E-BUSINESS MODELS

INTERNET BUSINESS LANDSCAPE

What is current Internet Business Landscape?

Your Examples?

Fundamentals of improving technology and its use are still valid. What are these fundamentals?

Internet Business Landscape

Security and stability remain unsolved...

(that is why air is out of the balloon)

Prediction: slower pace of the developments

Reevaluation of the brick- and- mortar business fundamentals:

are these really at work in the Internet business landscape?

Internet Business LandscapeFundamentals

Your Examples?

Technology Capabilities: pre and post Internet

Technology capabilities example:progression of major paradigms in

HCI

ERA PARADIGM IMPLEMENTATION

1950s None Switches, wires, punched cards

1970s Typewriter Command-line interface

1980s Desktop GUI/WIMP

2000s Natural interaction PUI (perceptual User Interfaces (multimodal input and output)

Technology capabilitiespre- & post Internet

• Closed standards limit participation to individuals and companies with access to proprietary software

• Proprietary ownership of the platform enables owner to set commerce standards and policies

• Rigid design limits business functionality and flexibility

• High cost, long time frame, specialized expertise to develop business solutions provide powerful barriers

• Open standards enable global connectivity; anyone with the browser and Internet access can

• Shared ownership of the network; collaboration and coordination required to define and manage commerce

• Modular, flexible software and infrastructure enables business flexibility

• Lower cost (but still costly) and expertise and shorter time frame to develop business solutions (lowers barriers to entry?)

Business community perspective

• Introducing new business model is like introducing new virus--it disrupts status quo

Who was Enron and what happened?

Survival of new model depends on process of adaptation--both business community and model are altered

Business community perspective

• B2C

• B2B– C2C– C2B

Business community perspective

Consider B2C

• Experience of buying a product offline

• Experience of buying a product online

• amazon.com-INTRODUCTION OF CLICK AND ORDER into brick- and- mortar industry

View from LandsEndB2C

• Please visit

www.landsend.com

and investigate “Shop with a Friend” service

Software

• A unique good

• A unique industry

Can be viewed from many unique perspectives

Supplier value chain for software vendor

The supplier value chain from software

vendor to user has four primary stages

INTERNAL SOFTWARE ARCHITECTURE

Applications

Integrative services

Processing Storage Connectivity

Application components

Generic services

Common representations

A separation of technological progress from applications

What is going on?

• Information appliances

• Pervasive computing

• Mobile and nomadic information technology

• A component marketplace

• Evolving pricing and business models

•View from CISCO

Internet Business Landscape

View from Cisco

View from Cisco Please visit

http://www.cisco.com/warp/public/750/icorporation/index.html

Consider

Cisco iQ | Five Changes You Must Make to Your Internet Strategy Now

Pattern of business model evolution

• Mortar

• Click- and -order

• Click- and- mortar

has impact on

revenue, cost, assets

Some Reminders

• Channel- any series of firms or individuals who participate in the flow of products and services from producers to consumers

• Market- a group of potential customers with similar needs that are willing to exchange something of value with sellers offerings goods and services

Some Reminders

• Vertical Market--channel system in which whole channel focuses on the same target market at the end of the channel

• Horizontal Market--channel system in which channel focuses on broad target markets at the end of the channel

Some Reminders

• Portal- Gateway to access

An example of an early portal (pre-Internet)

American Airlines’ SABRE system

• Portal- Gateway and destination

Vertical-pertaining to a single area of interest

Horizontal-pertaining to broad range of interests

Some Reminders

• Yahoo!- A horizontal portal

• WebMD- A vertical portal

Dilemma

• Industrial age business model took long to develop

• We have a shorthand for understanding how a business was structured, how it interacted with others in the industry, how it made money, how it delivered value to customers, suppliers, partners, employees

• It also told everyone who did business with us what we can expect

“ I sell cars”

Industrial-age business model is so familiar that it no longer requires deep explanation

Internet

• Provides a new channel for procuring and distributing products and services

• Allows invention of new models

Business Model

• A description of complex business that enables study of its structure, relationships among structural elements, and how it will respond in the real world

Clarity about:

• assumptions, parameters

• structure, relationships, economics, dynamics