eCommerce Technology
20-751
Lecture 1:
eCommerce Technology Overview
20-751 ECOMMERCE TECHNOLOGY
SUMMER 2002
COPYRIGHT © 2002 MICHAEL I. SHAMOS
Course Administration
• Instructor: Michael Shamos (shamos@cs.cmu.edu)
• Teaching assistant:
Saumitra Das (smdas@andrew.cmu.edu)
• Course web page: through Blackboard or
http://euro.ecom.cmu.edu/program/courses/tcr751/official.shtml
• Slides posted on web page the night before lecture
• 14 lectures, 4 homeworks, 1 final exam
• Grading
– Homework 40% (10% each)
– Class participation 10%
– Final exam 50%
20-751 ECOMMERCE TECHNOLOGY
SUMMER 2002
COPYRIGHT © 2002 MICHAEL I. SHAMOS
Working Together
•
•
•
•
•
•
You may (and should) study together and discuss homework
You should surf the Web to learn more about course topics
BUT: ALL WORK YOU SUBMIT MUST BE YOURS ALONE
You must list the names of the people you worked with
You must give credit for any material that is not yours
If you need to include material from another source, state
exactly where it came from (give URL, etc.)
• DO NOT ATTEMPT TO COPY MATERIAL FROM WEB PAGES
AND SUBMIT IT AS YOUR HOMEWORK
You will be caught. Your career will end. Fast.
• Penalties for violation: zero credit, course failure, expulsion
• See University Policy on Cheating and Plagiarism
20-751 ECOMMERCE TECHNOLOGY
SUMMER 2002
COPYRIGHT © 2002 MICHAEL I. SHAMOS
What is Commerce?
• Middle French, from Latin commercium, from
com- (together)+ merc- (merchandise) (1537)
“The exchange or
buying and selling of commodities
on a large scale
involving transportation from place to place.”
• Buying and selling ( transactions )
NEED TECHNOLOGY
TO SUPPORT
• Large scale (  scalability )
ALL OF THESE
• Transportation ( supply chain )
• Every business process in the world must be
re-engineered: “Can it be made electronic?”
20-751 ECOMMERCE TECHNOLOGY
SUMMER 2002
COPYRIGHT © 2002 MICHAEL I. SHAMOS
Commerce (8000 B.C.)
BUYER
FINDS
SELLER
SELECTION
OF GOODS
NEGOTIATION
SALE
PAYMENT
DELIVERY
INFORMATION
PHYSICAL+
INFORMATION
20-751 ECOMMERCE TECHNOLOGY
POST-SALE
ACTIVITY
SUMMER 2002
COPYRIGHT © 2002 MICHAEL I. SHAMOS
eCommerce
SOME TECHNOLOGIES USED:
SEARCH ENGINE
ON-LINE CATALOG
RECOMMENDER AGENT
SOME INFORMATION GATHERED:
BUYER
FINDS
SELLER
SEARCH BEHAVIOR
BROWSING BEHAVIOR
CUSTOMER PREFERENCES
CONFIGURATOR
SHOPPING BOT
SELECTION
OF GOODS
EFFECTIVENESS OF PROMOTIONS
BARGAINING STRATEGIES
AGGREGATOR
AUTOMATED AGENTS
TRANSACTION PROCESSOR
NEGOTIATION
PRICE SENSITIVITIES
PERSONAL DATA
SALE
MARKET BASKET
DATA INTERCHANGE
CRYPTOGRAPHY
PAYMENT
E-PAYMENT SYSTEMS
TRACKING AGENT
CREDIT/PAYMENT INFORMATION
DELIVERY REQUIREMENTS
DELIVERY
ON-LINE PROBLEM REPORTS
INFORMATION
PHYSICAL+
INFORMATION
ON-LINE HELP
BROWSER SHARING
POST-SALE
ACTIVITY
FOLLOW-ON SALES OPPORTUNITIES
INTERNET TELEPHONY
20-751 ECOMMERCE TECHNOLOGY
CUSTOMER SATISFACTION
SUMMER 2002
COPYRIGHT © 2002 MICHAEL I. SHAMOS
Marketplace Examples
• Corporate portal (UTC vs. hyperbolic tree)
• Shopping search (buyersindex.com)
• Electronic auctions (eBay)
• Pure eCommerce (Corbis images, MP3)
20-751 ECOMMERCE TECHNOLOGY
SUMMER 2002
COPYRIGHT © 2002 MICHAEL I. SHAMOS
The Electronic Supply Chain
INFORMATION
GOODS
Deliver
Suppliers’
Supplier
Source
MONEY
Plan
Make
Deliver
Supplier
Source
Make
Your Company
(internal or
external)
Deliver
Source
Make
Deliver
Customer
(internal or
external)
Source
Customer’s
Customer
CORPORATE
BOUNDARIES
SOURCE: A. BIFFI, PF. CAMMUSONE
20-751 ECOMMERCE TECHNOLOGY
SUMMER 2002
COPYRIGHT © 2002 MICHAEL I. SHAMOS
Why eCommerce? Why Now?
