Transcript E-Stores

E-Future
Modified: Vali Derhami
Yazd University, Computer
Department [email protected]
1
Outline
 Growth
of Internet users and ecommerce
 High-speed access technologies
 Streaming multimedia
 Java
 Impact on industries
 Disintermediation
 Regional differences
2
Internet Demographics
 How
many Internet users are there?
Country
The World
United States
Japan
Canada
United Kingdom
Germany
Australia
France
Sweden
Taiwan
Number of Internet
users (millions)
180.0
92.0
19.5
13.5
10.6
8.4
4.0
2.5
3.3
3.0
Country
Spain
Brazil
Netherlands
Italy
China
Korea
Finland
Belgium
Norway
Russia
Number of Internet
users (millions)
2.7
2.7
2.3
1.5
1.5
1.5
1.4
1.4
1.3
1.3
2000: about 180 million
2003: about 300 million
3
Time Spent Online
 How
many hours spent per week using
web browser?
Hours of web
use per week
0-1
2-4
5-6
7-9
10-20
21-40
>40
USA (%) Europe (%) All Respondents (%)
0.9
9.2
10.9
13.1
34.4
21.0
10.4
1.1
8.2
10.8
14.6
38.1
17.9
9.3
0.9
9.2
11.0
13.2
34.0
21.2
10.6
4
What Was Bought
Online market segment
Software
Hardware
Books
Travel
Music
Clothing
Millions of purchasers
in this category (1998)
22
18
16
12
10
7
5
How Much Was Spent
 Reported
in April 1999
Total amount spent online
in last six months
< $50
$50 – 100
$100 – 500
> $500
don’t know
USA (%)
15.8
7.3
33.1
40.5
3.2
Europe (%) All Respondents (%)
27.3
12.7
36.4
21.8
1.8
17.7
8.0
33.0
37.8
3.6
6
E-Commerce Forecast
 Estimate
 $1.6
for year 2003
to $3.2 trillion
 That
one projection makes all the effort
worthwhile
7
Internet Access Technologies
 POPs,
ISPs, and users
POP
ISP
use
r
ISP
use
r
ISP
ISP
use
r
POP
POP
ISP
use
r
use
r
ISP
use
r
ISP
use
r
ISP
use
r
8
Analog Modems
 Typical
speeds are 14.4 to 56 kbps
ISP’s
Internet
connection
Telephone
System
PC
Telephone
and
modem
Modems and
servers at the
ISP
9
ISDN Telephones
 ISDN
is a digital telephone
 Two 64 kbps channels (two lines)
 Common throughput Europe and Japan
 Less common in US
 ISDN charges per call
 Affects Internet usage patterns
10
Cable TV
 66%
of US homes have cable TV
 Bi-directional vs. unidirectional systems
Neighborhood
Cable TV
head-end
Neighborhood
11
Fiber Optics
 Fantastic
bandwidth (25 trillion bps)
 Hampered by “last mile problem”
 Internet backbone is all fiber optic
 speeds
 FTTC
from 2.4 to 9.6 gbps
(fiber to the curb)
 demultiplexed
 FTTH
into 16 copper channels
(fiber to the home)
 “holy
grail” of telephone, cable, ISP
providers
 fully integrated communications system
12
ADSL
 Asynchronous
Digital Subscriber Line
 1.5 Mbps into home; 16 kbps
backchannel; plus analog or digital
phone 1.5 Mbps
set-top box
ADSL
network
unit
16 kbps
ADSL
subscription
unit
telephone
fiber optic
connection to
telephone end
office
13
DSL
 Digital
Subscriber Line
 Use high-power digital signal
processors between telephone end-office
and home
DSL
at
telephone
office
1.5 Mbps*
DSL
home
unit
* can also be fractional rates
14
Satellite
 DirecPC
has downlink bandwidth of 26
Mbps; shared; user gets about 400 kbps
Hughes
Network
Systems
telephone
backchannel
15
Wireless
 Mobile
professionals
 Wireless within buildings
 Wireless all over the world
 {Iridium},
Teledesic, Ellipso
 Telecommunications
vs. data
infrastructure
 Experimental systems
16
Streaming Multimedia
 Audio
and video played via
 Microsoft
Media Player
 Real Networks G2 player
 Commercial
sites
 www.broadcast.com
 www.realnetworks.com
 Rate
adaptive
17
Streaming Multimedia
18
Streaming Multimedia
19
Java
 Programming
language that is portable
 Java applications run on any platform
(via a Java interpreter)
 Minimizes effort for movement to new
platforms
 Java applications similar to C++
 Java applets downloaded from server
and then run locally
 Security issue with downloaded code
20
Factory Monitoring
 Virtual
Factory for continuous process
ethylene plant
 gasoline
fractionator
 quench tower
 drier
 demethanizer
 ethylene
 Monitors/controls
eight key parameters
21
Virtual Factory
22
Virtual Factory
23
Revolution in Traditional Business
 Banking
 Retailing
 Manufacturing
 Online
publishing
 Disintermediation
24
Banking
 1970s:
banking via touch-tone telephones
 1980s: cable TV (failure)
