Session 4. The Internet: Evolution and Revolution Basics of doing business on Internet. The Internet: Evolution and Revolution

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1 Session 4 The Internet: Evolution and Revolution Basics of doing business on Internet The Internet: Evolution and Revolution The Internet actually began its journey in the late 1960s as an experiment by the military and a few academic researchers called DARPA. In fact four computers were connected in the experiment to see how information could be exchanged over them in real time. This experiment's success lead to an expansion in connecting many computers, especially in the academic community as they could exchange research based information without doing much of travel. Thus began the utility of having connected computers. However this revolution was slow. Once Business Enterprises saw the utility of such networks, the whole scenario turned out to be different. The early 1980s saw an increase in the number of Internet hosts being available as businesses started to create networks which are accessible, not only to their employees, but also to their customers and vendors. As time passed by, we can see that an almost vertical growth took place in the number of hosts and by the early 1990s, the Internet amongst the business community was a well established phenomenon. What is noteworthy is the amount of technological innovations that happened around this phenomenon. Ability to connect devices manufactured by a variety of hardware companies, standardized way of producing devices such that they are compatible with each other, establishing, refining and implementing different protocols for reliable communhication delivery, developing the ability to handle various types of data in an effective manner, etc., laid out the foundation for the ultimate network of networks called the Internet. After the 1990s the Internet through the World Wide Web became a common phenomenon even in the households. Avaialability of information that is useful for everyone, cheaper, faster and better devices such as personal computers, mobile phones, etc., helped to accelerate this phenomenon. Thus, we can see that the outreach of the network in terms of hosts available and in terms of number of hits each host was receiving is pretty vast. This could not have been achieved if the above stated supplimentary phenomenon have not happened, when they had to happen. Revolution!!

2 Revolution is when a large set of people start to fundamentally THINK AND ACT differently from the normal and accepted ways of thought and action. The availability of information on line whenever and wherever needed, the ability to connect to the Internet whenever and wherever needed enormously altered the way of thinking people had about their work and personal life. Availability of connectivity on demand helped business to think of new ways of interacting and engaging customers, vendors and employees. Hence we can see that the Internet did bring about a Revolution to the very fundamental way people lead their lives. The Internet Revolution New ways of communicating and connecting with people Telephone Vs Vs Social Networking: As information started travelling faster than humans can travel and as information could be organized in a personalized form that aided the understanding of the individual, more new ways of communicating and connecting with people started emerging. Telephones and then s and then social networks made it possible not only to inform people about the businesses, but also to engage them in a variety of activities, collect feedback and analyze it for effectiveness. Hence a whole new way of delivering business results opened up because of Internet Access to information Information, The Internet Business Models B-2-C Flipkart B-2-B FedEx B-2-G: E-Governance C-2-C: Wikipedia, Facebook An Example Knowledge, Discovery&Invention: Its not only about accessing of information, but also about processing it in different ways, to suit different situations and thinking styles, quickly and effectively that leads to Knowledge, Discovery and Invention. The Internet, with its ability to cut across communication channels, networks and data types enabled people not only to access information, but also to process them and personalize them in ways that suited their tastes and preferences. The result of such processing can now be shared, re-analyzed and re-shared. This ability leads to knowledge and discovery and invention. E-commerce: Also known as Business to Consumer sites. These sites allow customers to browse for information, place enquiries and orders, engage in conversations and pay through several online methods Exchanges: Also known as business to business sites. These sites allow vendors and suppliers to exchange information with each other. Business to Government sites. Allows a business to connect to a governing and/or regulatory body seemlessly and interact with them on several policy related matters. Customer to Customer sites. Sites built by organization where customers get to know other customers, and engage in active discussions on their needs and wants. Given below is a self-explanatory diagram of how the above business models fit into an enterprise