• Computers are faster
– 1972:
1 million instructions/sec
– 2002:
1 billion instructions/sec
• Have more main memory
– 1972:
0.125 megabytes
– 2002:
512.0 megabytes
• Cost less
– 1972:
$4,000,000
– 2002:
$1,000
• Speed/size/cost improvement factor: 16 billion
20-751 ECOMMERCE TECHNOLOGY
SUMMER 2002
COPYRIGHT © 2002 MICHAEL I. SHAMOS
Progress of Technology
• Have more disk storage
– 1971:
– 2001:
IMPROVEMENT: 8000 x
10 MB
80,000 MB (soon 1 terabyte = 1000GB)
• Higher communication speeds
–
–
–
–
–
–
Human speech:
30 bits/sec
1971 Modem
300 bits/sec
2001 Modem:
56,000 bits/sec
T1 line:
1,544,000 bits/sec
Internet 2:
1,000,000,000 bits/sec
Nortel:
2,000,000,000,000 bits/sec in 1 fiber
(entire U.S. telephone traffic)
20-751 ECOMMERCE TECHNOLOGY
SUMMER 2002
1971-2001
IMPROVEMENT:
6 BILLION x
COPYRIGHT © 2002 MICHAEL I. SHAMOS
eCommerce Technology
•
•
•
•
•
•
Infrastructure
Wireless technologies
Web Architecture
Search engines
Access security
Cryptographic security
•
•
•
•
•
•
Data interchange
Web content delivery
Mass personalization
Data mining
Intelligent agents
M2M commerce
• Electronic payments
20-751 ECOMMERCE TECHNOLOGY
SUMMER 2002
COPYRIGHT © 2002 MICHAEL I. SHAMOS
eCommerce Infrastructure
• What worldwide structure is required to support
eCommerce?
• Network + communications
• Machines
• Software
• Protocols
• Security
• Payment
– interface to banking systems
20-751 ECOMMERCE TECHNOLOGY
SUMMER 2002
COPYRIGHT © 2002 MICHAEL I. SHAMOS
The Internet
• The fundamental technology linking business and
people around the world in less than 1 second
– Nothing competes with it
• How does it work?
• How big is it?
• Who owns it? Who governs it?
• How does it grow? How big can it get?
• What architecture allows this?
• What are the limitations?
20-751 ECOMMERCE TECHNOLOGY
SUMMER 2002
COPYRIGHT © 2002 MICHAEL I. SHAMOS
The Internet
•
•
•
•
•
•
Protocols (TCP/IP, HTTP)
Addressing schemes
Domain names, nameservers
URLs
Browsers
Programming
– HTML, JavaScript, Perl, Common Gateway
Interface (CGI)
– Java, Python, JSP, …
20-751 ECOMMERCE TECHNOLOGY
SUMMER 2002
COPYRIGHT © 2002 MICHAEL I. SHAMOS
Web Architecture
How are web sites constructed?
TIER 4
Database
TIER 3
Applications
TIER 2
Server
TIER 1
SOURCE: INTERSHOP
20-751 ECOMMERCE TECHNOLOGY
SUMMER 2002
COPYRIGHT © 2002 MICHAEL I. SHAMOS
mCommerce
•
•
•
•
eCommerce independent of physical location
Anything, anytime, anywhere
Which devices?
What is the technology?
– How to merge the telephone, cellphone, and cable networks
with the Internet?
• Is it possible?
• How much mobile eBusiness will be conducted?
• How will it affect daily life and economics?
