "#@/ boo& =!ompetitive $dvantage=.

What is the value chain made of?

*orter defines the value chain as made of primary activities and support activities. *rimaryinvolves inbound logistics (getting the material in for adding value by processing it), operations(which are all the processes within the manufacturing), outbound (which involves distribution tothe points of sale), mar&eting and sales (which go sell it, brand it and promote it) and service(which maintains the functionality of the product, post sales).


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The support functions which feed into all the primary functions are the firm infrastructure, li&e9I+ which allows managers to monitor the environment well 'uman esource, which developsthe s&ills needed to steer the company well procurement to buy? source goods at the right price,which increasingly ta&es importance because of difficult economic conditions and technology,which could give the firm speed, accuracy and uality. Both these allow the firm to charge a

margin, which partly comes from the value addition of the primary and support functions and partly from the advantage that the company gains due to communication of the value addition tothe consumer (brand image, faith, trust and so on).

The supply chain is the networ& created amongst different companies producing, handling and?or distributing a specific product. +pecifically, the supply chain encompasses the steps it ta&es toget a good or service from the supplier to the customer. +upply chain management is a crucial process for many companies, and many companies strive to have the most optimi1ed supplychain because it usually translates to lower costs for the company. Quite often, many peopleconfuse the term logistics with supply chain. In general, logistics refers to the distribution process within the company whereas the supply chain includes multiple companies such assuppliers, manufacturers, and the retailers.

http://www.investopedia.com/terms/s/scm.asphttp://www.investopedia.com/terms/l/logistics.asphttp://www.investopedia.com/terms/s/scm.asphttp://www.investopedia.com/terms/l/logistics.asp


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• alicious code: These term used to describe any code in any part of a software system or

script that is intended to cause undesired effects, security breaches or damage to asystem. 9alicious code is an application security threat that cannot be efficientlycontrolled by conventional antivirus software alone. 9alicious code describes a broadcategory of system security terms that includes attac& scripts, viruses, worms, Troanhorses, bac&doors and malicious active content. $ computer virus is a program or piece

of code that is loaded onto your computer without your &nowledge and runs against your wishes. Niruses can also replicate themselves. $ll computer viruses are man-made. $simple virus that can ma&e a copy of itself over and over again is relatively easy to produce. Even such a simple virus is dangerous because it will uic&ly use all availablememory and bring the system to a halt. $n even more dangerous type of virus is onecapable of transmitting itself across networ&s and bypassing security systems.In computing, Troan horse, or Troan, is any malicious computer program which is usedto hac& into a computer by misleading users of its true intent.

• n6anted #ro'ram: These are that program which are install without the users

&nowledge. +uch program are increasingly being found on social networ&ing 3 user-generated content si1es where the user are fooled to downloaded them. nce they are

installed these are difficult to uninstalled from your computer. $ browser parasites are thee%ample of unwanted program these are that program which can change your browser setting for instance change your browser home page, sending information for your sitevisited to your host system.for e%ample websearch is adware component that modigiedyour internet e%plorer home page. +pyware are the another e%ample of unwanted programe +pyware is any technology that aids in gathering information about a person or organi1ation without their &nowledge. n the Internet (where it is sometimes calledaspybot or trac&ing software), spyware is programming that is put in someone=s computer

http://www.webopedia.com/TERM/C/computer.htmlhttp://www.webopedia.com/TERM/C/computer.htmlhttp://www.webopedia.com/TERM/C/copy.htmlhttp://www.webopedia.com/TERM/C/copy.htmlhttp://www.webopedia.com/TERM/M/memory.htmlhttp://www.webopedia.com/TERM/S/system.htmlhttp://www.webopedia.com/TERM/S/system.htmlhttp://www.webopedia.com/TERM/N/network.htmlhttp://www.webopedia.com/TERM/N/network.htmlhttp://www.webopedia.com/TERM/S/security.htmlhttps://en.wikipedia.org/wiki/Computinghttps://en.wikipedia.org/wiki/Malwarehttps://en.wikipedia.org/wiki/Malwarehttps://en.wikipedia.org/wiki/Computer_programhttp://www.webopedia.com/TERM/C/computer.htmlhttp://www.webopedia.com/TERM/C/copy.htmlhttp://www.webopedia.com/TERM/M/memory.htmlhttp://www.webopedia.com/TERM/S/system.htmlhttp://www.webopedia.com/TERM/N/network.htmlhttp://www.webopedia.com/TERM/S/security.htmlhttps://en.wikipedia.org/wiki/Computinghttps://en.wikipedia.org/wiki/Malwarehttps://en.wikipedia.org/wiki/Computer_program


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to secretly gather information about the user and relay it to advertisers or other interested parties. +pyware can get in a computer as a software virus or as the result of installing anew program.

• /hishin' is the attempt to acuire sensitive information such as usernames, passwords,

and credit card details (and sometimes, indirectly, money), often for malicious reasons,

by masuerading as a trustworthy entity in an electronic communication. *hishing emailsmay contain lin&s to websites that are infected with malware.J7K *hishing is typicallycarried out by email spoofingJFK or instant messaging,JPK and it often directs users to enter details at a fa&e website whose loo& and feel are almost identical to the legitimate one.*hishing is an e%ample of social engineering techniues used to deceive users, ande%ploits the poor usability of current web security technologies.

,acin':

#oofin':

niffin':

Insider attac:

Cry#to'ra#hy is an essential information security tool. It provides the four most basic services

of information security R

• Confidentiality R Encryption techniue can guard the information and communication

from unauthori1ed revelation and access of information.

• )uthentication R The cryptographic techniues such as 9$! and digital signatures can

protect information against spoofing and forgeries.

• "ata Inte'rity R The cryptographic hash functions are playing vital role in assuring the

users about the data integrity.

• on-re#udiation R The digital signature provides the non-repudiation service to guard

against the dispute that may arise due to denial of passing message by the sender.

$ll these fundamental services offered by cryptography has enabled the conduct of business

over the networ&s using the computer systems in e%tremely efficient and effective manner.

