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eCommerce Technology 20-751 Lecture 1: eCommerce Technology Overview

eCommerce Technology 20-751 Lecture 1: eCommerce Technology Overview. Course Administration. Instructor: Michael Shamos ( shamos@cs.cmu.edu ) Teaching assistant: Saumitra Das ( smdas@andrew.cmu.edu )

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eCommerce Technology 20-751 Lecture 1: eCommerce Technology Overview

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  1. eCommerce Technology20-751Lecture 1:eCommerce Technology Overview

  2. Course Administration • Instructor: Michael Shamos (shamos@cs.cmu.edu) • Teaching assistant: Saumitra Das (smdas@andrew.cmu.edu) • Course web page: through Blackboard or http://euro.ecom.cmu.edu/program/courses/tcr751/official.shtml • Slides posted on web page the night before lecture • 14 lectures, 4 homeworks, 1 final exam • Grading • Homework 40% (10% each) • Class participation 10% • Final exam 50%

  3. Working Together • You may (and should) study together and discuss homework • You should surf the Web to learn more about course topics • BUT: ALL WORK YOU SUBMIT MUST BE YOURS ALONE • You must list the names of the people you worked with • You must give credit for any material that is not yours • If you need to include material from another source, state exactly where it came from (give URL, etc.) • DO NOT ATTEMPT TO COPY MATERIAL FROM WEB PAGES AND SUBMIT IT AS YOUR HOMEWORKYou will be caught. Your career will end. Fast. • Penalties for violation: zero credit, course failure, expulsion • See University Policy on Cheating and Plagiarism

  4. What is Commerce? • Middle French, from Latin commercium, fromcom-(together)+ merc-(merchandise) (1537) “The exchange orbuying and selling of commodities on a large scale involving transportation from place to place.” • Buying and selling ( transactions ) • Large scale (  scalability) • Transportation ( supply chain ) • Every business process in the world must bere-engineered: “Can it be made electronic?” NEED TECHNOLOGY TO SUPPORT ALL OF THESE

  5. Commerce (8000 B.C.) BUYER FINDS SELLER SELECTION OF GOODS NEGOTIATION SALE PAYMENT DELIVERY INFORMATION POST-SALE ACTIVITY PHYSICAL+ INFORMATION

  6. eCommerce SOME TECHNOLOGIES USED: SOME INFORMATION GATHERED: SEARCH ENGINE SEARCH BEHAVIOR BUYER FINDS SELLER ON-LINE CATALOG BROWSING BEHAVIOR RECOMMENDER AGENT CUSTOMER PREFERENCES CONFIGURATOR SELECTION OF GOODS EFFECTIVENESS OF PROMOTIONS SHOPPING BOT BARGAINING STRATEGIES AGGREGATOR PRICE SENSITIVITIES INTERNET NEGOTIATION AUTOMATED AGENTS PERSONAL DATA TRANSACTION PROCESSOR SALE MARKET BASKET DATA INTERCHANGE CREDIT/PAYMENT INFORMATION CRYPTOGRAPHY PAYMENT E-PAYMENT SYSTEMS DELIVERY REQUIREMENTS DELIVERY TRACKING AGENT ON-LINE PROBLEM REPORTS ON-LINE HELP INFORMATION POST-SALE ACTIVITY CUSTOMER SATISFACTION BROWSER SHARING PHYSICAL+ INFORMATION FOLLOW-ON SALES OPPORTUNITIES INTERNET TELEPHONY

  7. Marketplace Examples • Corporate portal (UTC vs. hyperbolic tree) • Shopping search (buyersindex.com) • Electronic auctions (eBay) • Pure eCommerce (Corbis images, MP3)

  8. GOODS MONEY Plan Source Make Deliver Source Deliver Make Supplier Customer Customer’sCustomer Your Company (internal or external) (internal or external) Source Make Deliver Deliver The Electronic Supply Chain INFORMATION Source Suppliers’Supplier CORPORATE BOUNDARIES SOURCE: A. BIFFI, PF. CAMMUSONE

  9. Why eCommerce? Why Now? • Computers are faster • 1972: 1 million instructions/sec • 2002: 1 billion instructions/sec • Have more main memory • 1972: 0.125 megabytes • 2002: 512.0 megabytes • Cost less • 1972: $4,000,000 • 2002: $1,000 • Speed/size/cost improvement factor: 16 billion

