How can you make money from the Web? How many different answers have you heard to that question? How many companies have gotten it right so far? And how will you find the answers for your own company? As with almost every gold rush, the current money makers on the Web are still the suppliers, building tools and advising the miners, while the miners struggle to make ends meet. Dozens of vendors promise solutions for almost every Web e-commerce need. How can you find what is right for you?
To improve your odds, you must know your needs, the tools that will help you meet them, and how to spot the best solutions amid a host of pretenders. After reading this article you should have a good framework for organizing your e-commerce initiatives; a good understanding of some current Web e-commerce offerings, their benefits, and their shortcomings; and a way to evaluate current and future solutions in a way that fits your company's goals -- not those of your vendor.
Fundamentally, commerce is about buying and selling. In the broadest interpretation, parts of commerce have been performed electronically for decades: credit card authorizations, telemarketing, and the like. The increasing availability of strong encryption techniques has made possible secure ordering, payment, and even contracts over open computer networks. In this article, I will concentrate on the buying and selling transactions that take place over the Internet using Web servers. To discuss the strengths and weaknesses of Web e-commerce applications, I divide the buying and selling process into four broad categories: before the sale, making the sale, getting the goods, and after the sale. (See Table 1, page 89, for a breakdown of each stage.)
Buyers, on the other hand, are shopping. They want to browse according to their interests, research the possibilities, evaluate different suppliers, and eventually come to a decision. Shoppers may want to enter a profile of interests to find likely matches or to see what similar buyers recommend. Electronically, this process can involve search engines, intelligent agents, applications, and chat and bulletin board facilities. As buyers and sellers come together, they may converge onto a catalog, which could lead both to enter the next stage of commerce: making the sale.
In addition, although privacy is important before the sale (for user profiles, for example), encryption technologies become critical when making the sale. The current minimum requirement is that buyers and sellers use SSL to secure their payment information. Soon SET, and over time other payment systems, will gain enough users to be required as well. (For more information on the SET 1.0 standards, see my sidebar in this issue on page 91.)
If the products are soft goods -- information access or a software download, for instance -- buyers on the Web expect immediate delivery. If the products are hard goods -- such as auto parts, DRAMs, clothing, or books -- buyers expect shipment at least as fast as if they had ordered by phone. This kind of responsiveness requires tight integration with the sellers' other systems for order-entry, billing, shipping, customer information, and customer support. If a buyer should call a seller for support later, the seller should know the customer's record across the company. Likewise, if a buyer does not use the Web to make a purchase but comes back to the seller's Web site for support or order status, the Web site should recognize him or her as a customer. Integration with other systems could easily extend beyond the boundaries of the company to UPS or Federal Express (for shipping), or First Data Corp. (for credit card authorization and payment processing).
On the Web, not only can sellers offer great service, but they can give customers a personalized home to which to return. Customers can participate in virtual community-building activities, such as bulletin boards, chat rooms, and mailing lists. Over time, sellers can build ongoing personal relationships with their customers.
First, it is likely that no vendor alone will ever offer a complete e-commerce solution. At best, a single vendor will provide 80 percent of what you need. There are too many different types of businesses and too many variations on the basic stages of buying and selling for any one solution to meet more than a few of your particular requirements. There will always be plenty of business for VARs and consultants to customize these offerings to work just right for you, and there will always be a place for outside partners to provide specific pieces of your total solution -- the Internet and the Web make it easy.
Second, most vendors are still positioning themselves for e-commerce. They publish white papers and send out press releases but have precious little real product (Oracle Corp. and Microsoft, for example). Others that have had products available have undergone spin-offs, reorganizations, and changes in strategic direction (such as Actra).
And third, two words about security: Caveat emptor (let the buyer beware). No product can provide bulletproof security for your customers or your company alone. No matter which commerce products you use, you are the one ultimately responsible for the security of your site. Even though protocols such as SSL and SET may make it difficult to capture transaction data illicitly over the network, if your routers, operating systems, or firewalls are improperly configured it won't make any difference. Furthermore, if you are storing confidential data about your customers, it would be best to maintain strong security and controlled access to the data even after it is in the more trusted confines of your corporate network.
Out of the box, Microsoft offers a wide but shallow solution that crosses all four of the stages of commerce I just mentioned, plus tools and vendor partnerships to allow you to make your solution more complex. In future versions, Microsoft promises more business-to-business commerce features, including support for EDI, electronic funds transfers (EFT), integration with Enterprise Resource Planning (ERP) systems, and "starter sites" for corporate purchasing and supply-chain trading.
