Introduction to E-commerce : Unit 1 Assignment Power Point

BBA 3331, Introduction to E-commerce 1

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

1. Describe the history of the Internet. 1.1 Identify the evolution of e-commerce from its early years to today.

Reading Assignment Chapter 1: The Revolution Is Just Beginning

Unit Lesson In Unit I, we look at the chronicle history and the milestones of e-commerce over the last 40 years. To understand how far the Internet and the World Wide Web have come, we must first review the history. As with so many of the things we now take for granted, much of the technology in our lives started out as something completely different. For this lesson, the history of the Internet begins in 1969 with a connection between the University of California Los Angeles and the Stanford Research Institute under a grant by the U.S. Department of Defense Advanced Research Projects Agency (ARPA). This was the first time two computers communicated over a 50-kbps link using packet switching technology and TCP/IP. This was the beginning of ARPANET (Abbate, 1994). The idea for ARPANET was first conceived in 1967, when four major universities exchanged data-processing facilities among themselves. It later grew to include other universities, military installations, and other research centers being funded by ARPA (Weber, 2009). In 1973, ARPANET had 35 members. In 1978, the U.S. National Science Foundation created a non-military network for American universities. In 1981, APARNET was opened up to all users until its decommissioning in 1990 (Weber, 2009). The history of the Internet should not to be confused with the history of the World Wide Web, as they are two different animals. Although these two terms are often seen as interchangeable, they mean different things. The Internet refers to the massive network of smaller and larger interconnected networks that make up the infrastructure used to move data from one end of the Internet to the other. This massive infrastructure uses the TCP/IP protocol suite, which was developed in the late 1960s for ARPANET, to accomplish this (Gil, n.d.). The World Wide Web is how we communicate and share information over the network infrastructure that makes up the Internet. The World Wide Web rides on top of the Internet via the HTTP protocol that is used to render webpages via a browser. The Internet also carries email, file sharing, phone traffic, and other data not related to the World Wide Web (Gil, n.d.). The World Wide Web was introduced by CERN in 1989 and released under open license to the public in 1993 (“The Birth of the Web,” 2013). Next, let us fast forward to present day. In 2015, the Internet reached 3.17 billion users, with approximately 354.6 million of those users over the age of 15 living in China and the U.S. coming in second with 194.7 million. These numbers are important when we discuss the connection between the Internet and e-commerce. In 2014, the global Internet advertising revenue totaled approximately 117.2 billion U.S. dollars, and that number is expected to increase to 194.5 -billion U.S. dollars by 2018 (Statista, n.d.). E-commerce is all about making money and selling products, goods, and services over the Internet by using the World Wide Web. We can all appreciate how far technology has come in helping consumers connect to the Internet. For example, today’s smartphones are 100 times more powerful than the fastest personal

