eBusiness: the final frontier

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eBusiness the final frontier

• Professor Ken Birman
• Dept. of Computer Science
• Cornell University

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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 wont be missed
• And computers are very fast offering big gains in
  efficiency, flexibility
• Productivity (per employee) is rising

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Understanding It

• But understanding these trends isnt 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?

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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

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Questions

• How well does the Internet work and what can we
  do when it doesnt work?
• How rapidly is it growing and where is the growth
  occurring?
• What sorts of business activities exist on and
  around the Internet?

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A network is like a mostly reliable post office
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Inside the Network
A router
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Connect to rns.com
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Inside the Network
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Connect to rns.com
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Inside the Network
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Connect to reuters.uk
Connect to rns.com
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Inside the Network
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Connect to reuters.uk
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Inside the Network
Connect to reuters.uk
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Success!
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Inside the Network
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Success!
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Caveats

• Names like rnets.com are turned into numbers
  like 128.38.47.62
• This is because computers work best with
  fixed-length 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

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Looks Like a Phone System

• but it isnt!
• 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 arent guaranteed to get there!
• Postman gets irritable and tosses out some mail

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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
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Internet Stuff That doesnt 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 isnt reliable you often get drop-outs
• And since latency varies a lot you may get
  unexpected pauses

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Why isnt 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 well see, this is very common
• Your computer automatically resends lost packets
  to hide such events from you

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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.

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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.

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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)

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What about the Web?

• Browser is independent web servers dont keep
  track of who is using them. Each request is
  self-contained and treated independently of all
  others.
• Cookies dont count they sit on your machine
• And the database of account info doesnt 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

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You and the Web
Cookie identifies this user, encodes past
preferences
Database
HTTP request
Web browser with stashed cookies
Web servers are kept current by the database but
usually dont talk to it when your request comes
in
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You and the Web
Web servers immediately forget the interaction
Reply updates cookie
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You and the Web
Web servers have no memory of the interaction
Purchase is a transaction on the database
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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

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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!

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Todays 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

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Tomorrows 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?

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30 of North American Adults Shop on the Web (Jan
1998)
Jan 98
Sep 95
Jan 97
Source Dennis A. Robertson, CTO, Motorola (1998)
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"Source Internet Software Consortium
(http//www.isc.org/)".
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Internet Revenues (B)
Source Dennis A. Robertson, CTO, Motorola (1998)
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Internet Backbone
BGP
BGP
BGP
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Categories of e-Business

• Backbone service provider (BSP)
• Provides highest speed data transfer
• Normally, a major long-distance phone company
  like MCI, Sprint, ATT
• Its customers are independent service providers
  like Road Runner
• They pay steep fees to have a thick pipe
  connecting their regional networkto the backbone

Source International Data Corp
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Independent Service Provider
BGP
BGP
BGP
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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 thou-sands of them

Source Inter_at_ctive Week (7-Jun-99)The industry
standard (22-Mar-99)Techmall (11-Apr-99)
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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
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Lots of Companies do Payroll
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Payrolls-R-Us Wants To Do Payroll for Everyone
ASP
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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 Conways lectures

35B in 2003(Qwest Communications, 6-Aug-99)
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My Web Site Talks To Yours
B2B Interactions
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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)
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Send your Web Pages to Akamai, and They Handle
Web Requests For You
AKAMAI
Web Hosting
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Categories ofe-Business

• Switch and router vendor (CISCO, Nortel, Lucent)
• They sell the boxes that run the network
• But they dont run the network

Source Web Week (Nov. 1996) Network world (Sept.
1999)
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Categories ofe-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

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Categories ofe-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

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Categories ofe-Business

• Switch and router vendor
• Computer vendor
• Platform vendor
• Middleware vendor
• Extends the platform with features the primary
  company didnt 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 2002Total middleware market
2.3B in 1997, 4.9B in 2002(Gartner Group,
12-Jul-99)
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Categories ofe-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

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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 wont hear much on it from me!

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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

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Reality Check

• If we could shrink the Earths 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 worlds 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