Kip Becker, Ph.D Boston University GLBTRADE@BU.EDU HTTP://WWW.BU.EDU/GLOBAL

1. Kip Becker, Ph.D Boston University GLBTRADE@BU.EDU HTTP://WWW.BU.EDU/GLOBAL

2. Will the internet increase service productivity ? Productivity in Goods and Services 1960 - 94 Commercial Goods Sector (Annual Index of output per Person – Hour, 1960=100) Commercial Services Sector

4. IN GROUPS IS EBUSINESS A BRIDGE FROM OLD WAY OF BUSINESS TO NEW OR JUST ANOTHER TOOL?

5. Technology-mediated exchanges between parties as well as electronically-based intra- or inter-organizational activities that facilitate such exchanges WEBONOMICS LETS TAKE A LOOK AT DIFERENT ATTRIBUTES

6. Understanding E-commerce: Organizing Themes • Technology: Development and mastery of digital computing and communications technology • Business: New technologies present businesses and entrepreneurs with new ways of organizing production and transacting business • Society: Intellectual property, individual privacy, and public policy

7. Lets Look At 4 Infrastructures • Technology infrastructure: This is both an enabler and driver of change.The hardware backbone of computers, routers, servers, fiber optics, cables, modems, etc. provide half of the technology equation.The other half includes the software and communication standards including the core protocols for the www. • Capital Infrastructure: Deals with getting the money to launch new businesses and finding the right people to build the business plan and seek funding sources.

8. 4 Infrastructures • Media infrastructure: The e-commerce managers must make choices about the types of media employed(e.g., print, audio , video), the nature of the media and editorial policy(including style, content, look and feel). • Public Policy Infrastructure: All the decisions related to strategy, technology, capital and media are influenced by laws and regulation, i.e., public policy decisions. It not only affects specific business but also direct and indirect competitors.

9. A BRIEF HISTORY • Internet’s beginnings traced to memos written in 1962 MIT’s Joseph Carl RobnettLicklider outlining the galactic networking concept • Great advances made in network technology 1960s • To connect computers &permit transfer of information locally, many organizations installed Local Area Networks. LAN technology limited distance • To allow computers and networks separated by larger distance to communicate ARPA (Advanced Research Projects Agency) developed a Wide Area Network (WAN) called the ARPANET • (WHY DO THIS ?)

10. THE WEB PROGRESSES • 1989–1991: Web “invented” - Tim Berners-Lee at CERN • 1993: Marc Andreesen /Others at NCSA create Mosaic, Web browser with GUI that runs on Windows, Macintosh, or Unix • 1994: Andreessen, Jim Clark found Netscape; create first commercial Web browser, Netscape Navigator • August 1995: Microsoft introduces Internet Explorer, its version of Web browser Lets take a look at some of the early players

11. Communication Formats similar Development WWW • Like internet radio began as communication medium • Really the first WWW • Early medium known as wireless telegraphy/ telephony; radio’s point-to-point wireless messaging ARMY CONTROL • Demand for radio broadcasting surged in 1922 - shifted from a point-to-point communication tool to broadcast medium • During 1920s, all 48 states in the US had at least one radio station • By 1925, 27 of the original 48 stations were out of business • Revenue sources such as programming subsides from radio-set sales, radio taxes, generalized goodwill for corporate sponsors and advertising emerged as new revenue generation models • The pay for service revenue model allowed radio to compete with telegraph and cut the price of telegraph by 30% FAMILIAR ? • BUT THEN WHAT HAPPENED?

12. NOT ONLY THE DOT COM’S HAD DIFFICULTIES 1912 Titanic WW1 US Navy rights to airwaves 1919 RCA - Revenue Model 1922 576 stations - open to all - By 1925?

