Ecommerce final

E-Commerce
Mrs. Geetanjali A. Bhosale. Dept. og Comp.
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Commerce:
The exchange of goods or services for money.
E-Commerce:
eCommerce, consists of the buying and selling of products or
services over electronic systems such as the Internet and other computer
network.
Examples :
 Examples ATM (only one watchman can handle the business).
 Selling physical goods using websites e.g. flowers, cards,
magazines, shoes, electronic items.
 Reserving a hotel room over the Internet.
 A manufacturing plant orders electronic components from another
plant within the company using the company's intranet.
Introduction Of Electronic Commerce
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Objectives Of E-Commerce
 Information Sharing
 Online communities
 Chat rooms
 Multi-party conferences
 Bulletin board systems
 Newsgroups
 Ordering
 Payment
 Fulfillment, service and Support
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History of E-commerce and Indian Business Context
 Business Processes
buying, selling goods, services and information.
 Use of technology for business processes
• Electronic Data Interchange (EDI)
• Electronic mail (Email)
• World Wide Web (WWW)
• Internet applications
 Ecommerce
Provides way to exchange information between
individuals, companies and countries using computers.
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World Wide Web (WWW)
1969- The US Department of Defense started the first network among major
research centers in US.
1971- A total of 15 major connections or nodes were established. E-mail
was introduced.
1973- Defense Department started developing various forms of file transfer.
1984- Domain Name Service (DNS), was introduced.
1986- US National Science Foundation created Internet-based telephone
lines.
1987- The number of hosts reached 10,000.
1988- The number of hosts became 60,000.
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World Wide Web (WWW)
1989- over 100,000 hosts on the internet were registered.
1991-WWW was created by CERN
1992- 1 million hosts
1993- The InterNic was created to handle domain name registration.
1995- 6.6 million hosts
July 1996- An estimated 12.8 million hosts, 212,155 websites and about 25
million users of the web. 90% in United states.
July 1997- 1.3 million domain names registered.
Dec 1997- 22 million servers, 40 million users on WWW
2000- 110 million users and 72 million Domain Names
2003- 802.2 million users and 233 million hosts.Mrs. Geetanjali A. Bhosale. Dept. og Comp.
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Advantages of E-commerce
1. 24X7 operation.
2. Global reach
3. Cost of acquiring, serving and retaining customers
4. An extended enterprise is easy to build
5. Disintermediation
6. Improved customer service to your clients
7. Power to provide the ‘best of both the worlds’
8. A technology-based customer interface.
9. The customer controls the interaction.
10.Knowledge of customer behaviour.
11.Network economics.
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Disadvantages of E-commerce
1. Some business products are difficult to inspect from remote
location.
2. Can not calculate return-on-investments.
3. Technology and software issues.
4. Cultural and legal obstacles.
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E-commerce in India
Growth of Internet in India (in thousands)
Year Internet subscribers Internet users
1997 25 45
1998 150 200
1999 359 1000
2000 650 2000
2001 1130 6668
2002 1763 10684
2003 3661 29000
2004 4403 31723
2005 6674 52875
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E-commerce in India
Total E-commerce transactions in India: NASSCOM survey
(in Rs crore)
Year Total e-commerce transactions
1998-1999 131
1999-2000 450
2000-2002 1400
2006 2300
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E-commerce opportunities for Industries
1. Financial services
2. Stock trading
3. Banking
4. Legal and professional services
5. Tour and travel
6. Healthcare
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Various Indian case studies
1. TELCO- Managing Supply Chain on the Internet:
1. Tata Engineering and Locomotive Company.
2. India’s largest commercial vehicle manufacturer.
3. 130-strong dealer network online.
4. Covers major manufacturing locations in Pune, Jamshedpur
and Lucknow and its headquarters in Mumbai.
5. In better position to customize products according to specific
dealer requirements at a short notice.
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2. Hidustan Lever-Getting the e-advantage
1. Huge Range of products.
2. Network connecting all its suppliers.
3. In first phase, launched a pilot project to wire up its 7500
distributers.
4. In second phase, it will attempt the huge task of connecting its
top retailers.
5. Internet is used for transactions.
6. Formidable distribution system, which covers nearly two
million retail outlets.
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3. Asian Paints- E-transforming the organization
1. India’s largest paint company.
2. Use of internets for efficient data collection, demand
forecasting, reduction in working capital and online information
about material flows across factories and other locations.