20-751 ECOMMERCE TECHNOLOGY
SUMMER 2002
COPYRIGHT © 2002 MICHAEL I. SHAMOS
Wireless Technologies
• Can’t get (much) away from radio
• Differences between wireless and wired
communication
• Cells
• Shared medium: SDMA, FDMA, TDMA, CDMA
• Frequency allocations
• 1G, 2G, 2.5G, 3G, 4G
• Wireless LAN: IEEE 802.11
• Bluetooth
• WAP, iMode
20-751 ECOMMERCE TECHNOLOGY
SUMMER 2002
COPYRIGHT © 2002 MICHAEL I. SHAMOS
Search Engines
• Finding web pages
– Crawlers, spiders, bots
• Query interfaces
• Retrieval methods
– Indexing
– Document ranking
• Spamdexing
– Artificially altering retrieval order
• Document clustering
• Multilingual issues
• Multimedia retrieval
20-751 ECOMMERCE TECHNOLOGY
SUMMER 2002
COPYRIGHT © 2002 MICHAEL I. SHAMOS
Access Security
• Access control
– authorization / authentication / identity verification
• Authentication
– something you know: passwords
– something you have: smart card
– something you are: biometrics
– someplace you are: GPS
• Network protection, firewalls, proxy servers
• Intrusion detection
• Denial of service (DOS) attacks
• Viruses, worms
20-751 ECOMMERCE TECHNOLOGY
SUMMER 2002
COPYRIGHT © 2002 MICHAEL I. SHAMOS
Cryptographic Security
• Secrecy
– information cannot be used if intercepted
• Authentication
– We’re sure who the parties are
• Integrity
– data cannot be altered
• Non-repudiation
– sender cannot deny sending
• Cryptography
– symmetric encryption (DES, Rijndael)
– public key cryptosystems (RSA)
– digital signatures & certificates, public key infrastructure (PKI)
20-751 ECOMMERCE TECHNOLOGY
SUMMER 2002
COPYRIGHT © 2002 MICHAEL I. SHAMOS
Electronic Payments
• Forms of money
– token (cash), notational (bank account), hybrid (check)
• Credit-card transactions
– Secure protocols: SSL, SET
•
•
•
•
•
•
Automated clearing and settlement systems
Smart cards, electronic cash, digital wallets
Micropayments
Wireless payments
Electronic delivery of goods
Electronic bill presentment and payment
– Moore
20-751 ECOMMERCE TECHNOLOGY
SUMMER 2002
COPYRIGHT © 2002 MICHAEL I. SHAMOS
eCommerce Data Exchange Needs
RFQs
Ship Notices
Catalogs
Letters of Credit
Quotations
Purchase Orders
Electronic Payments
Bills of Lading
Invoices
20-751 ECOMMERCE TECHNOLOGY
SUMMER 2002
COPYRIGHT © 2002 MICHAEL I. SHAMOS
Data Interchange
• How can sites exchange information without prior
agreement?
– What do the data fields mean? price, extended price, unit
price, prix, цена, τιμή, 값, X’AC12’
– XML: Extensible Markup Language
• How can the content be separated from form (visual
appearance)?
• How can data formats and structures be
communicated?
– What does the hex string “65436F6D6D65726365” mean?
– ASN.1, Basic Encoding Rules (BER)
20-751 ECOMMERCE TECHNOLOGY
SUMMER 2002
COPYRIGHT © 2002 MICHAEL I. SHAMOS
Web Content Delivery
• Buyer/seller communication requires content exchange
• Effectiveness of communication requires multimedia
content: audio, video, animations, . . .
• Critical resource: bandwidth (channel capacity)
• Unicast, multicast, broadcast
• Compression
• Content preparation, personalization
• Content storage
• Caching, mirrors, surrogates
• Content Delivery Networks (CDNs), Akamai
• Streaming
20-751 ECOMMERCE TECHNOLOGY
SUMMER 2002
COPYRIGHT © 2002 MICHAEL I. SHAMOS
Mass Personalization
• Treating each user as an individual
– key is INFORMATION
• How to acquire and store information about
customers
– Cookies
– Question and response
– Clickstream analysis
– External databases. Allegheny County
• How to use information effectively and instantly
• Personalization technology
• Customization: Lands’ End
20-751 ECOMMERCE TECHNOLOGY
SUMMER 2002
COPYRIGHT © 2002 MICHAEL I. SHAMOS
Data Mining & Privacy technology
• Extracting previously unknown relationships from
large datasets
• Discovery of patterns
• Predicting the future
– past behavior best predictor of future purchasing
• Market basket analysis
– diapers/beer
• Privacy
– P3P
20-751 ECOMMERCE TECHNOLOGY
SUMMER 2002
COPYRIGHT © 2002 MICHAEL I. SHAMOS
Data Mining Tools
• Visualization (“seeing” the data) Table Lens
• Predictive Modeling
• Database Segmentation
– Classify the users
• Link Analysis
– Association discovery
• Neural networks
– Systems that learn from data
• Deviation Detection
– Are any of the data unusual? Fraud detection
20-751 ECOMMERCE TECHNOLOGY
SUMMER 2002
COPYRIGHT © 2002 MICHAEL I. SHAMOS
Intelligent Agents
•
•
•
•
•
Programs to perform tasks on your behalf
Metasearchers, shopping bots, news agents, stock
agents, auction bots, bank bots
How to make agents “intelligent”
– Rule-based systems
– Knowledge representation
Agents that learn
– Inductive inference
Negotiation agents
Avatars (characters in human form)
SYLVIE from VPERSON
20-751 ECOMMERCE TECHNOLOGY
SUMMER 2002
COPYRIGHT © 2002 MICHAEL I. SHAMOS
M2M Commerce & Auction Models
• How can machines do business with other
machines?