!ryptography S 4rawbac&s

$part from the four fundamental elements of information security, there are other issues thataffect the effective use of information R

• $ strongly encrypted, authentic, and digitally signed information can bedifficult to

access e(en for a le'itimate user at a crucial time of decision-ma&ing. The networ& or

the computer system can be attac&ed and rendered non-functional by an intruder.

http://searchsecurity.techtarget.com/definition/virushttp://searchsecurity.techtarget.com/definition/virushttps://en.wikipedia.org/wiki/Information_sensitivityhttps://en.wikipedia.org/wiki/Information_sensitivityhttps://en.wikipedia.org/wiki/Credit_cardhttps://en.wikipedia.org/wiki/Credit_cardhttps://en.wikipedia.org/wiki/Moneyhttps://en.wikipedia.org/wiki/Electronic_communicationhttps://en.wikipedia.org/wiki/Malwarehttps://en.wikipedia.org/wiki/Phishing#cite_note-Google-3https://en.wikipedia.org/wiki/Phishing#cite_note-Google-3https://en.wikipedia.org/wiki/Email_spoofinghttps://en.wikipedia.org/wiki/Email_spoofinghttps://en.wikipedia.org/wiki/Phishing#cite_note-DMARC-4https://en.wikipedia.org/wiki/Instant_messaginghttps://en.wikipedia.org/wiki/Instant_messaginghttps://en.wikipedia.org/wiki/Phishing#cite_note-5https://en.wikipedia.org/wiki/Phishing#cite_note-5https://en.wikipedia.org/wiki/Look_and_feelhttps://en.wikipedia.org/wiki/Social_engineering_(computer_security)https://en.wikipedia.org/wiki/Social_engineering_(computer_security)http://searchsecurity.techtarget.com/definition/virushttps://en.wikipedia.org/wiki/Information_sensitivityhttps://en.wikipedia.org/wiki/Credit_cardhttps://en.wikipedia.org/wiki/Moneyhttps://en.wikipedia.org/wiki/Electronic_communicationhttps://en.wikipedia.org/wiki/Malwarehttps://en.wikipedia.org/wiki/Phishing#cite_note-Google-3https://en.wikipedia.org/wiki/Email_spoofinghttps://en.wikipedia.org/wiki/Phishing#cite_note-DMARC-4https://en.wikipedia.org/wiki/Instant_messaginghttps://en.wikipedia.org/wiki/Phishing#cite_note-5https://en.wikipedia.org/wiki/Look_and_feelhttps://en.wikipedia.org/wiki/Social_engineering_(computer_security)


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• ,i'h a(ailability7 one of the fundamental aspects of information security, cannot be

ensured through the use of cryptography. ther methods are needed to guard against the

threats such as denial of service or complete brea&down of information system.

• $nother fundamental need of information security of selecti(e access control also

cannot be reali1ed through the use of cryptography. $dministrative controls and

procedures are reuired to be e%ercised for the same.

• !ryptography does not guard against the vulnerabilities and threats that emer'e from

the #oor desi'n of systems7 protocols, and procedures. These need to be fi%ed through

proper design and setting up of a defensive infrastructure.

• !ryptography comes at cost. The cost is in terms of time and money R

o $ddition of cryptographic techniues in the information processing leads to

delay.

o The use of public &ey cryptography reuires setting up and maintenance of public

&ey infrastructure reuiring the handsome financial budget.

• The security of cryptographic techniue is based on the computational difficulty of

mathematical problems. $ny brea&through in solving such mathematical problems or

increasing the computing power can render a cryptographic techniue vulnerable.

Encry#tion

Encryption is the process of encoding messages or information in such a way that onlyauthori1ed parties can read it. The translation of data into a secret code. Encryption is themost effective way to achieve data security. To read an encrypted file, you must haveaccess to a secret &ey or password that enables you to decrypt it. 5nencrypted data iscalled plain te%t encrypted data is referred to as cipher te%t. The purpose of encryption isto ensure that only somebody who is authori1ed to access data (e.g. a te%t message or afile), will be able to read it, using the decryption &ey. +omebody who is not authori1edcan be e%cluded, because he or she does not have the reuired &ey, without which it isimpossible to read the encrypted information.Types of encryption

• +ymmetric &ey encryption

In symmetric-&ey schemes,J"K the encryption and decryption &eys are the same.!ommunicating parties must have the same &ey before they can achieve securecommunication.

• Public key encryption

https://en.wikipedia.org/wiki/Key_(cryptography)https://en.wikipedia.org/wiki/Key_(cryptography)https://en.wikipedia.org/wiki/Key_(cryptography)https://en.wikipedia.org/wiki/Symmetric-key_algorithmhttps://en.wikipedia.org/wiki/Encryption#cite_note-1https://en.wikipedia.org/wiki/Key_(cryptography)https://en.wikipedia.org/wiki/Symmetric-key_algorithmhttps://en.wikipedia.org/wiki/Encryption#cite_note-1


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/ublic-ey cry#to'ra#hy, or asymmetric cry#to'ra#hy, is any cryptographic systemthat uses two &inds of &eys: public keys that may be disseminated widely, while privatekeys are &nown only to the owner. In a public-&ey encryption system, any person canencrypt a message using the public &ey of the receiver, but such a message can bedecrypted only with the receiver=s private &ey

/ublic-ey cry#to'ra#hy, or asymmetric cry#to'ra#hy, is any cryptographic system that usestwo &inds of &eys: public keys that may be disseminated widely, while private keys are &nownonly to the owner. In a public-&ey encryption system, any person can encrypt a message usingthe public &ey of the receiver, but such a message can be decrypted only with the receiver=s private &ey.

The most important properties of public &ey encryption scheme are R

• 4ifferent &eys are used for encryption and decryption. This is a property which set this

scheme different than symmetric encryption scheme.

• Each receiver possesses a uniue decryption &ey, generally referred to as his private &ey.

• eceiver needs to publish an encryption &ey, referred to as his public &ey.

