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Introduction to Internet Business

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What is E-business really? How can you use the paradigm of E-business? Learn the answers to these questions and many more.

With the publication of the Starr report on Monica Lewinsky, which was first released online, the Internet established itself as a mainstream medium. And now the internet is advancing to support more advanced functions such as commerce and customer management. In this introductory chapter of his world-renowned book, The E-Business (R) evolution (1999, Prentice Hall PTR) , Daniel Amor introduces the opportunities and challenges we will face in the e-business arena.

1.1 Being Online

1.1.1 The Basics

Flashback. When I first got in contact with the Internet in 1992 it was still a quiet place. Apart from sending and receiving e-mail, downloading software via FTP or chatting via "IRC," "talk" and "nn," there was not much one could do. Programs like "Archie" and "Gopher" were en vogue and using the Internet required a lot of Unix knowledge. All I had at that time was an ASCII-Text terminal that was connected via "telnet" to a HP Apollo Workstation. I did not have a web browser, because no browser software had been invented yet. Besides the Internet there were other computer networks, like the Fidonet that were far more attractive at that time because they had a colorful interface to the user.

Today, I start up my laptop and use a web browser to connect to the Internet, either via the Local Area Network (LAN) at work or via the modem at home and am able to do all I did in 1992 and even more. Fidonet is still around, but its popularity has decreased a lot since the early days and most of it has been incorporated in the Internet over the last few years, just like most other computer networks, like BitNet and MausNet.

With this simple-to-use browser, I am able to do my e-mailing, up- and download of software, use online chats and search for keywords on the Inter-net. I am able to check my balance at the bank and buy flowers online. All services can be accessed with this single piece of software.

The software has become so easy to use that non-technical people have e-mail addresses. They buy and sell goods online. Exact figures are not available for the Internet. Neither do we know how many people are online nor do we know how many businesses there are. This is because of the structure of the

Internet. It is different to anything we have seen before. Traditional methods of measuring audience just do not work anymore. With all other types of media the number of offerings is limited by region, for example 40 television stations or five larger newspapers for Tuscany, Italy. Counting viewers or sales is relatively easy, as the number of newspaper stands and televisions is limited in the region. This makes it easy to define prices for the advertising sections. On the Internet we have unlimited space and resources. People from Tuscany may choose from one of the 40 TV stations or choose any location in cyberspace. And everybody who wants to appear as someone who lives in Tuscany can do it by using masquerading techniques (choosing another virtual identity).

For the first time in the history of mankind a mass media has more offerings than potential users. And not only that: for the first time everybody is able to interact. People are able to change content, add information, link resources to logical structures and offer them to others. On TV we have a limited set of channels, on the Internet users have their own channels, moving through cyberspace at their own pace and in their own direction, guided only by their interest and curiosity. On TV, normally, one can watch one program at a time, on the Internet you can watch multiple web pages at a time. Sometimes I have more than forty browser windows open and flip through them while searching for something very specific or comparing something. There is no way to tell how much time I spent on a particular page or on the other.

It will be just a matter of years before everyone will be present on the In-ternet. The fear that it will replace real-life is unnecessary. Just as TV has not replaced the radio and books, the cyberworld won't replace the real world. But it will add a new dimension to human life, no doubt. The dream of the global village will eventually become reality. Everything and everyone will be only a click away. Prices for hardware and software are dropping making them available to the poorer people in the world, too.

1.1.2 Distant Learning

The University of Amsterdam has already created special online lectures for people who are not able to attend the regular lectures in Amsterdam. The Network University (TNU) is a large scale project that aims to provide highly interactive, innovative Internet based distance learning to a global audience who opt for the advantages of a new form of academic education. The target group for this service are physically disadvantaged students and students from overseas, mostly from Africa and Asia, who are able to pay for the lectures. Some students may also not be able to pay to live in Europe, though, or may not be able to get a visa for the Netherlands. Through new Internet communication technologies and standard web pages the virtual lecturer talks to the students who in turn are able to communicate with the lecturer via the Internet and telephone.

The master's degrees offered by TNU will be rooted in an interdisciplinary approach to the social sciences. It will be distinguished by their full use of the Internet as a medium providing access to vast amounts of information as well as a channel of communication that facilitates new ways of learning. The participants of TNU will not be at the receiving end of a one-way communication process but, through the mediation of technology, will actively contribute to the content and future development of the programme. The online learning process will be supported by access to an Internet-based "content call-center" that will offer 24-hour supervision and feedback. This feedback will eventually be offered in different languages.