3. Connecting 15000 dealers and 55 branch offices.
4. Improved the efficiency of supply chain.
5. Improves e-relationship with customers.
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4. ICICI bank- Comprehensive Transactions
1. Provide online banking
2. Customers/account holders can do all their money
transactions.
3. Bank launched an electronic bill payment service through its
internet banking service.
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E-transition Challenges for Indian Corporates
Internal Resisting Issues
1. Bureaucratic wrangles.
2. Cultural changes.
3. Not many are prepared.
4. Lack of skill and training.
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External Driving Factors
1. Sheer necessity.
2. Big business, the driving factor.
3. Global market.
4. Value for money.
5. No-entry barriers.
6. Other factors.
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Doubts and Difficulties
1. Household are shaky about buying over the Internet.
2. Computers are not bought for browsing the internet.
3. Lack of proper commercial and legal system.
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Business Models for E-commerce
Definition:
A business model is the method of doing business by which a
company can sustain itself and generate revenue.
or
An architecture for product, service, and information flow, including a
description of business players, their roles and revenue sources.
Simple Model :
Example: Production of goods, selling and generating revenues.
Complex Model :
Example: Radio and television broadcasting involves network of
distributors, content creators, advertisers, listeners and viewers.
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Functions of Electronic Market :
i) Matching buyers and sellers
ii) Facilitating commercial transactions
iii) Providing legal infrastructure
iv) Increase market efficiency and reduce transaction costs.
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1. E-business model based on the relationship of
transaction parties.
2. E-business model based on the relationship of
transaction types.
3. Classification by revenue model.
4. Classification by distribution channel.
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E-commerce models can be perceived in the form of relationship between
two entities:
 Direct marketing versus indirect marketing
 Fully cybermarketing versus partial cybermarketing.
 Electronic distributors versus shopping mall
 Generalized e-malls versus specialized e-malls
 Proactive versus strategic cybermarketing
 Global versus regional marketing
 Sales versus customer service.
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E-business model based on the relationship of transaction parties.
1) Business-to-Consumer (B2C)
2) Business-to-Business (B2B)
3) Business-to-Government (B2G)
4) Consumer-to-Consumer (C2C)
5) Consumer-to-Business (C2B)
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Relation Between B2B and B2C models
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1) Business-to-Consumer (B2C) :
Steps in B2C transactions
1. Account acquisition
2. Product discovery through search and browse
3. Price negotiation
4. Payment
5. Product delivery
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Reasons to opt for B2C model
1. Inexpensive costs, big opportunities
2. Globalization
3. Reduced operational costs
4. Customer convenience
5. Knowledge management
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Processes in B2CMrs. Geetanjali A. Bhosale. Dept. og Comp.
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Processes in B2C
1. Visiting the virtual mall
2. Customer registers
3. Customer buys products
4. Merchant processes the order
5. Credit card is processed
6. Operations management
7. Shipment and delivery
8. Customer receives
9. After-sales service
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Business-to-Business (B2B)
Advantages of B2B
• Direct interaction with customers.
• Focused sales promotion.
• Building customer loyalty
• Scalability
• Savings in distribution costs
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Tools and Techniques at the Disposal of B2B Enterprises
• Use of pricing as a tool
• Use of application service provider model
• Use of generic models which are known for efficiency as well
as personalized attention to various business customers.
• Use of comparison shopping.
Mrs. Geetanjali A. Bhosale. Dept. og Comp. Studies
CSIBER

Steps in B2B Transactions
• Review catalogues.
• Identify specifications.
• Define requirements.
• Post request for proposals (REP).
• Review vendor reputation.
• Select vendor.
• Fill out purchase orders (PO).
• Send PO to vendor.
• Prepare invoice.
• Make payment.
• Arrange shipment
• Organize product inspection and reception.
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Consumer-to-Consumer (C2C)
 Consumers sell directly to other consumer
 Medium for selling – 1. online classified ads,
2. auctions,
An auction is a process of buying and
selling goods or services by offering them
up for bid (making price offer), taking bids,
and then selling the item to the highest
bidder.
3. Selling personal services and expertise online.
e.g. eBay. COM (auction),
TraderOnline.com
 Generate revenue from expert information exchanges.
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Consumer-to-Business (C2B)
 Reverse auction or demand collection model.
 Enables buyers to name their own price.
 Website collects the demand bids.