• +ome assurance of the authenticity of a public &ey is needed in this scheme to avoid

spoofing by adversary as the receiver. ;enerally, this type of cryptosystem involves

trusted third party which certifies that a particular public &ey belongs to a specific person

or entity only.

•

Encryption algorithm is comple% enough to prohibit attac&er from deducing the plainte%tfrom the cipherte%t and the encryption (public) &ey.

• Though private and public &eys are related mathematically, it is not be feasible to

calculate the private &ey from the public &ey. In fact, intelligent part of any public-&ey

cryptosystem is in designing a relationship between two &eys.

;


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In computing, a fire6all is a networ& security system that monitors and controls the incomingand outgoing networ& traffic based on predetermined security rules.J"K $ firewall typicallyestablishes a barrier between a trusted, secure internal networ& and another outside networ&,such as the Internet, that is assumed not to be secure or trusted.

+everal types of firewalls e%ist:

• /acet filterin': The system e%amines each pac&et entering or leaving the networ& and

accepts or reects it based on user-defined rules. *ac&et filtering is fairly effective andtransparent to users, but it is difficult to configure. In addition, it is susceptible to I*spoofing.

https://en.wikipedia.org/wiki/Computinghttps://en.wikipedia.org/wiki/Network_securityhttps://en.wikipedia.org/wiki/Firewall_(computing)#cite_note-1https://en.wikipedia.org/wiki/Computinghttps://en.wikipedia.org/wiki/Network_securityhttps://en.wikipedia.org/wiki/Firewall_(computing)#cite_note-1


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• Circuit-le(el 'ate6ay im#lementation: This process applies security mechanisms when

a T!* or 54* connection is established. nce the connection has been made, pac&etscan flow between the hosts without further chec&ing.

• )ctin' as a #ro3y ser(er: $ pro%y server is a type of gateway that hides the true

networ& address of the computer(s) connecting through it. $ pro%y server connects to theInternet, ma&es the reuests for pages, connections to servers, etc., and receives the dataon behalf of the computer(s) behind it. The firewall capabilities lie in the fact that a pro%ycan be configured to allow only certain types of traffic to pass (e.g.,'TT* files, or web pages). $ pro%y server has the potential drawbac& of slowing networ& performance, sinceit has to actively analy1e and manipulate traffic passing through it.

• 4eb a##lication fire6all: $ web application firewall is a hardware appliance, server

plug-in, or some other software filter that applies a set of rules to a 'TT* conversation.+uch rules are generally customi1ed to the application so that many attac&s can beidentified and bloc&ed.

$ personal firewall (sometimes called a des&top firewall) is a software application used to protect a single Internet-connected computer from intruders. *ersonal firewall protection isespecially useful for users with Lalways-onL connections such as 4+


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" Detwor& based I4+ (DI4+):- It is a networ& security system focusing on the attac&s that

come from the inside of the networ& (authori1ed users). +ome systems may attempt to

stop an intrusion attempt but this is neither reuired nor e%pected of a monitoring system.

Detwor& Intrusion 4etection +ystems (DI4+) are placed at a strategic point or points

within the networ& to monitor traffic to and from all devices on the networ&. It performs

an analysis of passing traffic on the entire subnet, and matches the traffic that is passed on

the subnets to the library of &nown attac&s. nce an attac& is identified, or abnormal

behavior is sensed, the alert can be sent to the administrator. $n e%ample of an DI4+

would be installing it on the subnet where firewalls are located in order to see if someone

is trying to brea& into the firewall. Ideally one would scan all inbound and outbound

traffic, however doing so might create a bottlenec& that would impair the overall speed of

the networ&

'ost based I4+ ('I4+) : 'ost Intrusion 4etection +ystems ('I4+) run on individual

hosts or devices on the networ&. $ 'I4+ monitors the inbound and outbound pac&etsfrom the device only and will alert the user or administrator if suspicious activity is

detected. It ta&es a snapshot of e%isting system files and matches it to the previous

snapshot. If the critical system files were modified or deleted, an alert is sent to the

administrator to investigate. $n e%ample of 'I4+ usage can be seen on mission critical

machines, which are not e%pected to change their configurations.

Intrusion detection and prevention systems (I4*+) are primarily focused on identifying

possible incidents, logging information about them, and reporting attempts. In addition,

organi1ations use I4*+ for other purposes, such as identifying problems with security

policies, documenting e%isting threats and deterring individuals from violating security policies. I4*+ have become a necessary addition to the security infrastructure of nearly every

organi1ation. I4*+ typically record information related to observed events, notify security

administrators of important observed events and produce reports. 9any I4*+ can also

respond to a detected threat by attempting to prevent it from succeeding. They use several

response techniues, which involve the I4*+ stopping the attac& itself, changing the security

environment (e.g. reconfiguring a firewall) or changing the attac&=s content.

Com#arison 6ith $ire6all:- Though they both relate to networ& security, an intrusion detection

system (I4+) differs from a firewall in that a firewall loo&s outwardly for intrusions in order to

stop them from happening. 0irewalls limit access between networ&s to prevent intrusion and donot signal an attac& from inside the networ&. $n I4+ evaluates a suspected intrusion once it has

ta&en place and signals an alarm. $n I4+ also watches for attac&s that originate from within a

system. This is traditionally achieved by e%amining networ& communications, identifying

heuristics and patterns (often &nown as signatures) of common computer attac&s, and ta&ing

action to alert operators. $ system that terminates connections is called an intrusion prevention

system, and is another form of an application layer firewall.

https://en.wikipedia.org/wiki/Firewall_(computing)https://en.wikipedia.org/wiki/Intrusion_prevention_systemhttps://en.wikipedia.org/wiki/Intrusion_prevention_systemhttps://en.wikipedia.org/wiki/Application_layer_firewallhttps://en.wikipedia.org/wiki/Firewall_(computing)https://en.wikipedia.org/wiki/Intrusion_prevention_systemhttps://en.wikipedia.org/wiki/Intrusion_prevention_systemhttps://en.wikipedia.org/wiki/Application_layer_firewall