13. The Web Got Ahead of Itself • BUT first quarter of 2001, online sales only about 1 percent of all retail sales • WHAT ARE SOME REASONE why Americans weren’t ready to do more Web business: • Poor service and high prices • Too much to choose from • Inconsistent technology

14. BUT THEN.. WEB SALES SURGED

15. The Growth of B2C E-commerce SOURCES: Based on data from U.S. Census Bureau, 2007

16. The Growth of B2B E-commerce SOURCES: Based on data from U.S. Census Bureau, 2007

17. The Growth of Web Content SOURCE: Based on data from Google Inc., 2007.

19. Pure Vs. Partial Electronic Commerce • THREE DIMENSIONS • the process [physical / digital] • the product (service) sold [physical / digital]; • the delivery agent (or intermediary) [physical / digital] • TRADITIONAL COMMERCE • all dimensions are physical • PURE EC • all dimensions are digital • PARTIAL EC • all other possibilities include a mix of digital and physical dimensions

20. ORGANIZED CHAOS THE INTERNET INFRASTRUCTURE Who Runs It? How does it Run? NETWORKS TO NETWORKS OR

21. Types of Interorganizational Systems • Electronic data interchange (EDI) over Value Added Networks (VANs) • Extranets • Electronic funds transfer (EFT) • Integrated messaging systems • Shared databases • Electronically-supported supply chain management

22. EC CONNECTIONS Internet • A global networked environment is known as the • A counterpart within organizations, is called an • An extends intranets so that they can be accessed by business partners. • Intranet extranet • Is INTERNET and W3 same thing?

23. What are Characteristics allow shared access of data • Unique identification each computer network of millions of computers - thousands networks.. Important each computer be uniquely identified Internet Protocol(IP) address. 198.108.95.145 2. Human-friendly addressing Domain Name System(DNS) gave address recognizable letters & words instead of IP address. bu.edu/GoGlobal 3. Packet Switching Remedy delays associated unequally sized data transfers, instead of transferring files in their entirety, whole files broken into data packets before transferred over network • Routing Dedicated, special-purpose computers which serve as an intermediary between networks. Route packets efficiently through networks and are building blocks of the internet. Packets used TCP software insures safe delivery of packets

24. Internet Protocols • Protocols - A set of rules that determine how two computers communicate with one another over a network • The protocols embody a series of design principles • Inter-operable—the system supports computers and software from different vendors. For e-commerce this means that the customers or businesses are not required to buy specific systems in order to conduct business. • Layered—the collection of Internet protocols work in layers with each layer building on the layers at lower levels. • Simple—each of the layers in the architecture provides only a few functions or operations. This means that application programmers are hidden from the complexities of the underlying hardware. • End-to-End—the Internet is based on “end-to-end” protocols. This means that the interpretation of the data happens at the application layer and not at the network layers. It’s much like the post office.

25. ONE OF THE MOST IMPORTANT PROTOCOLS TCP/IP Solves the global internetworking problem • Transmission Control Protocol (TCP) • Ensures that 2 computers can communicate with one another in a reliable fashion • Internet Protocol (IP) • Formats the packets and assigns addresses • packets are labeled with the addresses of the sending and receiving computers • 1999 version is version 4 (IPv4) • Version 6 (IPv6) has just begun to be adopted • WILL ALLOW 1 QUADRILLION COMPUTERS TO BE CONNECTED TO INTERNET!! THIS IS THE HOME “SYSTEM” NETWORK

26. NETWORK OF NETWORKSWHAT CONSITITUTES THE NETWORKS? • NSPs • “BACKBONE” NETWORK SERVICE PROVIDERS\ MCI, PSINET ETC. • NAPs • NETWORK ACCESS POINTS/ PACIFIC BELL NAP IN SANFRANCISCO & AMERITEC NAP CHICAGO • ISPs • INTERNET SERVICE PROVIDERS • EXCHANGE DATA NSPs AT NAPs • ROUTERS • MAPS TO INTERNET FOR PACKETS TO FOLLOW/ CISCO MAJOR PROVIDER OF HIGH SPEED ROUTERS

27. 2001: Jan 30 Egypt lost 70% + ½ western India's outbound crashed downing outsourcing industry. 75m from Algeria to Bangladesh disrupted or cut off. Feb 1 Cable cut west of Dubai Middle East service again severly disrupted.

28. END OF INFRASTRUCTYREAND HISTORY 