E-Commerce -- E-Commerce Grows Up, And the Next Revolution Is Born
May. 12, 2000 (Network Computing - CMP via COMTEX) -- The past year may well go down in history as the dawning of the age of e-commerce. It's the year brick-and-mortar laggards figured out extending sales and partnerships to the Web is no longer just an option but a requirement. And it's the year dot-com ventures learned-the hard way-the mere novelty of a sales presence can't carry the day. Even millions of dollars spent on advertising does nothing to keep customers from abandoning poorly performing sites or, worse yet, from leaving businesses that fail to meet delivery timetables.
Already, the choice of underlying e-commerce software-server platforms is becoming clear and narrow for many businesses-even as the number of such platforms hits 60 or more. Architecturally, the applications-server component of these platforms must be based on Java/Enterprise JavaBeans (EJB) or on Microsoft. The proprietary options that led the market just a couple of years ago have already blossomed and dropped their petals.
And there are now logical best-of-breed options to pursue, depending on the size and integration needs of each business. IBM Corp. and Art Technology Group, for example, best address high-end merchants and suppliers' integration needs (especially back-end integration). While both companies provide a platform or toolkit approach, these toolkits are becoming rich enough to resemble many prebuilt, application-rich platforms. The best known of these high-end platforms includes personalization czar BroadVision and retail magnet Blue Martini Software. The comfort many companies find with Microsoft's applications development tends to rule the midmarket. Intershop Communications, InterWorld Corp., Open Market and the Sun-Netscape Alliance also remain popular choices-with Intershop offering some decided international advantages for an increasingly global e-commerce market.
Even as a wide variety of business-to-business vertical industry portals emerge, it's the business-to-consumer market and MRO (maintenance repair and operations) office-supply-type markets that remain the test bed for true supply-chain endeavors. And it's software-distribution nightmares-such as those that kept Hershey Kisses out of trick-or-treaters' bags last Halloween-that breed caution in moving supply chains beyond EDI and into more open Internet business relationships.
Conquering the Back End
The back-end integration needed to make B2B happen remains a tough challenge. Certainly XML will help organize and identify data required to make B2B transactions possible. But XML remains at a formative stage, with many platforms touting support for it but doing little more than providing HTML-XML translation. XML's real value rests in how it's used within applications or even directories to mix and match the sets of information needed to create business logic or transactions on the fly. XML also needs industry alignment behind an XML remote procedure call over HTTP.
The next tsunami ultimately lies with companies addressing the process-automation market-the products that provide a way for business partners to communicate and automate processes that range from engineering changes on the supply end to customized pricing on the channel side. Some of these players will bring XML-based data forward by hooking adapters to ERP (enterprise resource planning) systems. Others, like Bowstreet, tap extensively into directory infrastructures, which promise creation of a general purpose and, therefore, more flexible infrastructure for spelling out access rights, roles and privileges, managing these new infrastructures and storing and reassembling application logic on the fly. Some of the players to watch include Comergent Technologies, Extricity Software, Netfish Technologies, Vitria Technology and webMethods.
Until the promise of Java and XML plays out, however, laborious customized and manual integration remains e-commerce's principal challenge. On the business-to-consumer side, the task remains formidable-which helps explain why so little time is spent on routine tasks like properly configuring routers to prevent their use in denial-of-service attacks. Marketing has foisted quick time lines on IT, and larger companies are finding those schedules to go online remain unrealistic. The integration challenges are many. E-commerce/applications servers must mesh with back-end systems; platforms must be customized for a particular business. Fundamental deficits in some platforms (such as failure to support back orders) must be assessed, and platforms must be purchased by many organizations knowing their own customization work will pick up where the vendor left off. Logistics must be integrated into online buying systems. Databases must be integrated and optimized, and banking and business relationships must be forged. Networking services, caching, content management, security policies/hardware/software must be worked out, and major incompatibilities-such as firewalls and load-balancing appliances-must be addressed.
An important reason IBM's Net.Commerce pulled in top honors as an e-commerce platform is that IBM's Commerce Integrator, which sits atop its MQSeries, reaches out to at least 40 different platforms and software environments. It's a significant interim solution as directions are established toward Java with CORBA or EJB.
Letting Someone Else Do It
While most large businesses continue to build and host their own e-commerce sites, around 20 percent have found it more expedient to outsource at least part of that task. Late last year, Network Computing joined U.K.-based Netcraft to determine where Fortune 500 sites that also rely on digital certificates (a good indicator of e-commerce) are hosted. The effort yielded eight primary commerce hosting facilities-AT&T, Cable & Wireless, Digex, Exodus Communications, GTE Internetworking, IBM, Sprint and Uunet. If we'd also evaluated where many of the large dot-coms host, we probably would end up with a list that includes GlobalCenter, Qwest Communications and PSInet. Of the hosts, Sprint took top honors as both a collocation provider (basically providing networking infrastructure for hosting) and a full managed service provider, supplying networking and applications management (see "E-Commerce's Great 8," at www.networkcomputing.com/1101/1101f1.html) .
Standing Behind Service
Some important factors behind that victory have to do with the state of outsourcing-and the disappointing experience many companies have had with collocation and managed hosting. Sprint stood out because it claims 100 percent availability for multisite, load-balanced customers. It also stood out because of its ratio of overall staffing and support to customers. However, Sprint doesn't have the massive customer influx seen at some companies like Exodus and Uunet-and managing growth is one of the biggest problems hosting companies and their customers face. While some disappointed businesses are moving away from hosters and taking their e-commerce in-house, many others can be expected to move in the opposite direction.
For large businesses, the move to service providers will be incremental and business specific. Some businesses, eager for cost-reduced redundant network links, will opt for collocation services. Other companies, eager to put content closer to site visitors, will opt for content-distribution services, like those offered by Akamai. Still other businesses will look to services like Keynote Systems and Service Metrics to monitor site availability. And a whole new market will emerge for services designed to diagnose and fix problems at e-commerce sites, from companies like Appliant and InteQ. The service market, including ASPs (application service providers), can be expected only to grow, as the network and computer industry pursues an e-commerce restructuring that is even more daunting than the client-server revolution of recent history. With an increasingly dwindling supply of skilled workers and the increasingly complex nature of e-commerce integration, specialists and specialty services will become ever more important.
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