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A public key infrastructure &PKI' is a set of roles, policies, and procedures needed to create,manage, distribute, use, store, and revo"e digital certificates()* and manage public+"eyencryption. $he purpose of a -I is to facilitate the secure electronic transfer of information for arange of net!or" activities such as e+commerce, internet ban"ing and confidential email

$ public &ey infrastructure (*6I) supports the distribution and identification of public

encryption &eys, enabling users and computers to both securely e%change dataover networ&s such as the Internet and verify the identity of the other party

$ typical *6I includes the following &ey elements:

• $ trusted party, called a certificate authority (!$), acts as the root of trust and provides

services that authenticate the identity of individuals, computers and other entities

• $ registration authority, often called a subordinate !$, certified by a root !$ to issue

certificates for specific uses permitted by the root

•

$ certificate database, which stores certificate reuests and issues and revo&es certificates

• $ certificate store, which resides on a local computer as a place to store issued certificates

and private &eys

$ !$ issues digital certificates to entities and individuals after verifying their identity. It signs

these certificates using its private &ey its public &ey is made available to all interested parties in

a self-signed !$ certificate. !$s use this trusted root certificate to create a Lchain of trustL --

many root certificates are embedded in Ceb browsers so they have built-in trust of those !$s.

Ceb servers, email clients, smartphones and many other types of hardware and software also

support *6I and contain trusted root certificates from the maor !$s.

$long with an entitys or individuals public &ey, digital certificates contain information about

the algorithm used to create the signature, the person or entity identified, the digital signature of

the !$ that verified the subect data and issued the certificate, the purpose of the public &ey

encryption, signature and certificate signing, as well as a date range during which the certificate

can be considered valid.

A virtual private network &VPN' extends a private net!or" across a public net!or",

such as the Internet. It enables users to send and receive data across shared or public

net!or"s as if their computing devices !ere directly connected to the private net!or",

and thus benefit from the functionality, security and management policies of the private

net!or".()* A N is created by establishing a virtual point+to+point connection through

the use of dedicated connections, virtualtunnelling protocols, or traffic encryption.

6ey design obectives when selecting N*D features must include the following:

• +ecure remote access for users anywhere, anytime.

https://en.wikipedia.org/wiki/Digital_certificateshttps://en.wikipedia.org/wiki/Digital_certificateshttps://en.wikipedia.org/wiki/Public_key_infrastructure#cite_note-1https://en.wikipedia.org/wiki/Public_key_infrastructure#cite_note-1http://searchsecurity.techtarget.com/definition/keyhttp://searchsecurity.techtarget.com/definition/keyhttp://searchnetworking.techtarget.com/definition/networkhttp://searchwindevelopment.techtarget.com/definition/Internethttp://searchwindevelopment.techtarget.com/definition/Internethttp://searchsecurity.techtarget.com/definition/certificate-authorityhttp://searchsecurity.techtarget.com/definition/certificate-authorityhttp://searchsecurity.techtarget.com/definition/registration-authorityhttp://searchsecurity.techtarget.com/definition/registration-authorityhttp://searchsecurity.techtarget.com/definition/private-keyhttp://whatis.techtarget.com/definition/algorithmhttp://whatis.techtarget.com/definition/algorithmhttps://en.wikipedia.org/wiki/Private_networkhttps://en.wikipedia.org/wiki/Private_networkhttps://en.wikipedia.org/wiki/Internethttps://en.wikipedia.org/wiki/Virtual_private_network#cite_note-1https://en.wikipedia.org/wiki/Point-to-point_(network_topology)https://en.wikipedia.org/wiki/Point-to-point_(network_topology)https://en.wikipedia.org/wiki/Tunnelling_protocolshttps://en.wikipedia.org/wiki/Encryptionhttp://searchmidmarketsecurity.techtarget.com/definition/remote-accesshttps://en.wikipedia.org/wiki/Digital_certificateshttps://en.wikipedia.org/wiki/Public_key_infrastructure#cite_note-1http://searchsecurity.techtarget.com/definition/keyhttp://searchnetworking.techtarget.com/definition/networkhttp://searchwindevelopment.techtarget.com/definition/Internethttp://searchsecurity.techtarget.com/definition/certificate-authorityhttp://searchsecurity.techtarget.com/definition/registration-authorityhttp://searchsecurity.techtarget.com/definition/private-keyhttp://whatis.techtarget.com/definition/algorithmhttps://en.wikipedia.org/wiki/Private_networkhttps://en.wikipedia.org/wiki/Internethttps://en.wikipedia.org/wiki/Virtual_private_network#cite_note-1https://en.wikipedia.org/wiki/Point-to-point_(network_topology)https://en.wikipedia.org/wiki/Tunnelling_protocolshttps://en.wikipedia.org/wiki/Encryptionhttp://searchmidmarketsecurity.techtarget.com/definition/remote-access


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• Easy setup, configuration, use and maintenance.

• $ffordability for widespread corporate use.

• Ease of use: There should be no obvious performance problems, no maor usage hoops to

ump through, no LgotchasL or other downsides to regular freuent use.

". Enhanced security. Chen you connect to the networ& through a N*D, the data is &ept

secured and encrypted. In this way the information is away from hac&ers eyes.

. Remote control. In case of a company, the great advantage of having a N*D is that the

information can be accessed remotely even from home or from any other place. Thats why a

N*D can increase productivity within a company.

7. hare files. $ N*D service can be used if you have a group that needs to share files for a

long period of time.

F. >nline anonymity. Through a N*D you can browse the web in complete anonymity.

!ompared to hide I* software or web pro%ies, the advantage of a N*D service is that it

allows you to access both web applications and websites in complete anonymity.

P. nbloc 6ebsites & by#ass filters. N*Ds are great for accessing bloc&ed websites or

for bypassing Internet filters. This is why there is an increased number of N*D services used

in countries where Internet censorship is applied.

. Chan'e I/ address. If you need an I* address from another country, then a N*D can

provide you this.

https://www.newshosting.com/blog/vpn-speed-test/https://www.newshosting.com/blog/vpn-speed-test/


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8. Better #erformance. Bandwidth and efficiency of the networ& can be generally

increased once a N*D solution is implemented.

