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  1. CHAPTER 1 Introduction to E-Business Technologies E-Business Technologies

  2. Objectives In this chapter, you will learn to: • Describe the early technological development of the Internet • Discuss the origins and evolution of the World Wide Web • Identify the primary events that led to the commercialization of the Internet and the World Wide Web • Define e-business models based on the commercial application of Internet technologies E-Business Technologies

  3. The Early Development of the Internet • Due to the intense economic, political, military, and ideological rivalry between the United States and the former Soviet Union, the Eisenhower administration created the Advanced Research Projects Agency (ARPA) Why is it that many business opportunities that spring from technological advances come from projects initially funded by the government? Click Here 1. the government can raise extremely large amounts of capital and expertise 2. failed projects can be absorbed - does not bankrupt the government 3. the taxpayer frequently does not realize the project is being pursued E-Business Technologies

  4. Advanced Research Projects Agency ARPA’s early focuses were to: • Fund military-oriented communications systems and computer research - what is the relationship between computing and communications then and now? • Develop a computer information systems edge over the Soviet Union The military understood that: • Mainframe computers were crucial for complex computational tasks such as cryptography, weapons control, and other military applications • Computers would be crucial for spaceflights and for military command and control operations (remember that 'spaceflights' translated into missile weapons and a 'high platform' for weapons delivery) E-Business Technologies

  5. ARPA’s New Vision J. C. R. Licklider: moved the core thinking of ARPA towards societal benefits and away from strictly military applications • Joined ARPA in 1962 • Was a psychologist • Believed technological development would “save humanity,” and the interaction between humans and computers would lead to better decision making • Theorized that people would be more productive if they had access to a good computer system and information databases that they could use directly without having to go through computer operators • Wrote “Man-Computer Symbiosis” E-Business Technologies

  6. ARPA’s Changing Mission • Licklider conducted two major ARPA projects: • A command and control project, to help the military make timely decisions and then implement those decisions quickly and effectively using computers • To find uses for computers beyond mathematical and scientific calculations E-Business Technologies

  7. ARPA’s New Mission • Licklider offered research contracts to the country’s top computer research centers and scientists including: • Stanford University • The Massachusetts Institute of Technology (MIT) • The University of California, Los Angeles (UCLA) • The University of California, Berkeley • By 1964, ARPA’s computer systems research and development switched from military war games to time-sharing (where multiple computer users at independent terminals work on one computer at the same time), graphics, and improved programming languages. E-Business Technologies

  8. Building ARPANET • In 1966, the ARPA Information Processing Techniques Office (IPTO) was receiving more and more requests to fund purchases of new computers for research contractors. • To avoid this expense, IPTO directory Robert Taylor initiated work on a project to connect the computers used by research contractors to enable information sharing. E-Business Technologies

  9. Building ARPANET • The IPTO network project was assigned to Lawrence Roberts, a research scientist who worked on a network project that connected computers at MIT with computers at System Development Corporation in California Outside contributors on this project included: • Leonard Kleinrock (UCLA) • Douglas Englebart (Stanford Research Institute) • Paul Beran (RAND Corp) • Donald Davies (British National Physical Laboratory) E-Business Technologies

  10. ARPANET Delivery Timeline • In 1968, the Department of Defense (DOD), operating as the official government sponsor for the ARPA network, sent out 140 Requests for Proposals based on Roberts’ plan • Twelve companies responded with bids • The project was awarded to Licklider’s former consulting firm, Bolt Beranek and Newman (BBN) Why did IBM and CDC (two of the largest & most profitable computer companies at that time) declined to participate in the ARPA network? Why didn't AT&T participate? E-Business Technologies

  11. ARPANET Delivery Timeline • In the fall of 1969, the computers of four IPTO contractors were connected creating ARPANET. These contractors were: • The University of California, Los Angeles (UCLA) • Stanford Research Institute (which later became SRI) • University of California, Santa Barbara (UCSB) • The University of Utah E-Business Technologies