3 system. As we ca nsee B2B and B2C models, different types of networks can be integrated to suit the needs of the business strategy. Information Flows The Diagram below refers to the hard product flows and the information flows throughout the supply chain beginning from the suppliers and ending with customers. The Solid Red lines are the hard products, the dotted red lines are soft information products, the dotted blue lines are orders and payment flows. One thing that is clearly evident from the diagram below is that the pace at which business can be carried out is now the pace at which the hard product can be moved from the supplier end to the customer end. The soft and information products from no real barriers as their speeds are independent of and faster than the speed at which the hard products move. Having said that let us now take a look at the various things that need attention when we are doing business on the Internet. Please note that fulfilment is a very very critical part of any e-business model as the rest of the transactions are carried out on-line. Five key components of running a business Location and Hosting

4 Traffic: The location and hosting depends on the size of traffic expected. Image: Different hosting services ranging from free hosting to exclusive and customized hosting are available. While free hosting requires you to ride on someone else's website name, it gives you access to be present on the Internet, exclusing and customized hosting is often flexible and expensive. Choosing the host with an appropriate image is critical for the Internet business to be successful or not. Competition: Number of players being hosted in a given location and the traffic spread across the players is also a noteworthy factor Convenience: How quickly and easily can the information be presented to the customer and how flexible can it get when it has to be presented across different gadgets. Size Bandwidth, Processing Power, Data Storage: The size of information and the amount of information transfer per unit of time will determine what are the requirements for bandwidth, processing power and data storage. Domain name registration This is often cumbersome as many domain names (the website name) are already taken and one might have to pay for the name registration service. Hosting Free hosting: Some service providers offer free hosting services. Usually experimental startups and people who do business at a very fundamental level use these services. Usually they are very limted and do not allow complex e commerce transactions to take place. Shared Server hosting: Several people share the server, but the domain names will be unique. However, the amount of space available will be limited. If competing websites are sharing the same space, then possible security threats are many. Dedicated Servers hosting: Dedicated servers are host computers that are exclusively given for the use of the e-commerce business. The whole of the data and software is exclusively of the domain holder and greatest felxibility is available here. Co-Located Servers: Servers located in large and unique infrastructural setting that enables the servers to perform better and cheaper are called co-located servers. By sharing infrastructural facilities the cost of the server and the service comes drastically down. In-house hosting: Organizations own hosting without depending on a third party hosting service is called in house hosting. This type of hosting is preferred either if there are high level security concerns and/or when the organization wants to have everything under their control. Marketing and Presentation Next task is to attract and retain customers through a variety of awareness-building activities Advertising: A traditional way of getting attention from customers. Different print and electronic media are avaialble for the same. Guerilla Marketing: Its a technique of hiding the marketing effort till the last minute and unleashing a plethora of activities that can take the competion by surprise. The following are some of the characteristics Characteristics of Guerilla Marketing (Traditional & Web-based) It does not include overt media buys. That is media buying is kept secret.

5 Additional Direct e-commerce: Presentation In Search Banner It relies heavily on word-of-mouth to spread its message. The competition cannot sense it as it is informal communication It is generally used by companies with limited budget. Its cheaper and requires a special talent to use informal and non-traditional wasy to attract customer attention. Web-based Techniques Affiliate Programs Marketing programs designed to enable merchants to mobilize other websites (affiliates) to help sell products, produce traffic, or build brand Viral Marketing Company-developed products, services or information that are passed from user to user Marketing Involves direct contact between the company selling a product or service and the intended customer Often considered intrusive and annoying Examples of direct marketing: Unsolicited ( spam ), newsgroup postings, etc. addition to traditional advertising methods, e-commerce can use Web-based marketing efforts Engine and Directory Listings Search Engine Optimization: The process through which a website can make itself appear in the top ten list presented by various search engines. This can be easily done by knowing how search engines evaluate information being presented on a website and place a rank on relevance of the site to the seeker of information Paid Placement : Sponsored placements where the advertisement appears at a preferred spot such as on the top of the webpage etc., Adds Most common advertising product on the Web Can be highly Targeted: Can be displayed to only those customers who are actively seeking information.