@. Reduce costs. nce a N*D networ& is created, the maintenance cost is very low. 9ore

than that, if you opt for a service provider, the networ& setup and surveillance is no more aconcern.

Electronic money, or e+money, is the money balance recorded electronically on a stored+

value card. $hese cards have microprocessors embedded !hich can be loaded !ith a

monetary value. Another form of electronic money is net!or" money, soft!are that allo!s

the transfer of value on computer net!or"s, particularly the internet. Electronic money is a

floating claim on a private ban" or other financial institution that is not lin"ed to any particular

account.()* Examples of electronic money are ban" deposits, electronic funds transfer , direct

deposit, payment processors, and digital currencies.

Electronic Cash

*rimary advantage is with purchase of items less than >"/

S !redit card transaction fees ma&e small purchases unprofitable

S 9icropayments

*ayments for items costing less than >"

!onsumer buys e-cash from Ban&

Ban& sends e-cash bits to consumer (after charging that amount plus fee) !onsumer sends e-cash to merchant F. 9erchant chec&s with Ban& that e-cash is valid (chec& for forgery or fraud) Ban& verifies that e-cash is valid *arties complete transaction: e.g., merchant present e-cash to issuing bac& for deposit

once goods or services are delivered

)d(anta'es

9ore efficient, eventually meaning lower prices


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Eliminates need to repeatedly enter identifying information into formsto purchase

Cor&s in many different stores to speed chec&out

$ma1on.com one of the first online merchants to eliminate repeat form-filling for purchases

mart Cards

*lastic card containing an embedded microchip $vailable for over "/ years +o far not successful in 5.+., but popular in Europe, $ustralia, and 2apan

+mart cards gradually reappearing in 5.+. success depends on:

!ritical mass of smart cards that support applications !ompatibility between smart cards, card-reader devices, and applications

9agnetic stripe

"F/ bytes, cost >/./-/.8P

9emory cards

"-F 6B memory, no processor, cost >".//-.P/

ptical memory cards

F megabytes read-only (!4-li&e), cost >8.//-".//

9icroprocessor cards

Embedded microprocessor

(8.//-"P.// 7-bit processors now available

$dvantages:

$tomic, debt-free transactions 0easible for very small transactions (information commerce) (*otentially) anonymous +ecurity of physical storage

(*otentially) currency-neutral

4isadvantages:

•


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!redit card

5sed for the maority of Internet purchases

'as a preset spending limit

!urrently most convenient method

9ost e%pensive e-payment mechanism

9aster!ard: >/.# U A of transaction value

4isadvantages

4oes not wor& for small amount (too e%pensive)

debit card


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$ debit card is a plastic card which provides an alternative payment method to cash

when ma&ing purchases. *hysically the card is an I+ 8@"/ card li&e a credit card 4epending on the store or merchant, the customer may swipe or insert their card into the

terminal, or they may hand it to the merchant who will do so. The transaction isauthori1ed and processed and the customer verifies the transaction either by entering a

*ID or, occasionally, by signing a sales receipt.

electronic funds transfer

It is a very popular electronic payment method to transfer money from one ban& account toanother ban& account. $ccounts can be in same ban& or different ban&. 0und transfer can be doneusing $T9 ($utomated T eller 9achine) or using computer. Dow a day, internet based E0T is g etting popularity. In this case, customer uses website provided by the ban&. !ustomer log ins to the ban&=s website and reg isters another ban& account. 'e?she then places a reuest to transfer certain amount to that account. !ustomer=s ban& transfers amount to other account if it is in same ban& otherwise transfer reuest is forwarded to$!' ($utomated !learing 'ouse) to transfer amount to other account and amount is deductedfrom customer=s account. nce amount is transferred to other account, customer is notified of thefund transfer by the ban& Ty#es of electronic funds transfer?

DE0T or Dational Electronics 0unds Transfer T;+ or eal Time ;ross +ettlement I9*+ or Immediate *ayment +ervice.

E$T

The Dational Electronic 0unds Transfer is a nation-wide money transfer system whichallows customers with the facility to electronically transfer funds from their respective ban& accounts to any other account of the same ban& or of any other ban& networ&. Dot ustindividuals but also firms and corporate organi1ations may use the DE0T system to transfer funds to and fro.

0unds transfer through DE0T reuires a transferring ban& and a destination ban&. Ciththe BI organi1ing the records of all the ban& branches at a centrali1ed database, almostall the ban&s are enabled to carry out an DE0T transaction. Before transferring funds via DE0T you register the beneficiary, receiving funds. 0or this you must possessinformation such as name of the recipient, recipients ban& name, a valid account number belonging to the recipient and his respective ban&s I0+! code. These fields aremandatory for a funds transfer to be authori1ed and processed.

$ny sum of money can be transferred using the DE0T system with a ma%imum cap of s. "/, //, ///.

DE0T transactions can be ordered anytime you want, even on holidays e%cept for +undays which are designated ban& holidays. 'owever, the transactions are settled in batches defined by the eserve Ban& of India depending upon specific time slots. Thereare " settlement batches operating at present between the time slot of @am to 8 pm onwee&days and from @ am to "pm on +aturdays with settlement batches.

RE$ T eal Time ;ross +ettlement as the name suggests is a real time funds transfer system

which facilitates you to transfer funds from one ban& to another in real time or on a gross basis. The transaction isnt put on a waiting list and cleared out instantly. T;+ paymentgateway, maintained by the eserve Ban& of India ma&es transactions between ban&s


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electronically. The transferred amount is instantly deducted from the account of one ban&s and credited to the other ban&s account.

5sers such as individuals, companies or firms can transfer large sums using the T;+system. The minimum value that can be transferred using T;+ is s.


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4eb tracin'

E-businesses draw information on how visitors use a site through log files. $nalysis of log file

means turning log data into application service or installing software that can pluc& relevant

information from files in-house. !ompanies trac& individuals movement through trac&ing

software and coo&ie analysis. *rograms such as coo&ies raise a batch of privacy concerns. The

trac&ing history is stored on your *!s hard dis&, and any time you revisit a website, the

computer &nows it. 9any smart end users install programs such as !oo&ie cutters, +pam

Butcher, etc which can provide users some control over the coo&ies.

