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This chapter is from the book

Emergence of Services: Outsourcing as a Way of Life

One of the most interesting aspects of the Internet evolution is the proliferation of new and different services, so much so that the "service provider" label is now a standard part of the Internet vernacular. Starting with Internet Service Provider (ISP), we have seen the emergence of the Application Service Provider (ASP for networked applications), Content Service Provider (distribute centralized content), Customer Service Provider (CSP), and so on. Fundamentally, the Internet allows merchants to expand value in modular and spatially distributed ways. Each module of service, as we will see, gives rise to a set of vendors specializing around that service. Thus, it is no longer necessary or even prudent to consolidate one's physical and human resources in company-owned and operated locations.

Growth of data centers mean that corporate servers can be located outside a company's IT center, gaining several strategic advantages for both host and hosted. ERP (enterprise resource planning) software vendors foresaw the Web-enabling wider use of their applications, expanding their markets. Similar services are now available for desktop office applications, further reducing the burden on in-house IT staff.

In addition, a variety of third-party marketing services are available, such as DoubleClick and AdForce, for launching online advertisements and Responsys.com for email marketing. Other examples of services are BizRate for customer satisfaction monitoring, SalesForce.com for sales contact management, BeFree.com for affiliate recruitment, and Employease.com for human resource management.

Services are so important to articulation of business models, evolution of community, and handling transactions and payments that they are a common thread that runs through this book. Services touch on every aspect of electronic commerce, perhaps like in no other form of commerce. In many sectors of electronic commerce, the service providers are those who are selling picks and shovels to the miners, a reference that harkens back to the Gold Rush days and mentioned previously. In the 1850s, megafor-tunes were made by a jeans manufacturer, a stage coach line, and a bank formed by an immigrant from Italy (Levi Strauss, Wells Fargo, and Bank of America) while many of the gold miners ended up penniless and with no legacy at all.

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