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E-Commerce Web Hosting Options Jerry Post Westgate Management Development Center Eberhardt School of Business E-Commerce Web Hosting Options Jerry Post Westgate Management Development Center Eberhardt School of Business University of the Pacific 1

Retail Business Basics Government Marketing Taxes Shipping Analysis Registration Sales Receipts Purchases Create business Retail Business Basics Government Marketing Taxes Shipping Analysis Registration Sales Receipts Purchases Create business Accounting Payments 2

Credit Card Processing Settlement Processor Merchant Bank Acquiring Bank Transactions Issuing Bank Card Validation Credit Card Processing Settlement Processor Merchant Bank Acquiring Bank Transactions Issuing Bank Card Validation Card Information Amount Retail Account Card Number And Expiration Retail Store/Site Customer 3

Credit Card Processing Fees Ø Ø Transaction fee Usually less than $0. 50 Percent Credit Card Processing Fees Ø Ø Transaction fee Usually less than $0. 50 Percent of charges From 2 to 5 percent Monthly minimum$25 to $35 per month Setup fees Variable depending on bank and technologies used 4

Web Site Basics Log file Page Program Code e ag /p RL U t Web Site Basics Log file Page Program Code e ag /p RL U t es u eq Server r Database Images HTML Page Consumer 5

Browser Cookies Consumer Server First page/login Display page Save cookie file New page request Browser Cookies Consumer Server First page/login Display page Save cookie file New page request Send cookie Validate user Create cookie (ID) Generate page Use cookie ID to identify user Generate new page Note: cookies can only be returned to one site/domain. Companies Never even see cookies generated by other sites. 6

Internet Connections Network service provider (NSP) T 1: 1. 544 Mbps T 3: 44. Internet Connections Network service provider (NSP) T 1: 1. 544 Mbps T 3: 44. 736 Mbps OC 3: 155. 52 Mbps OC 12: 655 Mbps Backbone network Internet service provider (ISP) Phone company Individual Cable company Phone company Dial-up: 33. 3 - 56 Kbps ISDN: 128 Kbps DSL: 256 Kbps - 6 Mbps Cable: 1 to 10 Mbps T 1: 1. 544 Mbps T 3: 44. 736 Mbps Company Web site 7

Capacity Calculations T 1 T 3 1. 544 mbps 45 mbps T 1: 1. Capacity Calculations T 1 T 3 1. 544 mbps 45 mbps T 1: 1. 544 mbps $1600/month $1000/mbps $10, 000/month $222/mbps T 3: 45 mbps OC-12: 655 mbps 8

Bandwidth Business connection bandwidth sets number of users. Web Server 9 Bandwidth Business connection bandwidth sets number of users. Web Server 9

Economies of Scale 10 Economies of Scale 10

Internet Connections Ø Backbone providers v v v AT&T GTE Worldcom/MCI Sprint Qwest Ø Internet Connections Ø Backbone providers v v v AT&T GTE Worldcom/MCI Sprint Qwest Ø Network service providers v v v v v 1998: 39 AGIS AT&T Cable & Wireless IBM MCI/Worldcom Qwest Sprint UUNet Ø Phone companies v Regional Bell operating companies (RBOCs) (6) v Competitive local exchange carriers (CLECs) (new) Ø Cable companies v Intermedia v TCI/AT&T v Regional. Ø Satellite v Direct Satellite Ø Internet service providers v 1998: over 5000 11

Pu b Pu lic bl Sa i f C c S ety: el a Pu b Pu lic bl Sa i f C c S ety: el a lu fet 15 la Pe Co r p y: 4 0 M rs rdl ho 60 - 1. C es ne M 60 om s p s: M. S ho 80 500 Hz ne ys 0 M MH (P s (s H C z z S) om PC : 1 e): . 8 9 S ET 5 G 00 : - 2 MH 2 z. G H 2 G z H z ELF 100 VLF LF 30 K MF 300 K HF 3 M VHF 30 M UHF 300 M : TV : FM : TV : M -1 08 3 G z H M z z H z KH M H 00 -5 -1 M 65 0 in es ar -2 16 0 M 22 88 M 54 0 K 55 bm su y/ av AM N Frequency Spectrum Microwave Optical 10 G Hertz http: //www. fcc. gov/oet/info/database/spectrum/Welcome. html 12

Simple HTML Pages Main Web Page Categories … Category 1 Category 2 Category 3 Simple HTML Pages Main Web Page Categories … Category 1 Category 2 Category 3 Product … Product 1 Description Price Photo photo … Product 2 Description Price Photo photo … Product 3 Description Price Photo photo … Product n Description Price Photo 13

Buy-Me Button Merchant Web site Buy Me Product Description Price Card Processor Site Shopping Buy-Me Button Merchant Web site Buy Me Product Description Price Card Processor Site Shopping Cart Item Price … … Total Check Out Credit Card Data Name Address Phone Card Number Submit Notify merchant Customer Notification (Accept/Reject) http: //www. goemerchant. com/buymebutton. htm 14

Auctions Ø Ø Uncertain price Can set reserve price Good for unique items Efficiency Auctions Ø Ø Uncertain price Can set reserve price Good for unique items Efficiency depends on v Full information v Adequate number of participants 15

Amazon. com z. Shops z. Shop Products Cameras, Digital, Brand Vendor 1 Vendor 2 Amazon. com z. Shops z. Shop Products Cameras, Digital, Brand Vendor 1 Vendor 2 Vendor Transfer Description Price Scanned image Contact info Vendor 3 Transaction Processing Amazon. com handles credit Sends order info to merchant Merchant ships item to consumer Consumer Product search Choose vendor Pay for item 16