The battle between computer end users and web trac&ers is always going on with a range of

application programs. 0or e%ample, software such as *rivacy ;uardian, 9y *rivacy, etc can

protect users online privacy by erasing browsers cache, surfing history and coo&ies. To detect

and remove spyware specially designed programs li&e $d-$ware are present. $ data miner

application, +ah$gent collects and combines Internet browsing history of users and sends it to

servers. The battle goes onW

/ri(acy

9ost Electronic *ayment +ystems &nows the identity of the buyer. +o it is necessary to protect

the identity of a buyer who uses Electronic *ayment +ystem.

$ privacy issue related to the employees of company is trac&ing. 9onitoring systems are

installed in many companies to monitor e-mail and other web activities in order to identify

employees who e%tensively use business hours for non-business activities. The e-commerce

activities performed by a buyer can be trac&ed by organi1ations. 0or e%ample, reserving railway

tic&ets for their personal ourney purpose can be trac&ed. 9any employees dont want to be

under the monitoring system even while at wor&.

$s far as bro&ers and some of the company employees are concerned, E-!ommerce puts them in

danger 1one and results in elimination from their obs. The manner in which employees are

treated may raise ethical issues, such as how to handle displacement and whether to offer

retraining programs.

"isintermediation and Reintermediation

Intermediation is one of the most important and interesting e-commerce issue related to loss of

obs. The services provided by intermediaries are

(i) 9atching and providing information.

(ii) Nalue added services such as consulting.


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The first type of service (matching and providing information) can be fully automated, and this

service is li&ely to be in e-mar&etplaces and portals that provide free services. The value added

service reuires e%pertise and this can only be partially automated. The phenomenon by which

Intermediaries, who provide mainly matching and providing information services are eliminated

is called 4isintermediation.

The bro&ers who provide value added services or who manage electronic intermediation (also

&nown as infomediation), are not only surviving but may actually prosper, this phenomenon is

called eintermediation.

The traditional sales channel will be negatively affected by disintermediation. The services

reuired to support or complement e-commerce are provided by the web as new opportunities for

reintermediation. The factors that should be considered here are the enormous number of

participants, e%tensive information processing, delicate negotiations, etc. They need a computer

mediator to be more predictable.

;e'al Issues

Chere are the headlines about consumers defrauding merchantsV Chat about fraud e-commerce

websitesV Internet fraud and its sophistication have grown even faster than the Internet itself.

There is a chance of a crime over the internet when buyers and sellers do not &now each other

and cannot even see each other. 4uring the first few years of e-commerce, the public witnessed

many frauds committed over the internet.


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The competition over domain names is another legal issue. Internet addresses are &nown as

domain names and they appear in levels. $ top level name is qburst.com or microsoft.com. $

second level name will beqburst.com/blog. Top level domain names are assigned by a central

non-profit organi1ation which also chec&s for conflicts or possible infringement of trademar&s.

*roblems arise when several companies having similar names competing over the same domain

name. The problem of domain names was alleviated somewhat in //" after several upper level

names were added to com.

$nother issue to loo& out for is !ybersuatting, which refers to the practice of registering

domain names with the desire of selling it at higher prices.

+ecurity features such as authentication, non-repudiation and escrow services can protect the

sellers in e-commerce.

ne needs to be careful while doing e-commerce activities. The need to educate the public about

the ethical and legal issues related to e-commerce is highly important from a buyer as well as

seller perspective.

co#e of E-8o(ernance

;overnance is all about flow of information between the ;overnment and !iti1ens, ;overnmentand Businesses and ;overnment and ;overnment. E-;overnance also covers all theserelationships as follows:

)+ 8o(ernment to Citien


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2+ E-Re'istration - It covers the online registration of various contracts and transactions thatmay reuire registration for giving it legality and enforceability. E-registration will help toreduce a significant amount of paperwor&.

.+ E-Trans#ortation - E-Transportation services would include services of ;overnment relating

to Transport by oad, ail, Cater or $ir. This may involve online S

" boo&ing and cancellation of tic&ets,

status of vehicles, railways, boats and flights,

7 issue and renewal of 4riving


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C+ 8o(ernment to 8o(ernment

;; relationship would include the relationships between !entral and +tate ;overnment andalso the relationship between two or more ;overnment departments.

1+ E-administration - It can reduce the communication time between the ;overnment4epartments and ;overnments. It can substantially reduce paper wor&, bring morality andtransparency to the administration of ;overnment 4epartments.

2+ E-#olice S It facilitates the wor& of the *olice department in investigation and administration.It includes databases of *olice fficers, their performances, !riminal databases S wanted as wellas in custody, the trends in crimes and much more. It can help reduce the response time 3 reducecost by reducing paperwor&.

.+ E-courts - The concept of E-!ourt will include the I!T enablement of the udicial process.Technology may help distant hearing, online summons, warrants and online publication of

2udgments and ule?rder.

"+ 8o(ernment to Business

1+ E-Ta3ation - !orporate sector pays many ta%es, duties and dues to the ;overnment. *aymentof these ta%es and duties will be made easier by E-Ta%ation. It can help reduce cost and time. Itcan also help to crosschec& the frauds and deficiencies in payment, further bringing accuracy andrevenue to the ;overnment.

2+ E-;icencin' - !ompanies have to acuire various licences from the ;overnment, similarly thecompanies have to acuire various registrations. I!T enablement of the licensing and registration

can reduce time and cost.

.+ E-Tenderin' - E-Tendering will include the facilities of online tendering and procurement. Itwill send online alerts as to new opportunities of business with the ;overnment and also onlinesubmission of tenders and online allotment of wor&. It will reduce time and cost involved in the physical tendering system.

