eBusiness: the final frontier Professor Ken Birman Dept. of Computer Science Cornell University A New World! Networks everywhere Soon, wireless connections, even to very simple devices, based on the Bluetooth standard “Everything can talk to everything else” Business gaining efficiencies by eliminating paper in favor of b2b solutions Nobody was fond of paper; it won’t be missed And computers are very fast offering big gains in efficiency, flexibility Productivity (per employee) is rising Understanding It But understanding these trends isn’t easy Overwhelmed by excess of information Breathless pundits enthuse over the most minor new features Company valuations rocket, then crash. Market volatilities are setting records Is the new networked world “rational,” or some sort of a gambling casino? Our Goals In this part of the course: Learn about business models for the network Study e-risks to e-commerce, role of business people in technology decision making Understand technology issues underlying risks and business role in technical decision-making Today: Focus on how the Internet works and categories of businesses one finds in the e-business sector Questions How well does the Internet work and what can we do when it doesn’t work? How rapidly is it growing and where is the growth occurring? What sorts of business activities exist on and around the Internet? A network is like a “mostly reliable” post office Inside the Network A “router” Connect to rns.com Inside the Network Connect to rns.com Inside the Network Connect to reuters.uk Connect to rns.com Inside the Network Connect to reuters.uk Inside the Network Connect to reuters.uk Success! Inside the Network Success! Caveats Names like “rnets.com” are turned into numbers like “128.38.47.62” This is because computers work best with fixedlength numeric data These numbers actually fit into a “32-bit” word Think of things like this as minor technical detail that you need to know when setting up your computer but that have no real significance in the larger picture Information sent in packets, which have a maximum size – we call it “packet switching” Looks Like a Phone System … but it isn’t! Telephone systems have “real” circuits from you to me and provides guarantees of reliability Internet chops each operation into little packets that flow independently More like sending a letter than making a phone call Routes can change, although this is infrequent. The packets aren’t guaranteed to get there! Postman gets irritable and tosses out some mail… Internet vs. Telephony Features Non-Features Internet Packet-oriented Source, dest addresses Packets routed independently Best effort performance and reliability, no guarantees Shared router resources Reliability (except “on average”) Quality of service (e.g. expected performance) Connections (although TCP can give the impression of a connection) Telephone Circuit-oriented Fixed speed and reliability guarantees Sharing of switch resources: while a call is in progress, resources are tied up High speed: phone circuits come in a small number of “speeds” Packets: phone circuits carry continuous stream of bits Internet Stuff That doesn’t Work You can send Internet data on a phone line, but are limited to about 56kb. This is about 200 times slower than road-runner! Need a computer at the other end to receive it You can send voice over an Internet “connection” but First must turn it into a digital representation Since it isn’t reliable you often get drop-outs And since latency varies a lot you may get unexpected pauses Why isn’t the Internet totally reliable? Links can corrupt messages Rare in the high quality ones on the Internet “backbone” Relatively common with wireless connections Routers can get overloaded When this happens they drop messages As we’ll see, this is very common Your computer automatically resends lost packets to hide such events from you Some terminology A program is the code you type in A process is what you get when you run it A message is used to communicate between processes. Arbitrary size. A packet is a fragment of a message that might travel on the wire. Variable size but limited, usually to 1400 bytes or less. A protocol is an algorithm by which processes cooperate to do something using message exchanges. More terminology A network is the infrastructure that links the computers, workstations, terminals, servers, etc. It consists of routers They are connected by communication links A network application is one that fetches needed data from servers over the network A distributed system is a more complex application designed to run on a network. Such a system has multiple processes that cooperate to do something. How do distributed systems differ from network applications? Distributed systems may have many components but are often designed to mimic a single, non-distributed process running at a single place. “State” is spread around in a distributed system Networked application is free-standing and centered around the user or computer where it runs. (E.g. “web browser.) Distributed system is spread out, decentralized. (E.g. “air traffic control system”) What about the Web? Browser is independent: web servers don’t keep track of who is using them. Each request is self-contained and treated independently of all others. Cookies don’t count: they sit on your machine And the database of account info doesn’t count either… this is “ancient” history, nothing recent ... So the web has two network applications that talk to each other The browser on your machine The web server it happens to connect with… which has a database “behind” it You and the Web Cookie identifies this user, encodes past preferences HTTP request Web browser with stashed cookies Database Web servers are kept current by the database but usually don’t talk to it when your request comes in You and the Web Web servers immediately forget the interaction Reply updates cookie You and the Web Web servers have no memory of the interaction Purchase is a “transaction” on the database Thought Question When I shop on Amazon.com, I build up a “shopping cart” containing my tentative purchases Where does it live? In the server that handles billing? In the web server? On my computer? Answer: on my computer, in a cookie Internet Growth Trends ARPANET origins: just a few machines 1987-1985 “NSFnet” First large scale deployment of Internet Technologies Privatized in 1985 Now people talk about the “Next Generation Internet” but in fact, there is just one Internet Internet 2: Academic research project to study management and behavior of gigabit network links Today growing at 10-20% per month Even machines not connected to “the Internet” use Internet technology to talk to each other! Today’s Internet Hundreds of millions of users Works well for web, email, file transfer Not so well for audio or video And totally unacceptable for telephony Not many “critical” uses Critical systems tend to run on isolated, smaller “intranet” architectures Tomorrow’s Internet Billions, then tens of billions of computers and very small devices Wide range of connectivity models And increasingly critical uses Air traffic control, medical systems, banking, all sorts of eBusiness uses, military systems, disaster response… Open question: audio, video, telephony? 