ECMM 6010, Fall 2005 Intro 1

Technology issues in Electronic Commerce

1. Basic Networking: How does the internet work

2. Web programming: JavaScript, PHP, SQL, XML

3. Cryptography

4. Other topics

ECMM 6010, Fall 2005 Intro 2

What is e-Commerce?

Many definitions … Wide view: Electronically based (commercial) activitiesNarrow view: Use of the internet to enable business transactions

For example:‘The use of the Internet and the web to transact business. More formally,digitally enabled commercial transactions between and among organizations and individuals.’

K. Laudon and C. Traves, E-commerce, Addison Wesley 2001

E-commerce and e-businessInternet terminology is still in a state of flux; nowhere is this more evident than in the past use of the terms e-commerce and e-business. Both have been used to describe any business activity which uses the Internet. However, some consensus is emerging in that the terms are gradually being employed in a more focused way. The term e-commerce is increasingly being used to describe online retailing, for example the use of the Web to sell books. The term e-business is increasingly being used to describe all business activities using the Internet, not just online retailing. D. Ince, Developing Distributed and E-commerce Applications, Addison Wesley 2002

ECMM 6010, Fall 2005 Intro 3

E-Economy

Richard Simpson, Director, Electronic Commerce Branch, Industry Canada

“It’s not just about how the ICT sector has grown, it’s about how ICTs have stimulated productivity, trade and investment in all sectors. “

The following slides are an excerpt from Simpson’s EMEC Seminar 2005

ECMM 6010, Fall 2005 Intro 4

Total Change: 0.04 0.40 0.41 0.62 1.31 1.37 -0.73 -1.12

Contributions to aggregate labour productivity growthAcceleration 1990-1995 to 1996-2002

Contributions to value added per person engaged, in percentage points

-1.25

-0.75

-0.25

0.25

0.75

1.25

Japan

Australia Canada

US

Mexico Ireland

Germany

UK

ICT-producing (manufacturing + services) ICT-using (services) Other activities

Source: The Economic Impact of ICT. OECD, 2004.

ECMM 6010, Fall 2005 Intro 5

0

20

40

60

80

100

120

Use of Internet

Have own Web site or homepage

Source: OECD, Information Technology Outlook 2004

Businesses with Internet Access and Web Site, 2003

(as a percentage of all firms)

ECMM 6010, Fall 2005 Intro 6

Broadband use continues to grow

24.818.117.6

17.1

15.7

15.7

14.8

13.813.8

13.5

0 5 10 15 20 25

S. Korea

Denmark

Netherlands

Canada

Taiwan

Switzerland

Belgium

Israel

Sweden

Japan

Broadband penetration per 100 inhabitants, top 10 countries

Source: Statistics Denmark, 2005

Per 100 inhabitants

ECMM 6010, Fall 2005 Intro 7

55%51%49%40%29%

65%

42%

0%

10%

20%

30%

40%

50%

60%

70%

1999 2000 2001 2002 2003

Percent of Households using the Internet regularly from home

Proportion of Internet households with high speed connection

Canadians are moving quickly to high-speedCanadians are moving quickly to high-speed

Source: Statistics Canada’s Household Internet Use Survey, 2004

Internet Use and Speed by Households

ECMM 6010, Fall 2005 Intro 8

E-Commerce Exceeding ExpectationsE-Commerce Exceeding Expectations

$-

$1,000.0

$2,000.0

$3,000.0

$4,000.0

$5,000.0

Worldwide

E-Commerce

(U.S. $Billions)

1999 2000 2001 2002 2003 2004 2005

1999 Estimates

2002 Estimates

Note: Charts reflect "Internet Commerce", a subset of electronic commerce that includes the purchase or trade of goods and services via the Internet / World Wide Web, but excludes financial services' transactions

Source: International Data Corporation, 1999 and 2002

ECMM 6010, Fall 2005 Intro 9

E-Commerce Growth in Canada: A Near 400% Increase since 2000

5.76.5

11.1

18.9

28.3

0

5

10

15

20

25

30

2000 2001 2002 2003 2004

$B (

Can

adia

n)

Source: Statistics Canada, Survey of Electronic Commerce and Technology, April 2005

