msec orientation august 21, 2003 copyright © 2003 michael i. shamos msec orientation 2003 michael...

MSEC ORIENTATION

AUGUST 21, 2003

COPYRIGHT © 2003 MICHAEL I. SHAMOS

MSEC Orientation 2003

Michael I. ShamosCo-Director

MSEC ORIENTATION

AUGUST 21, 2003

COPYRIGHT © 2003 MICHAEL I. SHAMOS

Is eCommerce dead?

SOURCE: PWC

May 12, 2003

MSEC ORIENTATION

AUGUST 21, 2003

COPYRIGHT © 2003 MICHAEL I. SHAMOS

Which is the largestused-car dealer in the U.S.?

MSEC ORIENTATION

AUGUST 21, 2003

COPYRIGHT © 2003 MICHAEL I. SHAMOS

The Internet Bubble

NASDAQ 19-YR CHART

NORMAL GROWTH

BUBBLE

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AUGUST 21, 2003

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What Happened?

• New Technology• Gold Rush• “Irrational Exuberance”• Disdain for profit• Fraud by Stock Brokers

MSEC ORIENTATION

AUGUST 21, 2003

COPYRIGHT © 2003 MICHAEL I. SHAMOS

The Bubble Expanded

NASDAQ 9-YR CHART

NORMAL

GROWTH

GOVERNMENTINTERNET

SPONSORSHIPENDS 5/95

INTEGRATEDWEB BROWSER

6/98

AMAZON IPO5/97

EBAY IPO5/98

WEBMETHODS IPO 2/00

NASDAQPEAK 3/00

WEBVANIPO 11/99

ETOYS IPO 5/99

BLODGETT AMAZONPREDICTION 12/98

PAINE WEBBERQUALCOMM

PREDICTION 12/99

SEPT. 11, 2001

WEBVAN BKRPT 7/01

ETOYS BKRPT 3/01

BOO.COM BKRPT 5/00

KITA

JULY 24, 2003

COPYRIGHT © 2003 MICHAEL I. SHAMOS

373

543

339

77 66

(projected)

10

U.S. Initial Public Offerings

Time2001 2002 2003200019991998

NASDAQIXIC

5000

2004

1000

MAY 12 CLOSE1541.40

MARCH 10, 20005048.62

MSEC ORIENTATION

AUGUST 21, 2003

COPYRIGHT © 2003 MICHAEL I. SHAMOS

The Index Phenomenon

• Most companies in an industry can’t beat their stock index

MSEC ORIENTATION

AUGUST 21, 2003

COPYRIGHT © 2003 MICHAEL I. SHAMOS

eCommerce Forecasting• B2B (World)

– Prediction in 1999: $1.3 trillion by 2003– Actual: $2.4 trillion (50% U.S.)– 2004: online B2B 10% of World Economic Product

• B2C (U.S)– Prediction in 1999: $108 billion by 2003– Actual: $95 billion (including 9/11, recession & war)

• Productivity– Prediction in 2000: $250 billion/yr by 2005– Actual pace: $450 billion/yr– Average saving $4,500/household, triple the tax cut

MSEC ORIENTATION

AUGUST 21, 2003

COPYRIGHT © 2003 MICHAEL I. SHAMOS

Auto Industry

• 60% of new-car buyers use the Internet• 53% use the Internet before a test drive• “Internet-influenced”• 48 million U.S. users visited automotive websites

in just March 2003• 4% of new-car buyers actually purchase on the

Internet

MSEC ORIENTATION

AUGUST 21, 2003

COPYRIGHT © 2003 MICHAEL I. SHAMOS

Retail

• 4Q (Christmas) online sales up 40% in 2002• Overall retail up 34% in 2002 to $48B• Increase of 30% expected in 2003• Real Estate

– In 2002, almost 50% of home buyers Internet-influenced

MSEC ORIENTATION

AUGUST 21, 2003

COPYRIGHT © 2003 MICHAEL I. SHAMOS

B2B eBusiness Growth

SOURCE: PWC

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AUGUST 21, 2003

COPYRIGHT © 2003 MICHAEL I. SHAMOS

Changing E-Business

Goal: attract VC moneyFocus: Speed, IPOMetric: Revenue growth,

not profit

Goal: Integrate EB within existing business.

Focus: Efficiency, optimization

Metric: Economic value

Static Brochure(1994-1996)

• Product information• Financial statements• Contact information

Transactions(1996-1999)

• Product catalog• Online ordering• Online payments• Order tracking• Build-to-order

Automated Business Processes (1999-)

• Personalized content• Interactivity• Real-time integrated data (warehouses)• Business intelligence (OLAP)

SOURCE: A. BHATTACHERJEE

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AUGUST 21, 2003

COPYRIGHT © 2003 MICHAEL I. SHAMOS

Native Language of Internet Users 03/03

SOURCE: GLREACH.COM

• ENGLISH WAS 49% IN 2001 40% IN 2002

• KOREAN DOWN FROM 4.4% IN 2002

• CHINESE GREW FROM 9.8% TO 11.9%, RISE OF 21% IN 1 YEAR

• ENGLISH WILL DROP TO UNDER 25%

MSEC ORIENTATION

AUGUST 21, 2003

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Language of Web Pages

English 68.4%

Japanese 5.9%

German 5.8%

Chinese 3.9%

French 3.0%

Spanish 2.4%

Russian 1.9%

Italian 1.6%

Portuguese 1.4%

Korean 1.3%

Other 4.4%

Total Web pages: 313 B

0.8% OF WORLDPOPULATION

SOURCE: VILAWEB.COM

MSEC ORIENTATION

AUGUST 21, 2003

COPYRIGHT © 2003 MICHAEL I. SHAMOS

The MSEC Program

MSEC ORIENTATION

AUGUST 21, 2003

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Who You Are• 31 students from 6 countries:

U.S. (9), Korea (18), China (1), Taiwan (1), France (1), Thailand (1)

• 23 international students: 74%, same as last year• 5 women: 16%

• M.S. (3)• MBA (2)• M.A. (2)

• Most popular first name: Seung (4). All exceptSeung-eul unique if middle name is included.