30% of North American Adults Shop on the Web (Jan 1998) Jan 98 35 30 25 Sep 95 Jan 97 20 15 10 5 0 Use WWW in last month Have searched for specific product info Searched WWW before a purchase Used WWW to make a purchase Source: Dennis A. Robertson, CTO, Motorola (1998) "Source: Internet Software Consortium (http://www.isc.org/)". Internet Revenues ($B) 25 20 Total 15 Access Advertising 10 Subscription 5 Online Purchase 0 1997 1999 2001 Source: Dennis A. Robertson, CTO, Motorola (1998) Internet Backbone BGP BGP BGP Categories of e-Business Backbone service provider (BSP) Provides highest speed data transfer Normally, a major long-distance phone company like MCI, Sprint, AT&T Its customers are independent service providers like Road Runner They pay steep fees to have a thick pipe connecting their regional network to the backbone 6 5 4 3 Billions $ 2 Source: International Data Corp 1 0 1998 2000 2002 Independent Service Provider BGP BGP BGP Categories of e-Business Backbone service provider (BSP) Independent service provider (ISP) Examples are RoadRunner, Lightspeed, MSN Customers connect by some form of modem They charge for patterns of use, speed, amount of web space available to users There are hundreds or thousands of them 40 35 Inter@ 30 25 20 15 10 Source: Inter@ctive Week (7-Jun-99) The industry standard (22-Mar-99) Techmall (11-Apr-99) 5 0 1997 1999 2001 2003 The industry standard Techmall Categories of e-Business Backbone service provider (BSP) Independent service provider (ISP) Application service provider (ASP) They take some function businesses used to handle internally, like human resources or supplier relationships (order processing) Using network connections they take this over for their customers Customer “sends out the laundry” Source: www.infotechtrends.com 10 9 8 7 6 5 4 3 2 1 0 Billions $ 2000 2002 2004 Lots of Companies do Payroll… Payrolls-R-Us Wants To Do Payroll for Everyone ASP Categories of e-Business Backbone service provider (BSP) Independent service provider (ISP) Application service provider (ASP) b2b or eCommerce player Companies that do business on the web Topic of Professor Conway’s lectures $35B in 2003 (Qwest Communications, 6-Aug-99) My Web Site Talks To Yours B2B Interactions Categories of e-Business Backbone service provider (BSP) Independent service provider (ISP) Application service provider (ASP) b2b or eCommerce player Edge-caching or web hosting They manage web pages for other companies An emerging need because heavily visited web sites get overloaded unless data is “replicated” $4.4B in 1999, $14.4B in 2003 (Yankee Group, 12-Jul-99) Send your Web Pages to Akamai, and They Handle Web Requests For You AKAMAI Web Hosting Categories of e-Business Switch and router vendor (CISCO, Nortel, Lucent) They sell the boxes that run the network But they don’t run the network 30 25 20 15 10 Source: Web Week (Nov. 1996) Network world (Sept. 1999) 5 0 1996 1998 2000 2002 Whole market High-end devices Categories of e-Business Switch and router vendor Computer vendor They sell the boxes that make use of the network Categories include servers, desktop, laptop, PDA, small devices Biggest growth will be in the smallest devices: think small, real, active… Categories of e-Business Switch and router vendor Computer vendor Platform vendor They sell software on which applications run Microsoft Windows, Linux, Java (a language that also is a platform), .NET (like Java), The term means “an extensible enabler” – the platform makes it easy for some class of applications to be developed and operated Categories of e-Business Switch and router vendor Computer vendor Platform vendor Middleware vendor Extends the platform with features the primary company didn’t address Makes sense because huge companies shy away from some very large “niche” markets For example, “message oriented middleware” Message oriented middleware market: $358M in 1997, $2.247B in 2002 Total middleware market $2.3B in 1997, $4.9B in 2002 (Gartner Group, 12-Jul-99) Categories of e-Business Switch and router vendor Computer vendor Platform vendor Middleware vendor Application vendor They sell the stuff we really use Examples are Microsoft Office, SAP, PeopleSoft, Lotus Notes Categories of e-Business .COM web sites E-Bay, TCWC: auctions, wine… Amazon.com: “catalog sales” eMaiMai: ultimate resource for products from mainland China AskJeeves: super search engine (plus advertising) www.subaru.com – my first choice for subaru models & specs www.irs.gov – typical of a new generation of web-based government service applications: “the future of government” These forms of eCommerce are a topic of other lecturers… you won’t hear much on it from me! Summary? E-Business is rapidly turning into a multi-hundred billion dollar market Lots of “niches” within the overall picture Growth rates are staggering and will continue For a while, at any rate Increasingly dominated by rollout of small devices Many business models Some discredited but others make good sense Better success with technology and with old-business players; “new age” web sites often flop Reality Check If we could shrink the Earth’s population to a village of precisely 100 people… with all existing human rations remaining the same, it would look like this: There would be 57 Asians, 21 Europeans, 14 from the Americas (North and South) and 8 Africans 51 would be female, 49 male 70 would be non-white, 30 white 70 would be non-Christian, 30 Christian 50% of the world’s wealth would belong to only 6 people. All would be Americans 80 would live in substandard housing 70 would be illiterate 50 would suffer from malnutrition 50 would never have made a telephone call 1 would be near death, 1 near birth Only 1 would have a college education 2 would own a computer and 1 would have access to the Internet Source: Dr. Brian H. Spitzberg, School of Communication, San Diego State University