Ecommerce Concepts   «Prev  Next»
Lesson 1

Basic Ecommerce Theory

Introduction to Basic ecommerce Concepts

Our brief history of e-Commerce begins around 1965 with the mainframe computer.

Four Types of Computational Devices

  1. Mainframes:Mainframes are large and powerful computers linking large sets of computers and peripheral devices. In the mid 1960's these devices were as large as hourses. Today the size has shrunk so that a mainframe is many times more powerful than what was used in the 1960s and can fit into a refrigerator
  2. Midrange computers:A medium-sized computer system or server. Midrange computers encompass a very broad range and reside in capacity between high-end PC servers and mainframes. For example, IBM's Power Systems are its midrange line for both business and scientific applications
  3. Personal Computers:A personal computer (PC) is a multi-purpose electronic computer whose size, capabilities, and price make it feasible for individual use. PCs are intended to be operated directly by an end user, rather than by a computer expert or technician. Computer time-sharing models that were typically used with larger, more expensive minicomputer and mainframe systems are not used with PCs.
  4. LANS/WANs:A local area network (LAN) is a computer network that interconnects computers within a limited area such as a residence, school, laboratory, university campus or office building. By contrast, a wide area network (WAN) not only covers a larger geographic distance, but also generally involves leased telecommunication circuits. An even greater contrast is the Internet, which is a system of globally connected business and personal computers.
Fast forward to the year 2015
By 1995, information technology looked like a vast ocean of unconnected applications.
  1. Some applications used mainframe/dumb-client architectures
  2. Some applications operated exclusively on PCs
  3. Some applications used client/server designs
Despite three decades of increasing sophistication in computing architectures, most communities of users might as well have been on different planets. During this time, computer systems typically operated only within their owners's secure boundaries.

The popularity of the Internet grows

Early attempts at on-line applications usually took the form of bulletin board services (BBS).
The Internet was one of many services that fell under the BBS umbrella.
Originally, the Internet served governmental and educational communities of interest. However, the audience quickly changed in 1995 as businesses and the general public became aware of the capabilities of the Internet and the World Wide Web.
Web browsers enter the picture
The creation of the commercial Web browser, developed and popularized by Netscape, and the re-purposing of on-line services into Internet on-ramp service providers (also known as ISPs, like AOL) made it possible for any PC with a modem to get onto the Web.
At first, the Internet and the Web were viewed as fun and/or useful services for academia, government, and consumers. Little by little, however, corporations began to realize that the architecture of the Internet and the Web could be used to deploy certain types of applications that were difficult or impossible to deploy on existing architectures (like client/server).
Organizations and their technology architects began to grasp that a combination of universal networking through TCP/IP and the graphical user interface (GUI) of the Web offered a compelling architectural platform for a new class of applications.
What type of applications?
Organizations found that the architecture of the Internet was a useful tool for creating and using internal applications. One of the more popular organizational applications was a new kind of intra-organization bulletin board system known as an Intranet.

  1. Bulletin board services: An electronic message database where people can log in, read, and leave messages.
  2. Intranet: A private Internet reserved for use by people who have been given the authority or passwords. These people are typically employees and often customers of a company.
  3. Internet: A global network connecting millions of computers that are joined through a high-speed backbone of data links.
  4. World Wide Web: A system of Internet servers supporting specially formatted documents that support links to other documents, graphics, audio, and video files. The documents are formatted in special language (HTML, DHTML, XML, etc.).
  5. Transmission Control Protocol/Internet Protocol (TCP/IP): A suite of communications protocols used to connect computer systems and transfer data over the Internet.

ecommerce infancy
In addition, organizations realized that they could create Web-based applications that reached beyond the boundaries of their organization. Organizations began to use the Web to communicate and conduct transactions electronically with:
  1. Consumer customers (Business to Consumer (B2C): Commerce is conducted between a consumer, such as a home user on a PC, and a business. business to consumer or B2C)
  2. Business customers and suppliers( Business to business (B2B): An online relationship where one business sells goods or services to another business. For example, the United States Postal Service sells its delivery services to Thus, the back end ordering system of is connected to the United States Postal Service.

The focus of this course

The tools and technologies of today's e-Commerce world are the subjects of this course.