  10. Progress of Technology IMPROVEMENT: 8000 x • Have more disk storage • 1971: 10 MB • 2001: 80,000 MB (soon 1 terabyte = 1000GB) • Higher communication speeds • Human speech: 30 bits/sec • 1971 Modem 300 bits/sec • 2001 Modem: 56,000 bits/sec • T1 line: 1,544,000 bits/sec • Internet 2: 1,000,000,000 bits/sec • Nortel: 2,000,000,000,000 bits/sec in 1 fiber (entire U.S. telephone traffic) 1971-2001 IMPROVEMENT: 6 BILLION x

  11. eCommerce Technology • Infrastructure • Data interchange • Wireless technologies • Web content delivery • Web Architecture • Mass personalization • Search engines • Data mining • Access security • Intelligent agents • Cryptographic security • M2M commerce • Electronic payments

  12. eCommerce Infrastructure • What worldwide structure is required to support eCommerce? • Network + communications • Machines • Software • Protocols • Security • Payment • interface to banking systems

  13. The Internet • The fundamental technology linking business and people around the world in less than 1 second • Nothing competes with it • How does it work? • How big is it? • Who owns it? Who governs it? • How does it grow? How big can it get? • What architecture allows this? • What are the limitations?

  14. The Internet • Protocols (TCP/IP, HTTP) • Addressing schemes • Domain names, nameservers • URLs • Browsers • Programming • HTML, JavaScript, Perl, Common Gateway Interface (CGI) • Java, Python, JSP, …

  15. Web Architecture How are web sites constructed? TIER 2 Server TIER 1 TIER 3 Applications TIER 4 Database SOURCE: INTERSHOP

  16. mCommerce • eCommerce independent of physical location • Anything, anytime, anywhere • Which devices? • What is the technology? • How to merge the telephone, cellphone, and cable networks with the Internet? • Is it possible? • How much mobile eBusiness will be conducted? • How will it affect daily life and economics?

  17. Wireless Technologies • Can’t get (much) away from radio • Differences between wireless and wired communication • Cells • Shared medium: SDMA, FDMA, TDMA, CDMA • Frequency allocations • 1G, 2G, 2.5G, 3G, 4G • Wireless LAN: IEEE 802.11 • Bluetooth • WAP, iMode

  18. Search Engines • Finding web pages • Crawlers, spiders, bots • Query interfaces • Retrieval methods • Indexing • Document ranking • Spamdexing • Artificially altering retrieval order • Document clustering • Multilingual issues • Multimedia retrieval

  19. Access Security • Access control • authorization / authentication / identity verification • Authentication • something you know: passwords • something you have: smart card • something you are: biometrics • someplace you are: GPS • Network protection, firewalls, proxy servers • Intrusion detection • Denial of service (DOS) attacks • Viruses, worms

  20. Cryptographic Security • Secrecy • information cannot be used if intercepted • Authentication • We’re sure who the parties are • Integrity • data cannot be altered • Non-repudiation • sender cannot deny sending • Cryptography • symmetric encryption (DES, Rijndael) • public key cryptosystems (RSA) • digital signatures & certificates, public key infrastructure (PKI)

  21. Electronic Payments • Forms of money • token (cash), notational (bank account), hybrid (check) • Credit-card transactions • Secure protocols: SSL, SET • Automated clearing and settlement systems • Smart cards, electronic cash, digital wallets • Micropayments • Wireless payments • Electronic delivery of goods • Electronic bill presentment and payment • Moore

  22. eCommerce Data Exchange Needs Catalogs Quotations RFQs Purchase Orders Ship Notices Letters of Credit Electronic Payments Bills of Lading Invoices

  23. Data Interchange • How can sites exchange information without prior agreement? • What do the data fields mean? price, extended price, unit price, prix, цена, τιμή, 값, X’AC12’ • XML: Extensible Markup Language • How can the content be separated from form (visual appearance)? • How can data formats and structures be communicated? • What does the hex string “65436F6D6D65726365” mean? • ASN.1, Basic Encoding Rules (BER)

  24. Web Content Delivery • Buyer/seller communication requires content exchange • Effectiveness of communication requires multimedia content: audio, video, animations, . . . • Critical resource: bandwidth (channel capacity) • Unicast, multicast, broadcast • Compression • Content preparation, personalization • Content storage • Caching, mirrors, surrogates • Content Delivery Networks (CDNs), Akamai • Streaming