 Proliferation of non-bank software (Quicken,
MS Money)
 Finally, online banking
 stage one: review accounts
 stage two: move money
 stage three: investments & financial
services
 Security First National Bank
 www.sfnb.com, no physical presence
25
Retailing
 Progression
through
 sole
proprietorships (mom-and-pop)
 department stores (Leggett’s)
 discount chains (Wal-Mart)
 warehouse clubs (Sam’s Club)
 television retailing (Home Shopping
Network)
 CD-ROMs (interactive catalogs)
 and now: e-tailing
26
E-tailers
 Four
groups
 retailers with physical
 Wal-Mart, Sears, K-Mart
and web presence
 mail order merchants with
 Plow & Hearth, 1-800-Flowers
 manufacturers
middleman

online catalog
who sell without
Dell Computer
 “New Age” e-stores (only)
 Value America, Drugstore, Amazon, eBay
27
Manufacturing
 Lower
costs using just-in-time inventory
 Dell is a prime example
 Saturn is another
 orders
arrive from dealers electronically
 production planning on web
 vendors consult production database
 vendors deliver parts as needed
 receiving clerk scans barcode
 vendor paid electronically
28
Online Publishing
 Revolution
in publishing
 lower
cost of production
 targeted information
 serve niche areas
 EDGAR
(Electronic Data Gathering,
Analysis, and Retrieval) is a prime
example at www.sec.gov/edgarhp.htm
 Scholarly publications, newspapers,
magazines, news, movies, soap operas,
etc.
29
Online Publishing
 Don’t
have to make money if
 goal
is information dissemination to
widest audience
 online pubs lower cost of distribution
 But
if you need to make money
 subscriptions
 pay-per-view
 advertising
 take
site
a share of money flowing through
30
Disintermediation
 Who
is at risk? (maybe)
 travel
agents
 catalog publishers
 postal mailers, couriers
 retail auto salespersons
 CD databases
 some types of printed publications
 telephone call centers
 stock brokers
 brick-and-mortar stores with e-store
equivalents
31
Regional Issues
A
Tale of Three E-Stores
 JustToys.com
 VindeFrance.com
 MoviesForFree.com
 Analysis
and discussion
 Lessons learned
32
JustToys.com
 Created
a web site just for toys
 Very successful after their U.S. launch
 Japanese love toys, so contracted with an
agent to open mirror site in Japan
 Japanese site was a duplicate of the
American one
 Lots of viewers, few buyers
 Shut down effort after eight months
 What went wrong?
33
JustToys.com
 Web
site was in English
 Japanese prefer to read Japanese
 They bought from Japanese websites, or
 Used web to identify products, then
bought from a retail store
34
VindeFrance.com
 Sell
French wine to Frenchman
 Learned from JustToys, so website was in
French
 Offered well-known brand names at a
discount
 Payment via ubiquitous credit card
 Reliable delivery via reputable agents
 Can’t lose: high quality, lower price, easy
payment, reliable delivery
 But electronic shopping carts abandoned at
checkout screen
35
VindeFrance.com
 French
don’t use credit cards like
Americans
 Encryption illegal until this year
 Banks provide automatic loans with
checking accounts
 So French just write a check
 Website didn’t support buyer’s payment
preferences
36
MoviesForFree.com
 Portal
site for free movies
 JustToys:
provided subtitles in major
languages
 VindeFrance: no payment necessary
 Make money from banner ads that display
continuously while customer watches movie
 Works fine in U.S.
 When tried in Europe and Asia, customers
would look at site but not watch a movie
 How can this be? It’s free!
37
MoviesForFree.com
 In
U.S., Internet connections have monthly
fees but no usage charges
 In Asia and Europe, Internet connections use
ISDN phone that impose toll charges
 Net access is free, but phone usage is billed
by the minute
 So result is pay-by-duration
38
Japan
 70%
of online time spent at work
 Telephone company charges 200
yen/hour, plus ISP access fees
 Strong demand for brand names
 Credit card payment not universal
 Delivery companies make C.O.D. very
practical
 Preference for websites in Japanese
39
United Kingdom
 AOL
offered “100 hours free”
 But free meant subscription fee, not
telephone access fee
 AOL dropped prices 40% June 1
 AOL started “bundled” service at £50/mo.
