Electronic Commerceand 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 Internet

• A Brief History of the Internet

Growth in Internet Servers

34.5a

34.5b

12 Most Wired CountriesTop Countries in Internet Use at Year-End 1999Rank Country Internet Users (1,000s)

1 U.S. 110,8252 Japan 18,1563 U.K. 13,9754 Canada 13,2775 Germany 12,2856 Austrailia 6,8377 Brazil 6,7908 China 6,3089 France 5,696

10 South Korea 5,68811 Taiwan 4,79012 Italy 4,745

Source: http://www.c-i-a.com/200103iu.htm

Source: http://www.cybergeography.org/atlas/arpanet1.gif

Source: http://www.cybergeography.org/atlas/arpanet2.gif

Source: http://www.cybergeography.org/atlas/arpanet3.gif

September 1971

Source: http://www.cybergeography.org/atlas/arpanet4.gif

ARPANET, October 1980

Source: http://www.cybergeography.org/atlas/ansmap.jpg

Circa 1989

http://www.cs.bell-labs.com/who/ches/map/gallery/wired.gif

What You Will Findon 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 by @

• smith@csulb.edu

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

• E-Mail– BBC News | DOT LIFE | H@ppy

birthday to you

– Los Angeles Times: E-Mail Capability Changes Lives of Sailors Far Away

– The 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)

• http://www.w3.org/Addressing/Addressing.html

– Created with Hypertext Markup Language• Dave Raggett's Introduction to HTML• The Bare Bones Guide to HTML

Source: Netcraft

Total Number of Web Servers as of 8/00

Other

Microsoft iPlanetApache

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 .“

XML: A Simple Example

<customer-details id="AcPharm39156"> <name>Acme Pharmaceuticals Co.</name> <address country="US"> <street>7301 Smokey Boulevard</street> <city>Smallville</city> <state>Indiana</state> <postal>94571</postal> </address> </customer-details>

Source: Short Overview of W3C, XML, and RDF - slide "XML: A Simple Example"

A Model of Electronic Commerce

InformationGathering

Ordering Payment

A Model of Electronic Commerce

Fulfillment Serviceand Support

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

Manufacturer Warehouses RetailersSuppliers Consumers

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

Products Services

Material

Information

Steel, CementAutomotive

Consumer GoodsOffice Eqpt

Books, MagazinesNewspapersMusic CD’s

Videos

RestaurantsRetailing

Construction

On-line DataTelevisionEducationConsulting

[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.”