The basic cate'ories of business models o(er internet include:

Broera'e

)d(ertisin'

Infomediary

erchant

anufacturer


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)ffiliate

Community

ubscri#tion

tility

-:Broera'e odel:-

Bro&ers are mar&et-ma&ers: they bring buyers and sellers together and facilitate transactions.Bro&ers play a freuent role in business-to-business (BB), business-to-consumer (B!), or consumer-to-consumer (!!) mar&ets. 5sually a bro&er charges a fee or commission for eachtransaction it enables. The formula for fees can vary. Bro&erage models include:

aret#lace E3chan'e: It offers a full range of services covering the transaction process, from

mar&et assessment to negotiation and fulfillment. E%changes operate independently or are bac&ed by an industry consortium. J>rbit, ChemConnectK

BuyAell $ulfillment -- ta&es customer orders to buy or sell a product or service, including termsli&e price and delivery. J!ars4irect, espond.comK

"emand Collection ystem -- the patented Lname-your-priceL model pioneered by*riceline.com. *rospective buyer ma&es a final (binding) bid for a specified good or service, andthe bro&er arranges fulfillment. J/riceline+comK

)uction Broer -- conducts auctions for sellers (individuals or merchants). Bro&er charges the

seller a listing fee and commission scaled with the value of the transaction. $uctions vary widelyin terms of the offering and bidding rules. JeBayK

Transaction Broer -- provides a third-party payment mechanism for buyers and sellers to settlea transaction. J/ay/al, Escrow.comK

"istributor -- is a catalog operation that connects a large number of product manufacturers withvolume and retail buyers. Bro&er facilitates business transactions between franchised distributorsand their trading partners.

earch )'ent -- a software agent or LrobotL used to search-out the price and availability for a

good or service specified by the buyer, or to locate hard to find information.

irtual aret#lace -- or virtual mall, a hosting service for online merchants that chargessetup, monthly listing, and?or transaction fees. 9ay also provide automated transaction andrelationship mar&eting services.

9erchant +ervices at )maon+comK

http://digitalenterprise.org/models/models.html#Affiliatehttp://digitalenterprise.org/models/models.html#Communityhttp://digitalenterprise.org/models/models.html#Subcriptionhttp://digitalenterprise.org/models/models.html#Utilityhttp://digitalenterprise.org/cases/orbitz.htmlhttp://digitalenterprise.org/cases/chemconnect.htmlhttp://digitalenterprise.org/cases/chemconnect.htmlhttp://www.carsdirect.com/the_companyhttp://www.respond.com/v2/faq.jsp?&bd=11&src=11&db=1http://digitalenterprise.org/cases/priceline.htmlhttp://digitalenterprise.org/cases/ebay.htmlhttp://digitalenterprise.org/cases/paypal.htmlhttp://www.escrow.com/company/index.asphttp://digitalenterprise.org/cases/amazon.htmlhttp://digitalenterprise.org/models/models.html#Affiliatehttp://digitalenterprise.org/models/models.html#Communityhttp://digitalenterprise.org/models/models.html#Subcriptionhttp://digitalenterprise.org/models/models.html#Utilityhttp://digitalenterprise.org/cases/orbitz.htmlhttp://digitalenterprise.org/cases/chemconnect.htmlhttp://www.carsdirect.com/the_companyhttp://www.respond.com/v2/faq.jsp?&bd=11&src=11&db=1http://digitalenterprise.org/cases/priceline.htmlhttp://digitalenterprise.org/cases/ebay.htmlhttp://digitalenterprise.org/cases/paypal.htmlhttp://www.escrow.com/company/index.asphttp://digitalenterprise.org/cases/amazon.html


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-:)d(ertisin' odel:-

The web advertising model is an e%tension of the traditional media broadcast model. The

broadcaster, in this case, a web site, provides content (usually, but not necessarily, for free) andservices (li&e email, I9, blogs) mi%ed with advertising messages in the form of banner ads. The banner ads may be the maor or sole source of revenue for the broadcaster. The broadcaster may be a content creator or a distributor of content created elsewhere. The advertising model wor&s best when the volume of viewer traffic is large or highly speciali1ed.

/ortal -- usually a search engine that may include varied content or services. $ high volume of user traffic ma&es advertising profitable and permits further diversification of site services. $ portal allows customi1ation of the interface and content to the user. $ niche portal cultivates awell-defined user demographic. JahooDK

Classifieds -- list items for sale or wanted for purchase.


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Incenti(e aretin' -- customer loyalty program that provides incentives to customers such asredeemable points or coupons for ma&ing purchases from associated retailers. 4ata collectedabout users is sold for targeted advertising. JCoolsa(in'sK

-:erchant odel:-

Cholesalers and retailers of goods and services. +ales may be made based on list prices or through auction.

irtual erchant --or e-tailer, is a retail merchant that operates solely over the web.J)maon+comK

Catalo' erchant -- mail-order business with a web-based catalog. !ombines mail, telephoneand online ordering. J;ands EndK

Clic and ortar -- traditional bric&-and-mortar retail establishment with web storefront.

JBarnes 3 DobleK

Bit endor -- a merchant that deals strictly in digital products and services and, in its purestform, conducts both sales and distribution over the web. J)##le iTunes usic toreK

-:anufacturer


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In contrast to the generali1ed portal, which see&s to drive a high volume of traffic to one site, theaffiliate model, provides purchase opportunities wherever people may be surfing. It does this byoffering financial incentives (in the form of a percentage of revenue) to affiliated partner sites.The affiliates provide purchase-point clic&-through to the merchant. It is a pay-for-performancemodel -- if an affiliate does not generate sales, it represents no cost to the merchant. The affiliate

model is inherently well-suited to the web, which e%plains its popularity. Nariations include, banner e%change, pay-per-clic&, and revenue sharing programs. JBarnes 3 Doble, $ma1on.comK

Banner E%change -- trades banner placement among a networ& of affiliated sites.

*ay-per-clic& -- site that pays affiliates for a user clic&-through.

evenue +haring -- offers a percent-of-sale commission based on a user clic&-through in whichthe user subseuently purchases a product.

