Get documents about "The Changing Face of E-Commerce
Document Sample
At first, people saw e-commerce
E-BUSINESS
as synonymous with online con-
sumer shopping (business-to-con-
sumer, or B2C). Success in that area
required search capabilities, graphic
portrayal of products, payment pro-
cessing functions, personalization,
and fulfillment, as well as concern
for privacy and security. New user
interfaces have been honed in the
B2C space, as have online functions
like auctions.
Public interest then shifted to con-
sumer portals, which aim to create
The Changing Face “stickiness” and encourage return vis-
its through engaging content (includ-
ing audio, video, and 3D images),
of E-Commerce: social interactions like chat, easy navi-
gation tools, and preferential access to
selected business participants.
Extending the Boundaries As it became clear that an order of
magnitude of more money would
move in B2B channels than in B2C,
of the Possible attention moved to interbusiness
commerce. B2B transactions are
dominated by high business value,
Stuart Feldman • IBM Institute for Advanced Commerce • sif@us.ibm.com long-term relationships, complex
business processes, intercomputer
communications (first EDI, then
E-commerce is growing at an expo- few months; if you want to use a dif- XML-based messaging), security, and
nential rate—literally. According to ferent currency (Canadian dollars, a multitude of transaction models.
one study, the Internet economy grew Australian dollars, Euros), just shift In a remarkably short time, B2B
at a rate of 174.5 percent annually the time base a little. portals morphed into exchanges and
from 1995 to 1998.1 This growth fol- An interesting fine structure under- more recently into complex market-
lows the equation lies this smooth curve. Much of con- places that combine aspects of negoti-
sumer buying is seasonal—think of ation, information, business processes,
Internet economy ∝ e year back-to-school textbooks, Christmas and social interaction. Marketplaces
toys, St. Valentine’s Day flowers. will provide basic support for auction,
almost exactly (remember, the natural Every so often a special event occurs search, payment, insurance, and secu-
log, e, = 2.718...). (such as the Super Bowl with its dot- rity, enabling participants to construct
A number of analysts forecast that com ads) that leads to a sudden jump highly profitable but more complicat-
the Internet economy will exceed US in e-commerce activity. Business-to- ed deals.
$1 trillion (1012) in 2002; Forrester business (B2B) commerce has grown In general, interest has expanded
Research (http://www.forrester.com) in a different way: When a large orga- from the limited functions of e-com-
recently predicted that the worldwide nization decides to use the Internet merce (consummating purchase trans-
Internet economy will reach US $6.9 for procurement and marketing (sup- actions on the Web) to much more
trillion in 2004. ply chain and customer relations), bil- general e-business (executing the
Media hype seems to follow a simi- lions of dollars are quickly added to many processes within and between
lar exponential curve. the Internet economy. organizations through networked
To provide satisfactory service computing systems). The next phases
Real Economic Change despite these cycles, ramps, and spikes, are likely to include mobile or perva-
Nonetheless, strong forces are driving we need new system, application, and sive e-business (m-commerce) and
real economic change. Minuscule network management approaches. interorganizational business (virtual
transaction costs, obliteration of dis- enterprises).
tance, and easy sharing of informa- Evolution of E-Business
tion all enable new ways of doing Investors and the media have focused Challenges and Changes
business. The explosive speed lets us on several areas in quick succession, This litany of evolutionary phases
be sloppy about details—if you don’t each with its own computing require- masks a number of growing technical
like a forecast, change the date by a ments. challenges, including
82 MAY • JUNE 2000 http://computer.org/internet/ IEEE INTERNET COMPUTING
E - B U S I N E S S
s security and authentication; agents that can react at any time from
trustworthy. Meeting the contradicto-
s content management and publica- any place. Yet businesses still need to
ry requirements of continuously avail-
tion; be sensitive to local requirements able, highly flexible, rapidly change-
s reliable systems, messaging, and because of cultural sensitivities, regu-
able software that is at the same time
data; latory differences, and infrastructure
perfectly reliable and stable calls for
s complex interactions and transac- capabilities. Strategic thinking is even
innovative techniques and tools.
tions; more important when goals involve Instead, most implementations today
s business model implementation more players and more rounds of depend on energy, skill, and luck.
and business process enactment; interaction, as is common when the Rather than buying and running a
and supply web becomes more complicat- piece of software, a firm can now access
s distributed processing and distrib- ed, and many alternative business an application through an application
uted data. deals are possible. service provider (ASP) or business
There has been a rebirth of interest
process outsourcer (BPO) over the Net,
High-end sites may handle hundreds in game theory. New approaches to and use it as a short-term transaction or
of thousands of hits per minute, pre- marketing, such as targeting individual
as part of a long-term relationship.
sent and update catalogs Although dynamic access to
with many millions of services (including discov-
items, collect tens of giga- ery, ad hoc workflows, and
bytes of behavioral data per As the cost and delay of late binding) is a staple of
day, run hundreds of sepa- messaging become negligible, research in distributed
rate processes or businesses computing and network-
simultaneously, and utilize negotiation and competitive ing, only now are business
thousands of processors to bidding can be the norm rather cases starting to close and
carry the load. enormous bets being
Technical changes are than the exception. placed. Once specific ser-
enabling new ways of doing vices are easily outsourced,
business. As the cost and more complicated multi-
delay of messaging become company projects and vir-
negligible, negotiation and competitive customers at specific moments based tual enterprises will be feasible.
bidding can be the norm rather than on very recent behavior or when they The technical demands will be
the exception. Web technologies like are physically near a store, become enormous—and exciting. Researchers
authentication, standard messaging, profitable when new types of informa- are extending the boundaries of the
and rapid data sharing already support tion (such as customer clickstreams) possible in many areas of computing.
spontaneous, secure, and multiparty are available, but first patterns must be In coming issues, this column will
interactions among businesses. Groups extracted from terabytes of data (some examine these stresses and their likely
of consumers can band together as high-end companies already apply or hoped-for solutions. s
easily as guilds of sellers, with the help rudimentary forms of this analysis).
of discovery technologies and online REFERENCE
databases. Innovative forms of pay- Re-envisioning Software 1. The Internet Economy Indicators,
ment and finance are being intro- Development Indicators Report, June 1999, available
duced to meet new needs. New inter- The accelerating tempo of business online at http://www.internetindicators.
mediary services will add value by and the pressure to get to market com/features.html.
accumulating and analyzing informa- quickly are also revolutionizing the
tion and using it to simplify technical way commercial software is built and Stuart Feldman is director of the IBM Institute
and business problems. Intelligent managed. Some companies revise their for Advanced Commerce, and manages a
agents will finally earn their keep by entire business model every six research staff of more than 80 researchers
providing such services. months—faster than they can redesign in network-related technologies including
Of course, good business tech- their software by traditional means. e-commerce, Internet media, and antivirus
niques are still important, and their Such firms must balance compressed systems. Feldman is an IEEE Fellow, an
effects are amplified by Web tech- software development with customer ACM Fellow, a member of Phi Beta Kappa
nologies. The marketplace is now satisfaction. On the other hand, when and Sigma Xi, and is Chair of ACM
truly global and simultaneous, with significant sums are at risk, parts of SIGecom. He recently joined the editorial
buyers, sellers, intermediaries, and the application must be thoroughly board of IEEE Internet Computing.
Check out IC Online’s Events calendar for links to conferences of interest to IC readers.
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IEEE INTERNET COMPUTING http://computer.org/internet/ MAY • JUNE 2000 83