• Electronic discovery
• Electronic negotiation
• Auctions
• Web Services
– Idea: server does more than deliver a web page
20-751 ECOMMERCE TECHNOLOGY
SUMMER 2002
COPYRIGHT © 2002 MICHAEL I. SHAMOS
Q&A
20-751 ECOMMERCE TECHNOLOGY
SUMMER 2002
COPYRIGHT © 2002 MICHAEL I. SHAMOS
The eCommerce Process
• Which of the steps are “bittable”?
• Buyers and sellers find each other
– Communication (via Networking, the Internet,
Core Java and Web-Based Information
Architectures)
– Human-Computer Interaction, Multimedia
– Intermediaries
• Disintermediation
• Negotiation
– Electronic Negotiation, Intelligent agents
– Foundations of Electronic Marketplaces
20-751 ECOMMERCE TECHNOLOGY
SUMMER 2002
COPYRIGHT © 2002 MICHAEL I. SHAMOS
The eCommerce Process
• Transaction
– Transaction processing, Databases
– Electronic Payment Systems,
– Computer Security,
– eCommerce Architecture
• Order fulfillment
– Manufacture (manufacturing systems)
– Delivery (tracking systems)
– Supply Chain Management
20-751 ECOMMERCE TECHNOLOGY
SUMMER 2002
COPYRIGHT © 2002 MICHAEL I. SHAMOS
The eCommerce Process
• Post-sale events
– Customer Service and Help Facilities
– Reorder, restock
• Accounting
– Transaction processing
– Interoperability between online and legacy
systems
• Data analysis
– Data Mining
20-751 ECOMMERCE TECHNOLOGY
SUMMER 2002
COPYRIGHT © 2002 MICHAEL I. SHAMOS
Communications and Networking
• How do machines communicate?
• What are the limitations?
• How can 1010 users and 1012 machines be
connected?
• What is invisible computing? ad hoc networking?
• Speed, bandwidth, latency
• Network plumbing
– cable, fiber, switches, gateways, bridges, routers
• Network protocols
– connecting networks to each other
20-751 ECOMMERCE TECHNOLOGY
SUMMER 2002
COPYRIGHT © 2002 MICHAEL I. SHAMOS
Multimedia
• How can multimedia be represented and transmitted?
– Text, graphics, speech, music, video, movies,
virtual reality
• What are the limitations?
– Speed, resolution, fidelity, color
• How are multimedia created?
• How are they stored?
– File formats: GIF, TIFF, JPEG, MPEG, ...
• How are they displayed (put in web pages)?
• How are they indexed?
20-751 ECOMMERCE TECHNOLOGY
SUMMER 2002
COPYRIGHT © 2002 MICHAEL I. SHAMOS
Manufacturing
FORECAST
DEMAND
PROCURE
MATERIALS
DESIGN
PRODUCT
PROCESS
ENGINEERING
DETERMINE
PRICE
QUALITY
CONTROL
PRODUCTION
PROCESS
CONTROL
INVENTORY
STATUS
REPORTING
INFORMATION
FLOW
SHIPMENT
GOODS
FLOW
20-751 ECOMMERCE TECHNOLOGY
SUMMER 2002
CUSTOMER
SERVICE
COPYRIGHT © 2002 MICHAEL I. SHAMOS
e-Manufacturing
ELECTRONIC BUSINESS INTEGRATION
DATA
MINING
GROUPWARE
KNOWLEDGE
WORK SYSTEMS
DESIGN
PRODUCT
FORECAST
DEMAND
PRODUCT DATA
MANAGEMENT (PDM)
PROCESS
ENGINEERING
DETERMINE
PRICE
BID MGMT
CPFR
INTEGRATED
BUSINESS
COMMUNITIES
BUILD-TO-ORDER
PROCURE
MATERIALS
BOM
SUPPORT
QUALITY
CONTROL
PRODUCTION
SUPPLY CHAIN
MANAGEMENT
INVENTORY
COLLABORATIVE
PRODUCT
COMMERCE
INFORMATION
FLOW
eFULFILLMENT
VENDOR-MANAGED
REPLENISHMENT
eLOGISTICS
SHIPMENT
GOODS
FLOW
20-751 ECOMMERCE TECHNOLOGY
SUMMER 2002
HUBS
DYNAMIC
PRICING
DATA
MINING
PROCESS
CONTROL
ePROCUREMENT
AUCTIONS
EXCHANGES
WORKFLOW
SYSTEMS
STATUS
REPORTING
CUSTOMER
SERVICE
CRM
COPYRIGHT © 2002 MICHAEL I. SHAMOS