MSEC Orientation 2003
Michael I. Shamos
Co-Director
MSEC ORIENTATION
AUGUST 21, 2003
COPYRIGHT © 2003 MICHAEL I. SHAMOS
Is eCommerce dead?
MSEC ORIENTATION
AUGUST 21, 2003
COPYRIGHT © 2003 MICHAEL I. SHAMOS
May 12, 2003
SOURCE: PWC
Which is the largest
used-car dealer in the U.S.?
MSEC ORIENTATION
AUGUST 21, 2003
COPYRIGHT © 2003 MICHAEL I. SHAMOS
The Internet Bubble
NASDAQ 19-YR CHART
BUBBLE
NORMAL GROWTH
MSEC ORIENTATION
AUGUST 21, 2003
COPYRIGHT © 2003 MICHAEL I. SHAMOS
What Happened?
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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
PEAK 3/00
WEBMETHODS
IPO 2/00
BOO.COM BKRPT 5/00
WEBVAN
IPO 11/99
ETOYS BKRPT 3/01
ETOYS IPO 5/99
GOVERNMENT
INTERNET
SPONSORSHIP
ENDS 5/95
INTEGRATED
WEB BROWSER
6/98
EBAY IPO
5/98
AMAZON IPO
5/97
BLODGETT AMAZON
PREDICTION 12/98
WEBVAN BKRPT 7/01
SEPT. 11, 2001
PAINE WEBBER
QUALCOMM
PREDICTION 12/99
NORMAL
GROWTH
NASDAQ 9-YR CHART
MSEC ORIENTATION
AUGUST 21, 2003
COPYRIGHT © 2003 MICHAEL I. SHAMOS
U.S. Initial Public Offerings
MARCH 10, 2000
5048.62
543
5000
NASDAQ
IXIC
373
339
MAY 12 CLOSE
1541.40
1000
(projected)
77
1998
KITA
1999
2000
2001
JULY 24, 2003
10
66
2002
2003
2004
Time
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
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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
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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
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4Q (Christmas) online sales up 40% in 2002
Overall retail up 34% in 2002 to $48B
Increase of 30% expected in 2003
Real Estate
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In 2002, almost 50% of home buyers Internet-influenced
MSEC ORIENTATION
AUGUST 21, 2003
COPYRIGHT © 2003 MICHAEL I. SHAMOS
B2B eBusiness Growth
SOURCE: PWC
MSEC ORIENTATION
AUGUST 21, 2003
COPYRIGHT © 2003 MICHAEL I. SHAMOS
Changing E-Business
Static Brochure
(1994-1996)
• Product information
• Financial statements
• Contact information
Transactions
(1996-1999)
• Product catalog
• Online ordering
• Online payments
• Order tracking
• Build-to-order
Goal: attract VC money
Focus: Speed, IPO
Metric: Revenue growth,
not profit
Automated Business
Processes (1999-)
• Personalized content
• Interactivity
• Real-time integrated
data (warehouses)
• Business intelligence
(OLAP)
Goal: Integrate EB within
existing business.
Focus: Efficiency,
optimization
Metric: Economic value
SOURCE: A. BHATTACHERJEE
MSEC ORIENTATION
AUGUST 21, 2003
COPYRIGHT © 2003 MICHAEL I. SHAMOS
Native Language of Internet Users 03/03
• 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%
SOURCE: GLREACH.COM
MSEC ORIENTATION
AUGUST 21, 2003
COPYRIGHT © 2003 MICHAEL I. SHAMOS
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:
0.8% OF WORLD
POPULATION
313 B
SOURCE: VILAWEB.COM
MSEC ORIENTATION
AUGUST 21, 2003
COPYRIGHT © 2003 MICHAEL I. SHAMOS
The MSEC Program
MSEC ORIENTATION
AUGUST 21, 2003
COPYRIGHT © 2003 MICHAEL I. SHAMOS
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 except
Seung-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
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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
COPYRIGHT © 2003 MICHAEL I. SHAMOS
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
MSEC ORIENTATION
AUGUST 21, 2003
COPYRIGHT © 2003 MICHAEL I. SHAMOS
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
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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
Graduation
IT WAS WORTH IT
MSEC ORIENTATION
AUGUST 21, 2003
COPYRIGHT © 2003 MICHAEL I. SHAMOS
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
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A real problem from a real company that pays real
money for a solution. 28 Practicums from 20 sponsors:
MSEC ORIENTATION
AUGUST 21, 2003
COPYRIGHT © 2003 MICHAEL I. SHAMOS
Automating the Rivers:
Port of Pittsburgh Commission
Practicum Project
2003
MSEC ORIENTATION
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
MSEC ORIENTATION
AUGUST 21, 2003
COPYRIGHT © 2003 MICHAEL I. SHAMOS