Interactivity, global reach, the multi-lingual and multi-cultural approach and the nearly 100 percent availability are the key to success in this project. Especially with students from all over the world who live in many different time zones.

1.1.3 Space and Time on the Internet

The reasons for a success on the Internet is radically different to what we have seen in the past in business. It is not anymore the bigger fish swallowing the smaller fish, nor is it the faster runner beating the slower runner. In the information society the more knowledgable is making more deals than the less informed. Knowledge is quality and this is were the business is heading for.

Nicolas Hayek, the president of the Swatch Group, which produces the highly successful watch "Swatch" has created a new time standard. Instead of dividing the day into 24 hours, in the Internet age a day is made out of 1,000 Swatch Beats. The Internet time uses its own meridian, the Biel Mean Time (BMT), named after a town in Switzerland. One Swatch Beat equals 86.4 seconds.

Although many people may think that the Internet time is a gag, it reflects the way work is done in the digital age. Instead of serving your customers from nine to five, the customers are served around the clock, whenever a customer feels like needing a product or service. Time zones and geographical boundaries have no importance anymore. Once someone has gone digital, everything is now and here. Although time zones are important for people to communicate with each other, it has become irrelevant for business. No matter if it is five o'clock in Boston or ten o'clock in Nairobi, the customers on the Internet want to receive the goods, information or service they have requested.

Through the Internet everything moves closer together, resulting in nearly zero response time and almost no distance. As the Internet is getting faster every day through new inventions and new programs, such as the Internet 2 initiative in the United States, every company will be as fast as its competition and just as near as the competition. Distance, size and speed become irrelevant. In order to be successful the service needs to be better than the competition. Quality of service becomes the ultimate success factor.

Through the Internet everyone is able to offer any service at maximum speed (converging to a delivery time of zero). As everyone is able to reach maximum speed, it does not make sense to try to be faster than the competition. A choice is not made anymore on the above mentioned factors, but mainly by choosing a brand, which has a positive image and a good quality. This simpli-fies the lives of the customers. Instead of choosing the objective best product, they choose the subjective best product.

The Internet reduces the three dimensions of the world and time to a single point, to the here and now of the customer. All customers have their own universe, which needs to be addressed when offering goods, information or services online. Through personalization the universe of the Internet appears differently to everyone. The Internet is constantly changing; making change the only constant one can count on. Products, ideas and prices, for example, are changing much faster than ever before, making them float.

1.1.4 The Web Is Not the Internet

Many people confuse two terms that are related but not identical in meaning. The Internet, which evolved from the military ARPANet has its roots in the 1960s. It's basic idea was to create a network that would continue to work as a whole, when parts of it collapse. The Internet means a network infrastructure that is built on certain standards, the Internet standards, which are used by all participants to connect to each other. The specification of the Internet protocol (IP) does not specify which type information, services or products should be exchanged. The IP defines how the flow of information is organized. Chapter 3 contains more information on IP and related standards.

These specifications reside on a layer above the Internet layer and one of these protocols for the exchange of information is the World Wide Web with its hyper-text transfer protocol (HTTP). Besides the World Wide Web there are other protocols that enable people to communicate via e-mail (POP3, SMTP, IMAP), chat online (IRC) or participate in newsgroups (NNTP). The web offers the exchange of documents via HTTP which are mainly in the HTML format, allowing browsers to display the content in the correct way.

The World Wide Web is just one the numerous services offered on the In-ternet and does not specify, if a certain web page is available on the Intranet, Extranet and Internet. It provides a simple-to-use interface that allows people with very little knowledge in computing to access web services all over the Internet. These web services including content, products and services, which can be viewed or ordered through the web browser. The web browser is a synonym to the first generation of the commercial Internet. It allows customers to self-service themselves over the web. The second generation of commercial

Internet usage will move away from "do-it-yourself" to "do-it-for-me." This new paradigm, also known as pervasive computing, will automate many processes customers were using web browsers for. Pervasive computing is still a vision and will take still quite a while to become reality. Therefore browsers will remain important over the next few years.

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