  12. Xerox computer CDC computer IBM computer Xerox computer E-Business Technologies

  13. ARPANET’s Contribution to the Internet • In 1971, ARPANET had 15 nodes • In 1972, the first international connection brought the University College of London online • Growth fuelled research and developed into improvements in computers communications • One essential new development was an agreed upon format for transmitting data between the ARPANET computers, called a protocol • Transmission Control Protocol, (TCP), was developed by Vinton Cerf at SRI and Robert Kahn at DARPA • TCP became the basis for TCP/IP, the Internet protocol standard IP E-Business Technologies

  14. Evolution of NSFNET • Scientists developed new methods of sending different types of data between computers: e-mail, bulletin boards, etc. • As APARNET became the Internet, networks were absorbed or spun off (BITNET, MILNET) • The National Science Foundation assumed the cost of operating the Internet and created a higher-speed system of interconnections called the NSFNET • NSFNET became the basis for the current Internet E-Business Technologies

  15. Packet Switching • Packet switching enables a computer network to send data over multiple paths, by passing failed connections when necessary • Paul Baran, a scientist with RAND Corp, proposed using computers on a packet switched network as a solution for the military’s need for a communications system that could survive a nuclear attack • Messages are broken down into blocks or packets before transmission across a switched network. Packets take different routes through the distributed computer network to a single destination computer where they would be reassembled. E-Business Technologies

  16. Packet Switching Donald W. Davies: • A physicist at the British National Physical Laboratory (NPL) • Proposed creating a distributed computer network that used packet switching as a public communications network • Directed the creation of the NPL Data Network, which used Davies’ packet theory to send messages As you think of packet switching and e-mail, etc, begin to think of 'store & forward' as a viable concept. Click Here E-Business Technologies

  17. Origins and Evolutions of the World Wide Web display • “Internet” refers to computers and the connections between them. Also, it usually refers to the rules, or protocols, that allow computers to communicate with each other seamlessly. • The World Wide Web (WWW) is a subset of the Internet — a group of specially formatted documents called Web pages connection Why is it important that the network moved to NSFNet? E-Business Technologies

  18. Basic Componentsof the World Wide Web • Components of the World Wide Web include: • Web sites, a collection of related Web pages available from a single source • Web server, the software that “serves” Web pages when requested by a user • Web browser, a software application used to locate and display the pages begin to think of who pays for the server resources and the browser resources in order to assess economic viability for the idea E-Business Technologies

  19. Basic Componentsof the World Wide Web E-Business Technologies

  20. The Beginningsof the World Wide Web • In 1980, Tim Berners-Lee began playing with a software application, he called Enquire, to keep track of research information at CERN, the European Particle Physics Laboratory • Enquire allowed Berners-Lee to link pages of information stored on a single computer • Berners-Lee left CERN without completing development on Enquire E-Business Technologies

  21. The Beginningsof the World Wide Web • Berners-Lee returned to CERN in 1984 to work with a team that documented the results of individual experiment groups • Berners-Lee needed to develop something similar to the original Enquire software application to perform his work • He began working on an application-based documentation systems model called hypertext, in which text and other objects can be linked to each other E-Business Technologies

  22. The Beginningsof the World Wide Web • In 1991, Berners-Lee’s system of linked documents, which he called the World Wide Web, was a reality It utilized: • A text-based Web browser called WorldWideWeb • An application called a Web server, which organized Web pages on a server and allowed others to access them • During the 1990s, CERN gave away the Web browser and Web server to interested Internet users at no charge - so what do you make of Netscape's, Oracle, and other companies making the free give-away of a browser by Microsoft as clear evidence of unfair business practices? E-Business Technologies

  23. The Beginningsof the World Wide Web Mosaic: • Was developed in 1992 by programmers at the University of Illinois Champaign-Urbana’s National Center for Supercomputing Applications (NCSA) • Was the first graphical Web browser • Used both images and text for linking documents for retrieval and display • Development of commercial Web browsers followed in quick succession with the development of Netscape Navigator and Microsoft Internet Explorer E-Business Technologies