UNIT I STUDY GUIDE

The History of the Internet as

It Relates to E-commerce

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computer that was available in 1995. Smartphones have more memory, faster processors, and better video resolution than any computer built in 1995, and at a fraction of the cost. Cisco and other hardware manufacturers have built larger routers and faster switches to quadruple the bandwidth for our homes and businesses many times over. The cable and telecom companies are now delivering fiber optic cabling to our homes and businesses. Instant gratification is what brought about all this innovation. If anyone is contemplating starting an e-commerce business, that will be one of the primary considerations for starting an online venture. Your website has to be quicker, better, and provide innovation, or someone else’s website will. Ten years ago, Netflix made millions of dollars by delivering movies to homes. Today, delivering a DVD movie to a mailbox is old news. If you are not streaming your video content, you are ancient history (Ochman, 2012). Again, instant gratification is what spawned e-commerce. People may think that their smartphones are products of needing to check their emails and continuously texting their every movement; however, smartphones have more to do with having instant access to products and services (Wise, 2014). The technology takes us to the Internet, while the World Wide Web provides the access to various online content. However, without the development of secure online credit card transactions, there would be no e-commerce. The giants of commerce saw little, if any, future in e-commerce unless they could figure out a way to separate the consumers from their money through a secure transaction. Plus, they wanted the transaction to embrace instant gratification—a real-time transaction. The dream existed, but the technology did not, until someone developed the first secure credit card transaction program (Chen, Zhang, & Zhang, 2008). No one was going to use their credit card for anything on the Internet until they could be assured that the transaction was safe. No business on the Internet was going to accept a credit card until they could be assured that the transaction was legitimate. For both the consumer and the business, this had to be done in as close to real time as possible. The problem was how to provide a service for credit cards that could do all three (Techtarget, 2014). The first credit card transactions were sent using either Telnet or just plain text over the web. We have to remember that the Internet was founded to allow computers to communicate with each other, not humans. Since computers did not lie, steal, or cheat, there was no need for any secure communication protocol. It was not until humans started communicating with each other over the Internet that secure transmission protocols were needed (Techtarget, 2014). The first two secure transmission protocols, secure HTTP (HTTPS) and Secure Socket Layer (SSL), were developed primarily for secure e-commerce transactions. These allowed users to type their credit card information into a normal HTML document and have that information encrypted as it traveled across the open Internet (“Security: Secure Internet Data,” 2002). Visa and MasterCard were the first to develop a secure credit card transaction process that could be used across open networks such as the Internet. This process was called Secure Electronic Transactions or SET for short. Since the development of SET, other means of securing credit card transactions have been developed to keep pace with the threat of cybercrime. Conclusion Just about everything that has do with e-commerce was created out of a necessity to allow for the uninhibited economic growth of the Internet. Retailers, credit card companies, suppliers, and consumers all saw the unlimited potential of e-commerce. We can think of the Internet as the California Gold Rush of the 1880s, yet without any physical boundaries and with plenty of endless opportunities. There is always more gold being found by those who develop an innovative solution or product to be sold over the Internet by using an e-commerce site.

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References Abbate, J. E. (1994). From ARPANET to Internet: A history of ARP-sponsored computer networks, 1966-

1988. Dissertations available from ProQuest. Retrieved from http://repository.upenn.edu/dissertations/AAI9503730/

Chen, Q., Zhang, C., & Zhang, S. (2008). Secure transaction protocol analysis: Models and applications.

Lecture Notes in Computer Science, 5111. Gil, P. (n.d.). What is the difference between the Internet and the Web? Retrieved from

http://netforbeginners.about.com/od/internet101/f/the_difference_between_internet_and_web.htm Ochman, B. L. (2012). Get ready for a new era of e-commerce in 2013: Instant gratification. Retrieved from

http://adage.com/article/digitalnext/ready-a-era-e-commerce-2013-instant-gratification/238666/ Statista. (n.d.). Number of worldwide Internet users from 2000-2015 (in millions). Retrieved from

http://www.statista.com/statistics/273018/number-of-internet-users-worldwide/ Security: Secure Internet data transmission. (2002, October 16). Retrieved from

http://www.windowsecurity.com/whitepapers/misc/Security_Secure_Internet_Data_Transmission.html Techtarget. (2014). Secure sockets layer (SSL) definition. Retrieved from

http://searchsecurity.techtarget.com/definition/Secure-Sockets-Layer-SSL

Learning Activities (Non-Graded) Have you ever heard someone ask the following question: What exactly is e-commerce? Well, this video provides a very clear explanation for e-commerce: Technerd StepByStep. (2013). What is e-commerce? (Simple!) [Video file]. Retrieved from

https://youtu.be/AhgtoQIfuQ4 The following video compares the terms e-business and e-commerce. It is helpful to know the difference, so consider watching the video: Furas, T. (2015). E-business vs. e-commerce [Video file]. Retrieved from https://youtu.be/GW8gWZZsLZI It is always great to hear an explanation from different perspectives, so here is one more video that explains e-commerce: My channel. (2011, November 19). What is ecommerce? [Video file]. Retrieved from

https://youtu.be/3wZw2IRb0Vg 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.