Value of Online Sales 2000-2004

ECMM 6010, Fall 2005 Intro 10

2002 net income: $250 million2003 net income: $442 million2004 net income: $778 million

22 local language sites

2004 net income: $519 million 2003 net income: $238 million

2002 net income: $42 million

Hosts more than 20,000 small businesses

2004 net sales: $6.92 billion2003 net sales: $5.26 billion2002 net sales: $3.93 billion2001 net sales: $3.12 billion2000 net sales: $2.76 billion

……to capture new marketsto capture new markets

Jan.- July 2004 revenues: $1.35 billion Jan. - July 2003 revenues: $559.8 million

Jan. - July 2004 net income: $143 million Jan. - July 2003 net income: $58 million

Dot-com Stars are Still AroundDot-com Stars are Still Around

ECMM 6010, Fall 2005 Intro 11

“The Web players new assault should keep the productivity gains coming.”

Business Week, May 10 2004

“E-commerce will continue to change every kind of business, offline as well as online…”

The Economist, May 15 2004

E-Business has Entered the Economic MainstreamE-Business has Entered the Economic Mainstream

ECMM 6010, Fall 2005 Intro 12

In 2004, 1 in every 16 e-mails carried a virus

CanCERT™ is Canada’s first national Computer Emergency Response Team (CERT) operated 24/7 by EWA-Canada since 1998. The above graph depicts the number of attacks per month against CanCERT™ networks during the period August 2001 to March 2005.

Attacks Against CanCERT™ NetworksAugust 2001 - March 2005

Blaster/Nachi

Code Red I/II / Nimda Slammer

Windows Pop-up Spam

Agobot/Gaobot/Phatbot

0

10000

20000

30000

40000

50000

60000

70000

80000

Aug

01

Oct

01

Dec

01

Feb

02

Apr

02

Jun

02

Aug

02

Oct

02

Dec

02

Feb

03

Apr

03

Jun

03

Aug

03

Oct

03

Dec

03

Feb

04

Apr

04

Jun

04

Aug

04

Oct

04

Dec

04

Feb

05

Nu

mb

er

Internet Threats: Incidents are increasingInternet Threats: Incidents are increasing

Source: MessageLabs, December 6, 2004Source: MessageLabs, December 6, 2004

ECMM 6010, Fall 2005 Intro 13

43 43

0

20

40

60

80

100

Concerned withSecurity

Concerned WithPrivacy

43 43

0

20

40

60

80

100

Concerned withSecurity

Concerned WithPrivacy

Source: Ekos, May 2005

BusinessBusiness ConsumersConsumers55

46

0

20

40

60

80

100

Concerned withSecurity*

Concerned WithPrivacy**

5546

0

20

40

60

80

100

Concerned withSecurity*

Concerned WithPrivacy**

Source: Ekos, January 2005

Ongoing concerns about privacy and securityOngoing concerns about privacy and security

% of businesses identifying barrier as “significant” to adoption of e-business

* Not willing to give my credit card information over the Internet to purchase from a well-known store

** I mind companies using information about me even if I know about it and can stop it.

ECMM 6010, Fall 2005 Intro 14

Spam, The Internet "KILLER"Spam, The Internet "KILLER"

Source: Messagelabs, 2005

ECMM 6010, Fall 2005 Intro 15

• Estimates of the annual cost of spam to the U.S. economy

– $10 billion (Ferris Research)

– $87 billion (Nucleus Research)

• Radicati Group and Message Labs estimate worldwide cost to businesses at $20.5 billion

• Loss of public confidence in Internet communications

• 25% of Internet users have curtailed their use of e-mail because of spam (Pew Foundation-2003)

The costs of spamThe costs of spam

End: Simpson slides

ECMM 6010, Fall 2005 Intro 16

Technology

Business

Law &Policy

eCommerce

ECMM 6010, Fall 2005 Intro 17

E-Commerce & Technology

• Technology should not be at the center of your business case.

• However, you need a good understanding of technology to enable your business

ECMM 6010, Fall 2005 Intro 18

E-Commerce I (1995-2000)

Explosive growth, dot.com collapse

E-Commerce II (2001-2005)

Reassessment of e-commerce companies