See backoffice.microsoft.com/products/SiteServerE/default.asp for more information.
MerchantXpert and PublishingXpert use Netscape's Web server and Oracle's database server. Both products are intended to provide relatively complete solutions for their target markets, although both rest most comfortably in the stages of making the sale and getting the goods. They are intended to stand alone, independent from any other Web servers you may have. MerchantXpert is designed for hosting a retail storefront on the Web, including order processing, shipping and sales tax calculations, customer order status checking, customer registrations, refunds, and credits. PublishingXpert is a tool for Web content publishers that charge for access to their content. It supports customer registration and personalized content, subscriptions, pay-per-view, and prepaid billing models, as well as content-management functions such as staging and replication. Overall, Actra's existing products are deeper, more specific solutions. If you fit their target markets, these products may be an all-in-one solution, but if you don't, your work to integrate them may be more difficult than with a broader solution.
The products that Actra has announced thus far concentrate mostly on business-to-business commerce. ECXpert supports cross-business transactions, OrderXpert Seller supports business-to-business sales, and OrderXpert Buyer supports internal purchasing. Building on GEIS's strengths, Actra will support EDI standards and include so-called "legacy application integration modules" to help customers connect their existing systems to the Internet; and from Netscape's initiatives, all of Actra's products will support CORBA and IIOP as their distributed-object interfaces.
For more information, see www.actracorp.com.
Open Market's biggest and most valuable innovation has been its architecture, which allows a Web site to separate access control and commerce functionality completely from other content and services. This architecture not only allows for the increased security and support needed for the commercial aspects of a Web site, but it also allows Web sites to outsource this functionality and ISPs to provide it as a service to Web site developers. Best of all, Open Market products use encrypted URL data to exchange information, so they'll work with any browser and don't rely on browser cookies.
Open Market's commerce products build upon the Open Market Secure WebServer. If you want to run your own secure services, you can purchase OM-Transact for transactions. If you want to serve your content out of a database -- so that product can update pricing with their existing applications, for example -- you can use ActiveCommerce DB (based on BlueStone Consulting Inc.'s Sapphire/Web product with an Oracle or Sybase Inc. database). Or, if all you need is to connect to a service that provides Open Market's secure services, you can use OM-Secure Link Executive. All these products work together, and a software development kit (SDK) is available for those who wish to customize Open Market tools or interact with them at a lower level. Open Market also had an access control product, OM-Axcess, which the company has since signed over to firewall vendor Raptor Systems.
Open Market aims its products somewhere between Microsoft and Actra. On the one hand, Open Market's products are general-purpose, like Microsoft's, but they offer more of a turnkey solution if you want it. On the other hand, they have some of the depth of Actra's solutions without limiting your database structures or site organization.
For more information, see www.openmarket.com.
Out of the box, BroadVision's One-to-One supplies default templates for basic commerce functions, such as order entry and payment processing. Developers can add new templates or modify the defaults. The product also includes a library of components to support shopping carts, order processing, tax and shipping calculations, user profiles, ad insertion, and discussion groups on the site. Dynamically generated pages can use HTML, Java, and JavaScript to present content that is subject to business rules and individual user preferences. Finally, more than any of the other tools I have mentioned, BroadVision provides simple, graphical applications that nontechnical users can use to define and modify business rules and content for the site.
See www.broadvision.com for more information.
| Table 1. Four stages of commerce and some of the tools and technologies used in each stage. No single vendor can supply everything needed for full-featured electronic commerce. | |||
|---|---|---|---|
| Before the Sale | Making the Sale | Getting the Goods | After the Sale |
| Static Web site | Encryption | Subscription systems | Chat rooms |
| Email mailing lists | SSL, SET standards | Access-control systems | Bulletin-board systems |
| Advertising | Payment systems | Shipping systems | Email mailing lists |
| Usage tracking and analysis tools | Shopping carts | Integrated back-office systems | Customer-support systems |
| Search engines | Sales tax calculations | Refund/credit mechanisms | |
| Priming remote search engines | Shipping calculations | Integrated financial systems | |
| Electronic catalogs | Currency conversions | Usage tracking and analysis tools | |
| Intelligent agents | Cross-selling tools (discounts, special offers, bundles) | Integrated phone-center systems | |
| Applets for product research and comparison | EDI translators | User profiling (Open Profiling Standard) | |
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