Virtual Malls Directory of Shops Product category Vendor 1 Vendor 2 Merchant Site Products Virtual Malls Directory of Shops Product category Vendor 1 Vendor 2 Merchant Site Products Sales Ø Essentially a marketing agreement Ø The “mall” provides a directory to merchants Ø The merchant site runs on a different server 17

Web Commerce Servers Your Web site Products Shopping cart Sales Customers Merchants Commerce Server Web Commerce Servers Your Web site Products Shopping cart Sales Customers Merchants Commerce Server Shell Load database Images Database Descriptions Prices Customize site Web servers Web/Commerce Hosting Company 18

Application Service Provider Business Application e. g. , Accounting Store data Analyze data Facilitate Application Service Provider Business Application e. g. , Accounting Store data Analyze data Facilitate company interaction Businesses that lease the use of the application 19

Web Server Platforms Ø Ø Linux/UNIX clone Microsoft Windows NT/2000 Sun Microsystems + Oracle Web Server Platforms Ø Ø Linux/UNIX clone Microsoft Windows NT/2000 Sun Microsystems + Oracle 8 i IBM Web. Sphere 20

Web Server Criteria Ø Database support v Crucial for e-commerce v Integration with Web Web Server Criteria Ø Database support v Crucial for e-commerce v Integration with Web server q Microsoft ODBC and ASP q PERL Database connector q Java database connector v Database system choices q Microsoft Access q Microsoft SQL Server q Oracle 8, 8 i q IBM DB 2 Ø Scalability v Increase speed and capacity without rewriting the Web application. v Two primary methods q Faster server q Distributed processing Ø Transaction processing v Crucial for integrated online systems to prevent loss of data. 21

Database Management System (DBMS) Ø Ø Store data Support queries (SQL) Provide backup and Database Management System (DBMS) Ø Ø Store data Support queries (SQL) Provide backup and recovery Support multi-user access and prevent concurrency problems Ø Share data across servers v Microsoft Open Database connectivity (ODBC) v Oracle network 22

Scalability Ø Increase usage rates without rewriting the application. Ø Run on bigger, faster Scalability Ø Increase usage rates without rewriting the application. Ø Run on bigger, faster servers v Requires wide range of hardware platforms Ø Support distributed processing on multiple servers v Easy to expand v Requires advanced software support v Application must be designed carefully v Handles failures easily through redundancy 23

Transactions and Message Queues Ø Transactions are a set of changes that must succeed Transactions and Message Queues Ø Transactions are a set of changes that must succeed or fail together. Ø Example: transfer money from savings to checking account. Ø Advanced systems and databases handle transactions almost automatically (just specify start and end points). Ø Message queues are used in distributed systems to store messages (e. g. , transactions) in case a machine or a link goes down. 24

Platform Comparison Platform Database Scalability Scripting Linux Limited PERL Windows 2000 Good, ODBC integrates Platform Comparison Platform Database Scalability Scripting Linux Limited PERL Windows 2000 Good, ODBC integrates most DBMSs Distributed, transactions, message queuing ASP Sun/Oracle Good within Oracle Server size Java, PERL IBM Web. Sphere Good, IBM, Oracle Distributed, transactions, message queuing Java 25

Windows 2000 Web page request Enterprise Web Server cluster Requests handled by available server Windows 2000 Web page request Enterprise Web Server cluster Requests handled by available server Web page built from HTML Images Data ODBC + ASP Database Server cluster 26

Sun/Oracle 8 i Web page request Sun Server Oracle DBMS Software Data Images HTML Sun/Oracle 8 i Web page request Sun Server Oracle DBMS Software Data Images HTML pages Java code to link together Transactions and connectivity handled by Oracle Scalability provided mostly with bigger server. 27

IBM Web. Sphere Web page request Web. Sphere software Hardware can be IBM, Sun, IBM Web. Sphere Web page request Web. Sphere software Hardware can be IBM, Sun, or Intel. Traditional IBM machine • Database • Transactions • Message Queue • Scalability IBM S/390 28

Hosting on Shared Servers ISP Server r Your e stom cu Transfer to ISP Hosting on Shared Servers ISP Server r Your e stom cu Transfer to ISP You design the site. • Server is shared by other firms • Performance outside your control • Capacity is limited Hundreds of customers for other businesses • Data transfer is limited 29

Server Co-Location Customer Development • You purchase or lease a server solely for your Server Co-Location Customer Development • You purchase or lease a server solely for your use that is installed at the ISP location • You usually have physical access. • Pay space and data transfer charges to ISP 30

Run Your Own Server ISP Customer Development and Web site management router T 1: Run Your Own Server ISP Customer Development and Web site management router T 1: monthly lease • You have total control router Connect to your other computers. • You pay monthly lease to phone company and ISP • You can connect to internal computers 31

Summary: Costs Simple HTML Single Unit Commerce Site Shared Server Co. Location Your Own Summary: Costs Simple HTML Single Unit Commerce Site Shared Server Co. Location Your Own Server Setup $0 $0 -$10 $300 $200 $3000 $8000 Monthly $0 -$20 3 -5% per sale $200 + 3 -5% per sale $40 -$500 $400$1000 $800 -$2000 Management Minimal site updates Site/product updates Product/catal og updates Site updates Pay, or manage server Complete server management 32