 Freecall offered free service
 British Telecom offers Clickfree basic service
plus a £12/mo. premium service
 Boycott on June 6 protesting the telephone
access fees
40
Germany
 Traditional
ISP can be $53/hour
 AOL charging 8 pfennigs/min for access
 Phone company charges another 8
pf/min
 Deutsche Telekom fighting back with a
6 pf/min rate on its T-Online service
 DT has 3 million customers
 Basic (free) or premium (pay) service?
 ISPs are providing both
41
France
 Environmental
issues more prominent than
in the U.S.
 American just goes to amazon.com and buys
a book
 Frenchman would think twice about that
 wrapping, boxing, fuel to deliver in a
truck
 Encryption was illegal in France until 1999
 made credit card payments suspect
 France permits easy credit through overdraft
 write yourself a loan with a check
42
Asia
 India
world-famous for businessmen,
scientists, and engineers
 But e-commerce going slowly
 Indian Visa card denominated in rupees
 usable
anywhere in India, but not
elsewhere
 China
trying to embrace the Internet
 government
mandating use
 South
Korea flocking to online trading
 E*trade will launch in Japan
43
Israel
 Eleven
banks authorized for online
services
 three
provide information only
 eight provide banking services (securities)
 none provide bill payment or bank-tobank transfers
 Government
concerned about hackers
 Government very concerned about
security
44
Middle East
 In
a ancient land, dominated by
personal relationships, religion,
agriculture, and oil, there is no Internet
culture
 Middle East and Africa (excluding
Israel) account for 0.1% of world’s
Internet hosts
45
United States
 Internet
Tax Freedom Act of 1998
 three year moratorium on new taxes
 No state can force another to collect its sales
tax
 Business with a presence in a state must
collect state sales tax
 but what is a presence on the Internet?
 Which is better?
 tax-free zone -- bet on economic
development -- or
 tax like catalog sales
46
Energy
“Being digital” is energy-intensive
 In the U.S.
 20 million new computers/year (30 B
kwh/yr)
 3 million new routers/switches (65 B
kwh/yr)
 80 million extant computers (75 B kwh/yr)
 4 million big servers (120 B kwh/yr)
 Internet-related computers and services
consume 8% of US electronic power
 13% when you include stand-alone
computers

47
Lessons Learned
 Language.
While English is the
dominant language of the world wide
web, it is naïve to think that electronic
commerce will be transacted in only one
language. Computers must adapt to
people, not the other way around.
International e-commerce websites must
support multiple languages.
48
Lessons Learned
 Payment
methods. Credit card payment is
nearly universal in the U.S., but not so in the
rest of the world. Some cultures prefer
alternative methods of payment (e.g., C.O.D.
in Japan), while others are genuinely
concerned about the security of Internet
transmission of personal and financial
information (e.g., the no-encryption law in
France). E-commerce sites should provide
multiple settlement systems that are
compatible with the way customers are used
to doing business.
49
Lessons Learned
 Access
charges. Internet access charges play a
pivotal role in usage patterns. If access is
free, Internet sessions are long and involved;
the viewer tends to wander the web and
experiment with new sites, thereby exposing
himself to new ads and new marketing
opportunities along the way. If access is
metered, sessions are short; users tend to
repeat what they have done before, thereby
limiting their exposure to both new ads and
new sites. Elimination of access charges will
significantly increase the number and length
50
of Internet sessions.
Lessons Learned
 Social
issues. Environmental concerns, the
local economy, or other local issues may
affect e-commerce in ways that are difficult
for a foreign company to anticipate.
51
Lessons Learned
 Government
regulation.
As a rule,
governments move much more slowly than
the Internet economy. Those countries that
are slowest to adopt new purchasing
methods will be the last to profit from the
cost-cutting advantages of e-commerce.
52
Lessons Learned
 Growth.
E-commerce is a lot more
complicated than buying a computer
and hiring a web programmer, but even
so the world has taken to it at an
astounding rate. Analysts forecast in
every world region a sharp increase in
the number of Internet users and the
amount they will spend online.
53
E-Future
 Challenges
are real, but the future is
bright
 $1.6 to $3.2 trillion worldwide
 Makes it worth addressing the issues
54
E-future
 Market
lost $2 trillion week of April 10
 Serious shakeout of dot coms and others
 Cisco went from $80 to $60
 In the long term, this is good
 Companies that are going to make it
need
 solid
technology
 realistic business plans
 visibility through marketing
 maybe a market niche
55