  25. Mass Personalization • Treating each user as an individual • key is INFORMATION • How to acquire and store information about customers • Cookies • Question and response • Clickstream analysis • External databases. Allegheny County • How to use information effectively and instantly • Personalization technology • Customization: Lands’ End

  26. Data Mining & Privacy technology • Extracting previously unknown relationships from large datasets • Discovery of patterns • Predicting the future • past behavior best predictor of future purchasing • Market basket analysis • diapers/beer • Privacy • P3P

  27. Data Mining Tools • Visualization (“seeing” the data) Table Lens • Predictive Modeling • Database Segmentation • Classify the users • Link Analysis • Association discovery • Neural networks • Systems that learn from data • Deviation Detection • Are any of the data unusual? Fraud detection

  28. Intelligent Agents Programs to perform tasks on your behalf • Metasearchers, shopping bots, news agents, stock agents, auction bots, bank bots • How to make agents “intelligent” • Rule-based systems • Knowledge representation • Agents that learn • Inductive inference • Negotiation agents • Avatars (characters in human form) SYLVIE from VPERSON

  29. M2M Commerce & Auction Models • How can machines do business with other machines? • Electronic discovery • Electronic negotiation • Auctions • Web Services • Idea: server does more than deliver a web page

  30. Q A &

  31. The eCommerce Process • Which of the steps are “bittable”? • Buyers and sellers find each other • Communication (via Networking, the Internet, Core Java and Web-Based Information Architectures) • Human-Computer Interaction, Multimedia • Intermediaries • Disintermediation • Negotiation • Electronic Negotiation, Intelligent agents • Foundations of Electronic Marketplaces

  32. The eCommerce Process • Transaction • Transaction processing, Databases • Electronic Payment Systems, • Computer Security, • eCommerce Architecture • Order fulfillment • Manufacture (manufacturing systems) • Delivery (tracking systems) • Supply Chain Management

  33. The eCommerce Process • Post-sale events • Customer Service and Help Facilities • Reorder, restock • Accounting • Transaction processing • Interoperability between online and legacy systems • Data analysis • Data Mining

  34. Communications and Networking • How do machines communicate? • What are the limitations? • How can 1010 users and 1012machines be connected? • What is invisible computing? ad hoc networking? • Speed, bandwidth, latency • Network plumbing • cable, fiber, switches, gateways, bridges, routers • Network protocols • connecting networks to each other

  35. Multimedia • How can multimedia be represented and transmitted? • Text, graphics, speech, music, video, movies, virtual reality • What are the limitations? • Speed, resolution, fidelity, color • How are multimedia created? • How are they stored? • File formats: GIF, TIFF, JPEG, MPEG, ... • How are they displayed (put in web pages)? • How are they indexed?

  36. PROCESS ENGINEERING DETERMINE PRICE DESIGN PRODUCT FORECAST DEMAND QUALITY CONTROL PROCURE MATERIALS PRODUCTION PROCESS CONTROL INVENTORY STATUS REPORTING CUSTOMER SERVICE INFORMATION FLOW SHIPMENT GOODS FLOW Manufacturing

  37. PROCESS ENGINEERING DETERMINE PRICE DESIGN PRODUCT FORECAST DEMAND QUALITY CONTROL PROCURE MATERIALS PRODUCTION PROCESS CONTROL INVENTORY STATUS REPORTING CUSTOMER SERVICE INFORMATION FLOW SHIPMENT GOODS FLOW e-Manufacturing ELECTRONIC BUSINESS INTEGRATION KNOWLEDGE WORK SYSTEMS PRODUCT DATA MANAGEMENT (PDM) AUCTIONS DATA MINING GROUPWARE EXCHANGES HUBS BID MGMT DYNAMIC PRICING BOMSUPPORT BUILD-TO-ORDER CPFR INTEGRATED BUSINESS COMMUNITIES DATA MINING SUPPLY CHAIN MANAGEMENT WORKFLOW SYSTEMS ePROCUREMENT COLLABORATIVE PRODUCT COMMERCE eFULFILLMENT eLOGISTICS VENDOR-MANAGED REPLENISHMENT CRM

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