  24. Commercialization of the Internetand the World Wide Web • The three major events that led directly to the commercialization of the Internet and the World Wide Web are: • The distribution of Berners-Lee’s early Web browser and Web server software within the Internet community • The development of graphical Web browsers (you must also know that computer power at an affordable cost played a significant role) • The legalization of commercial activity on the NSFNET E-Business Technologies

  25. Commercialization of the Internetand the World Wide Web • Electronic linking of individuals and businesses that followed has created a new economic environment • time and space are much less limiting • information is more important and accessible • traditional intermediaries are being replaced • the consumer holds increasingly more power because of E-Business Technologies

  26. Commercialization of the Internetand the World Wide Web • Electronic commerce (e-commerce) describes business activities conducted using Internet technologies, including: • Buying and selling products and services • Delivery of information • Providing customer service before and after the sale • Collaborating with business partners • Enhancing productivity within organizations E-Business Technologies

  27. Origins of E-Business • In the 1960s and 1970s, banks began using Electronic Funds Transfer (EFT) and large companies began sharing information via Electronic Data Interchange (EDI) • Using EDI, companies exchange information electronically with suppliers, customers, and other “trading partners” • This information includes invoices, purchase orders, quotes, and bills of lading, traditionally passed on paper • These transmissions generally occur over private telecommunication networks called value-added networks or VANs E-Business Technologies

  28. E-Business Models • An e-business model is the way in which an e-business generates revenues • E-business models can be broadly categorized as: • Business-to-Consumer (B2C) • Business-to-Business (B2B) • Business-to-Government (B2G) • Consumer-to-Consumer (C2C) • Consumer-to-Business (C2B) E-Business Technologies

  29. Business-to-Consumer (B2C) • Sells products or services directly to consumers • Brick-and-click model- brick-and-mortar business using a Web storefront to reach consumers • Subscription model- the e-business provides high-value content for a subscription fee • Catalog model- brick-and-mortar business that migrates business completely to Web-based ordering E-Business Technologies

  30. Business-to-Business (B2B) • Sells products or services to other businesses or brings multiple buyers and sellers together in a central marketplace • Business between companies can be transacted over an extranet, allowing participants to view each other’s data and complete business transactions • B2B exchange model uses Web sites that bring multiple buyers and sellers together in a virtual centralized marketspace E-Business Technologies

  31. Business-to-Business (B2B) • A business trading community is a B2B exchange which acts as a central source of information for a vertical market • Web sites that serve a vertical market can include: • buyer’s guides • supplier and product directories • industry news and articles • schedules for industry trade shows and events • classified ads • The volume of B2B e-business is predicted to reach $4.3 trillion by 2005 (remember, by Census Bureau calculations the B2B was a little more than $1 trillion in 2001 which makes the figure reasonable with a 10-15% growth per year) E-Business Technologies

  32. Business-to-Government (B2G) • Businesses that sell to government agencies • Similar to the B2B exchange model • Provides a marketspace for businesses to sell their products and services to government agencies E-Business Technologies

  33. Consumer-to-Consumer (C2C) • Consumers sell directly to other consumers • Transactions executed through on-line classified ads and auctions E-Business Technologies

  34. Consumer-to-Business (C2B) • Consumers name own price which businesses accept or decline • The Web site collects the demand bids and then offers the bids to participating sellers E-Business Technologies

  35. Seller advantages include: Increased sales opportunities Decreased transaction costs 24/7 operation Increased speed and accuracy of information exchange Consumer advantages include: Wider product availability Easy comparison shopping and one-stop shopping for business buyers Ability to shop 24/7 Access to global markets E-Business Advantages E-Business Technologies

  36. Seller disadvantages include: Rapidly changing technology System security and reliability problems Network deficiencies Increase in instances of failure to pay for merchandise or fraud Consumer disadvantages include: Poor customer service Transaction security and privacy Complex return policies Lack of trust for unfamiliar sellers E-Business Disadvantages E-Business Technologies