Unit 3 Essay: E-Commerce

BBA 3331, Introduction to E-commerce 1

Course Learning Outcomes for Unit III Upon completion of this unit, students should be able to:

5. Explain the four infrastructures influencing e-commerce strategy.

8. Examine the combination of hardware, software, and external systems that make up a site's architecture.

Reading Assignment Chapter 3: E-commerce Infrastructure: The Internet, Web, and Mobile Platform

Unit Lesson In Unit III, we delve into what actually makes up the Internet or the infrastructures supporting the World Wide Web. Every business needs an infrastructure that will support the day-to-day operations of the business and the needs of customer. In some regards, having an e-commerce business is no different than running a brick- and-mortar storefront—they both require an infrastructure that supports the business strategy. One of the key components of every e-commerce business model is the value proposition. This is what separates one e-commerce business from its competition. If the value proposition is to provide outstanding customer service while delivering a premium product, the business needs to know that it can provide and afford the infrastructure to support its value proposition (Traxler, 2012). It is easy for an e-commerce business plan to have a value proposition statement that declares the lowest price for a given product every day. However, if the infrastructure to support such a claim exceeds the cost of doing business, the company will lose all of its money and be unable to remain open for business (Traxler, 2012). An e-commerce business owner must have a better-than-average understanding of what infrastructure is needed to support the current business strategy. Business owners must have an ongoing understanding of how the Internet operates. Businesses must be able to adapt to changing market trends as well as the ever- changing web and mobile platforms (Traxler, 2012). There is nothing static about the Internet, and entrepreneurs must being willing and able to adapt to the changes occurring with the Internet. Also, being able to react quickly to market trends and to pressure from the competition are the types of things that need to change within a business’s infrastructure in order to adapt to such changes. The structure of the Internet economy is divided into four conceptual layers, and all layers are dependent upon each other (Laudon & Traver, 2015, p. 130):

UNIT III STUDY GUIDE

E-commerce Infrastructure

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Starting from the bottom up, we have layer one, the network technology substrates layer. At this layer, we see the service providers, backbone carriers, and last-mile-access companies. This is where the e-commerce business connects to the Internet. The responsibility for this layer stops at the demarcation point (DEMARC), which is the point where the provider connects the Internet to the business. Usually, such a connection includes a router or modem. The owner’s responsibility stops there (Rumble, 2009). A business owner would be well advised to shop around for the best provider, which often does not equate to the best deal. All the major internet service providers (ISPs) are required to lease a certain number of their connections to smaller providers. Often, the smaller providers will charge more and provide less incentives. Every business owner should ask the following question when leasing internet access: who owns the line the business is about to lease? The owner needs to understand what internet services are available and at what price. The determining factor would be how the company intends to use the Internet. This can be determined by the value proposition component of the e-commerce business model. At layer two, we see the transport services and representation standards. These include the TCP/IP protocol suites, IPv6, and IPv4. This is a very small layer and has little to do with any component of the e-commerce business model. This layer is used to support the TCP/IP suite of protocols. At layer three, we have our middleware services, files storage, security, and files systems. This is a critical area for e-commerce, and in the coming years, it will be very apparent how important this layer is for the industry. Also at layer three, we have cloud services—anything that can be stored locally on-site can also be pushed to the cloud. One example is web servers. An e-commerce owner can pay for hardware and software licensing and maintain his or her servers onsite, or the owner can lease the same hardware and software from a cloud provider. The upside to using the cloud option is the reduced costs of having to maintain, upgrade, and support the physical hardware. Also, having the business servers stored and maintained at a remote data center can be very cost effective (Tejada, 2014). As the Internet of things (IoT) becomes more prevalent, there will be more middleware products available to support the business needs of e-commerce business owners. The rapid changes at this layer require that the business owners have reliable vendors to provide the best advice on what middleware products would be best to support their current business strategy. As you are about to see, it is the middleware layer that ties layers two and four together (Tejada, 2014). At layer four, we have the client application layer, streaming video, e-mail, remote access, and web browsers. Layer four involves the desktop experience. This is where everything appears in a user-friendly output regardless if it is audio, video, or a web page. This is a key area for every e-commerce business, as this is where the end user (or customer) will meet the business and its products and/or services. Every decision made at layer one and layer three will affect what happens at layer four. We can see the importance of understanding the architecture of the Internet and how these four layers must be addressed within the eight components that make up every e-commerce business model.