• Most popular surnames: Lee (4), Yang (3), Cho (2)

MSEC ORIENTATION

AUGUST 21, 2003

COPYRIGHT © 2003 MICHAEL I. SHAMOS

Who You Are

• Software/IT (10)• Recent graduates (6) • Consulting (4)• Government (2)• Management (non-IT) (2)• Engineering (1)• Insurance (1)

• Average age: 29

• Average years of work experience: 5

MSEC ORIENTATION

AUGUST 21, 2003

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Undergraduate Majors

• Computer Science (9)• Engineering & Science (7)

– Aerospace Engineering (1)– Chemical Engineering (4)– Electrical Engineering (2)– Mechanical Engineering (1)– Physics (1)

• Business/Administration/Economics (4)• Psychology/Political Science/Sociology (4)• Spanish (1)

MSEC ORIENTATION

AUGUST 21, 2003

COPYRIGHT © 2003 MICHAEL I. SHAMOS

Undergraduate Schools

CMU 1 SUNY (Buffalo) 1

Hankuk U Foreign Studies (Seoul) 2 SungKyunKwan U (Suwon) 1

Michigan State (East Lansing, MI) 1 Tsinghua University (Beijing) 1

National Tsinghua (Hsinchu, Taiwan) 1 U of California (Berkeley, CA) 1

New York U (NY) 1 U of California (Los Angeles) 1

Pohang U (Pohang) 1 U of Pittsburgh 1

Rensselaer Polytechnic (Troy, NY) 1 U of Southern California (LA) 1

Seoul National U (Seoul) 4 Washington U (St. Louis, MO) 1

Sogang U (Seoul) 3 Wake Forest (Winston-Salem, NC) 1

Soongsil U Seoul) 1 Yonsei U (Seoul) 4

Stanford (Palo Alto, CA) 1

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AUGUST 21, 2003

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Graduate Schools

Georgetown U (Washington) 1

Macalester College (St. Paul, MN) 1

National Tsinghua (Hsinchu, Taiwan) 1

Penn State (State College, PA) 1

U Massachusetts (Amherst, MA) 1

Yonsei U (Seoul) 2

Degrees: Comp. Sci./EE (4) Internet Technology (1) MBA (2)

MSEC ORIENTATION

AUGUST 21, 2003

COPYRIGHT © 2003 MICHAEL I. SHAMOS

What is eCommerce?

• Application of electronic technology to business process re-engineering

• How does technology affect business processes and enable new business models?

• How do business considerations influence technology uptake?

• You need to know business• You need to know technology• So the program is ½ business, ½ technology

MSEC ORIENTATION

AUGUST 21, 2003

COPYRIGHT © 2003 MICHAEL I. SHAMOS

The Technology Side• eCommerce Technology• Communications and Networking• Java for eCommerce• The Internet• Computer Security• Electronic Payment Systems• Web-based Information Architectures• Human-Computer Interaction• eCommerce Systems Design• Databases + electives• PRACTICUM

MSEC ORIENTATION

AUGUST 21, 2003

COPYRIGHT © 2003 MICHAEL I. SHAMOS

12-Month Plan

Aug - Oct Mini 1. Rigorous preparation CONFUSION

October Recruiting/job placement begins TERROR

Oct - Dec Mini 2. Rigorous preparation MAYBE I CAN DO THIS

Jan - Mar Mini 3. Applications, electives IT ALL MAKES SENSE

Mar - May Mini 4. Applications, electives THIS IS EASY

May - Aug Minis 5 - 6. Practicum IT COMES TOGETHER

Aug. 2004 GraduationIT WAS WORTH IT

MSEC ORIENTATION

AUGUST 21, 2003

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Opportunities• Most wired (and wireless) campus in the U.S.• Largest academic computer science research establishment in the U.S. (250

professionals). Ranked #1.• Business school (#17 U.S. News, #2 in Information Systems, #2 in Quantitative

Analysis, #3 in Production/Operations)• Computer Emergency Response Team• Birthplace of numerous eCommerce technologies:

– Lycos– NetBill– Postal Information-Based Indicia

• CMU graduates have developed:– Java– SSL– AltaVista

MSEC ORIENTATION

AUGUST 21, 2003

COPYRIGHT © 2003 MICHAEL I. SHAMOS

Student Clubs/Committees• Feedback Committee

– Organized by students– Committee of 3 meets with Directors within 2 weeks of start

of each mini– Purpose: report course problems, make suggestions

• Speakers Committee– Purpose: arrange for outside speakers

• eCommerce Club• Website Committee

– Works on eCommerce website

MSEC ORIENTATION

AUGUST 21, 2003

COPYRIGHT © 2003 MICHAEL I. SHAMOS

eCommerce Practicum

• A real problem from a real company that pays real money for a solution. 28 Practicums from 20 sponsors:

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AUGUST 21, 2003

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Automating the Rivers:

Port of Pittsburgh CommissionPracticum Project

2003

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AUGUST 21, 2003

COPYRIGHT © 2003 MICHAEL I. SHAMOS

eCommerce Technology 20-751

• Reading assignment for Monday, August 25:

Chapter 1 of Chan et al., E-commerce: Fundamentals and applications