-:Community odel:-

The viability of the community model is based on user loyalty. 5sers have a high investment in both time and emotion. evenue can be based on the sale of ancillary products and services or voluntary contributions or revenue may be tied to conte%tual advertising and subscriptions for premium services. The Internet is inherently suited to community business models and today thisis one of the more fertile areas of development, as seen in rise of social networ&ing.

pen +ource -- software developed collaboratively by a global community of programmers whoshare code openly. Instead of licensing code for a fee, open source relies on revenue generatedfrom related services li&e systems integration, product support, tutorials and user documentation.Jed 'atK

pen !ontent -- openly accessible content developed collaboratively by a global community of contributors who wor& voluntarily. JCi&ipediaK

*ublic Broadcasting -- user-supported model used by not-for-profit radio and television broadcasting e%tended to the web. $ community of users support the site through voluntarydonations. JThe !lassical +tation (C!*E.org)K

+ocial Detwor&ing +ervices -- sites that provide individuals with the ability to connect to other individuals along a defined common interest (professional, hobby, romance). +ocial networ&ingservices can provide opportunities for conte%tual advertising and subscriptions for premium

services. J0lic&r , 0riendster , r&utK

-:ubscri#tion odel:-

5sers are charged a periodic -- daily, monthly or annual -- fee to subscribe to a service. It is notuncommon for sites to combine free content with LpremiumL (i.e., subscriber- or member-only)

http://www.barnesandnoble.com/affiliate/intro.asphttp://digitalenterprise.org/cases/amazon.htmlhttp://digitalenterprise.org/cases/amazon.htmlhttp://digitalenterprise.org/cases/redhat.htmlhttp://digitalenterprise.org/cases/wikipedia.htmlhttp://www.classicalstation.org/http://wcpe.org/about.shtmlhttp://digitalenterprise.org/cases/flickr.htmlhttp://digitalenterprise.org/cases/flickr.htmlhttp://www.friendster.com/http://www.orkut.com/http://www.barnesandnoble.com/affiliate/intro.asphttp://digitalenterprise.org/cases/amazon.htmlhttp://digitalenterprise.org/cases/redhat.htmlhttp://digitalenterprise.org/cases/wikipedia.htmlhttp://www.classicalstation.org/http://wcpe.org/about.shtmlhttp://digitalenterprise.org/cases/flickr.htmlhttp://www.friendster.com/http://www.orkut.com/


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content. +ubscription fees are incurred irrespective of actual usage rates. +ubscription andadvertising models are freuently combined.

!ontent +ervices -- provide te%t, audio, or video content to users who subscribe for a fee to gainaccess to the service. J


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'ere payment occurs for single access to a document, video or music clip which can bedownloaded. It may or may not be protected with a password or 4igital ights 9anagement.

4igital rights management (49) uses different technologies to protect the distribution of digital services or content such as software, music, movies, or other digital data.

.+ Re(enue from C/ dis#lay ad(ertisin' on site

!*9 stands for Lcost per thousandL where 9 denotes L9illeL. The site owner such as 0T.comcharges advertisers a rate card price according to the number of its ads shown to site visitors. $dsmay be served by the site owners own ad server or more commonly through a third-party adnetwor& service such as ;oogle $d+ense..

%+ Re(enue from C/C ad(ertisin' on site


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to receive e-mail either from the publisher or third parties. The site owner can charge for adverts placed in its newsletter or can deliver a separate message on behalf of the advertiser (sometimes&nown as list rental). $ related approach is to conduct mar&et research with the site customers.

F+ )ccess to customers for online research

!onsidering all of these approaches to revenue generation together, the site owner will see& touse the best combination of these techniues to ma%imi1e the revenue. To assess how effectivedifferent pages or sites in their portfolio are at generating revenue, they will use two approaches.The first is e!*9, or effective !ost *er Thousand.

This loo&s at the total they can charge (or cost to advertisers) for each page or site. Throughincreasing the number of ad units on each page this value will increase. This is why you will seesome sites which are cluttered with ads. The other alternative to assess page or site revenuegenerating effectiveness is evenue per clic& (*!).

This is particularly important for affiliate mar&eters who ma&e money through commission whentheir visitors clic& through to third party retail sites such as $ma1on, and then purchase there.

"i'ital commerce (4-commerce) is a type of e-commerce used by an organi1ation that delivers

and sells products online. 4-commerce is used by companies that sell news, subscriptions,

documents or any form of electronic content, and the digital commerce company collects

payments, handles customer refunds and billing and manages other accounting functions for

online publisher clients.

4-commerce is considered a form of e-commerce because it deals with the e%change of

electronic goods.

The pay-as-you-go model is applied to digital commerce. !ustomers start an account with a

digital commerce company and can purchase te%t and content from publishers, but they only

have to relay their financial information once. This ma&es for a more secure online environment.

*ublishers of boo&s, news, maga1ines, white papers and academic research papers are big users

of digital commerce. +ome digital commerce companies resell publishers= content. This form of

business can be very profitable for publishers and digital commerce companies ali&e and,

depending on the business contract, the d-commerce company may get a cut of the publishing

company=s profit.

-commerce (mobile commerce) is the buying and selling of goods and services throughwireless handheld devices such as cellular telephone and personal digital assistants (*4$s).6nown as ne%t-generation e-commerce, m-commerce enables users to access the Internetwithout needing to find a place to plug in.


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• Business & /ersonal )ims - what is your business=s missionV Chat value are you

see&ing to provideV

• Business >bGecti(es - what do you want to achieveV

• Business odel - how will you achieve those obectivesV

• Tactical "e#loyment - what do you need to do to achieve those goalsV

• aretin' ReHuirements and 8oals - how will you reach your target customersV

• Content 8atherin' and ana'ement - Cho will do this and howV

• $ulfilment and ;o'istics - 9anaging your inventory and getting it to customers

•

$inancial ana'ement and /ayments - including security managment

• ocial edia - strategies to connect with your customers

• /latform & Technolo'y - what reuirements does your business have to achieve the

goals aboveV

• obile Commerce

• aintenance & ana'ement

e business notes for ggsipu

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