Layer 4: Applications

Layer 3: Middleware Services

Layer 2: Transport Services and Representation Standards

Layer 1: Network Technology Substrate

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All the possibilities in the world cannot hold up to the limitation imposed by a lack of a modernized economy infrastructure. Since Internet growth is happening so fast, no amount of reconstruction nor renovation could possibly keep up with the rapid need. We must also realize what happens at one layer of the Internet economy infrastructure affects the other three. We now see this with the saturation of mobile technology applications. The use of mobile devices has saturated layers one, two, and three. With users at an all-time high and with revenue forecasts that are expected to nearly double by 2018, what could be limiting the future of the Internet is technology outrunning the architecture. There are four major areas that need to be addressed if the Internet is to continue on as it is (Laudon & Traver, 2012):

1. Bandwidth limitations: Bandwidth is a commodity. It is not infinite nor without end. Everyone wants more—users cannot access online content fast enough. So, the industry must be prepared to install new and improved network cabling that can handle the demands of the users. Also, the plan to install such improvements must begin with the backbone carriers and continue down through the system until it finally reaches the service providers. With today’s users wanting more, doing more, and achieving more, e-commerce businesses must avoid bandwidth limitations when possible. Fiber networks have been installed and available for users in select locations. However, these isolated networks quickly become saturated due to the high demand of users requesting faster access.

2. Quality of service limitations: Latency is the time it takes one packet to travel from point A to point B. This should not be confused with bandwidth, which is the highway on which the data packet travels. If the highway becomes congested, then we have latency. Although not terribly noticeable when receiving e-mail, latency typically occurs when users view streaming video.

3. Network architecture limitations: When we look at the limitations on Internet growth, it primarily comes back to the physical architecture that is in place. In other words, has the updated hardware reached both the end user and also the provider? For instance, users may have a fiber network near their houses, and it could be less than a quarter of a mile away. However, until the fiber network actually reaches them, they are confined to the limitations that accompany the slowest technology that still exists within the architecture of the network. For e-commerce business owners, that is another opportunity lost.

4. Wired Internet: From the service provider part of the infrastructure, being tethered to a wired connection is still how most of us connect. Wireless technology has not lived up to its full potential, which is evident by how saturated mobile networks have become due the growth of smart technology.

As an e-commerce manager, operator, and entrepreneur, you need to formulate a strategic plan that specifically addresses the four layers of infrastructure. The infrastructure must also address the potential impact of business operations as they relate to the Internet, the web, and the mobile platform. With the rise of capabilities on the Internet, we are just now beginning to see what the future has in store for e-commerce and its clients. Anything and anyone can access the Internet and be monitored: everything from our houses being wired to make the best use of electricity to our cars being monitored for potential problems and even to our health being monitored from afar. Modern technology provides end users with several conveniences; however, end users and their modern products could be confined to the limitations of their dependencies, such as the infrastructure of an e-commerce business or even the provider’s architectural hardware that supports its service. To combat these potential limitations for both the end users and also for the personnel operating an e-commerce business, it is vital to carefully plan an infrastructure that leads to successful experiences. If you can support talented personnel and maintain happy customers, you should be well on your way to a successful e-commerce business. It all begins by building a solid infrastructure.

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References Laudon, K. C., & Traver, C. G. (2012). 6 e-commerce marketing concepts: Social, mobile, local (8th ed.).

Upper Saddle River, NJ: Prentice Hall. Laudon, K. C., & Traver, C. G. (2015). E-commerce: Business. technology. society. (11th ed.). Upper Saddle

River, NJ: Pearson Education. Rumble, S. M. (2009 June 3). Network substrate. Retrieved from

https://ramcloud.atlassian.net/wiki/display/RAM/Network+substrate Tejada, M. (2014, December 22). The Internet of things and the middleware challenge. Retrieved from

http://pivotpoint.io/en-us/article/the-internet-of-things-and-the-middlewar Traxler, D. (2012, May 18). 7 key ecommerce-infrastructure decisions. Retrieved from

http://www.practicalecommerce.com/articles/3545-7-Key-Ecommerce-Infrastructure-Decisions

Learning Activities (Non-Graded) The following video provides some insight into what is referred to as the Internet of things: Techquickie. (2014, November 30). Internet of things as fast as possible [Video file]. Retrieved from

https://www.youtube.com/watch?v=BQzBpUdHvi4&feature=youtu.be The following video describes the details associated with TCP/IP protocol suite, which is the basis for layer two: Professor Messer. (2015, May 13). The TCP/IP suite-CompTIA network+ N10-006 – 5.2 [Video file].

Retrieved from https://www.youtube.com/watch?v=JCviqx8YjTQ&feature=youtu.be Non-graded Learning Activities are provided to aid students in their course of study. You do not have to submit them. If you have questions, contact your instructor for further guidance and information.