 Offer bids to participating sellers
 Examples:
 ReverseAuction.com (travel, autos, consumer
electronics)
 Priceline.com (travel, telephone, mortgages )
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E-business Models Based on the Relationship
of Transaction Types
 On the basis of value addition :
Addition of value to a product or service because of
opportunities offered on web
 On the basis of control :
Control is done through the policies of the website.
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E-business Models Based on the Relationship
of Transaction Types
Types of transactions
1. Brokerage
2. Aggregator
3. Info-mediary
4. Community
5. Value chain
6. Subscription
7. Manufacturer
8. Advertising
9. Affiliate
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Brokerage Model
Characteristics
1. The price-discovery mechanism is its key-principle.
2. It is a meeting point for sellers and buyers.
3. Auctions and exchanges are the modes of transactions.
4. It is a ‘free Market’.
5. It consist of Global Network of Buyers and Sellers.
6. It is a Virtual Market space enabled by the Internet.
7. It encompasses all types of organizations.
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Brokerage – Price Discovery Mechanisms
1. Auction:
A seller puts up an item and buyers place bids until the
close of the auction, at which time the item goes to the highest bidder.
2. Reverse Auction :
A type of auction in which sellers bid for the prices at
which they are willing to sell their goods and services.
3. Market Exchange
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Examples of price discovery mechanism based models:
1. B2B
B2B sell side FastParts.com
B2B buy side FreeMarket.com
B2B Exchanges Covisint.com
2. B2C Priceline.com
3. C2C ebay.com
Indian brokerage sites:
www.baazee.com
www.automartindia.com
www.indiacar.com
www.steelexchangeindia.com
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Auction broker
1. English auction:
 Open-outcry auction or ascending-price auction.
 Used for selling art, wine and other physical goods which do not have
limited lifetime.
 Auctioneer starts off auction with the lowest acceptable price or reserve
price.
 Receives bids until no raise in the bid.
 Knocks down
 Manipulation of bidders is possible.
 Auction site may provide alerts if their bids are too low.
 Possibility of pay more if bidder gets excited
 Possibility of pay less if reserve price is not declared.
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2. Dutch auction:
 Descending-price auction.
 Used for goods which have limited lifetime.
 Auction time period is very short.
 Practiced in departmental stores during sales season to dispose off
excess inventory accumulation.
 Forces bidder to make bidding decisions earlier.
 Opening price is set extremely high.
 Price then descends with a predefined amount at predefined time
intervals.
 When many items of the same product are auctioned, many bidders
claims the product until no product left.
 Different prices for different bidders.
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3. First-price sealed-bid auction:
 Individual bids are hidden from other bidders.
 Bidding phase –
 all bides are collected.
 Each bidder submits bid based on his own valuation
 Resolution phase –
 bids are opened and the winner is determined.
 Bids are opened and sorted from highest to lowest bid
 For one item highest will be winning bid.
 For multiple items of same product – items are awarded to
the highest bids until no items left (Discriminatory Sealed
Bid).
 In Discriminatory Sealed Bid all bidders do not pay the
same price.
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4. Vickrey auction:
 William Vickrey, the winner of the 1996 Nobel Prize in Economics,
developed the Vickrey auction.
 Uniformed second-price auction.
 Bids are sealed.
 The winning bidder will pay the price of the second highest bid.
 Winner – Highest unsuccessful bid.
 For multiple units of the same item – all winning bidders will pay the
same price.
 Vickrey and first-price sealed-bid auction will both yield the same
expected price..
 Bidder will adjust his bids as he increases the price upwards.
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Economic Rationality Behind Auction
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Impact of Web on Electronic Auctions
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Impact of Web on Electronic Auctions
Benefits of using web enabled auctions
1. Common infrastructure with millions of potential users.
2. Standardized hypertext protocol for displaying the trade objects
to increase economic feasibility of electronic auctions.
3. Standardized search function.
4. Standards for secure payments.
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Critical Factors characterizing Electronic Auctions
1. Perishability: occurs if the value of the product to be sold at a
given time is zero.
2. Scarcity : occurs when there is an excess demand than supply.
3. Goods that may be moved electronically
4. Goods that are geographically constrained.
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Electronic Auctions seller-buyer perspective
1. Consumer-to-Consumer(C2C)
i. Modern version of classified advertisement.
ii. Require two persons to be located near to each other to
reduce transportation cost.
2. Business-to-Consumer(B2C)
i. Companies trying to sell off excess stock or fixing prices
for new products.
3. Business-to-Business(B2B)
i. Mainly used by companies and government to sell public
contracts and surplus property.
ii. B2B auctions held privately.
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eBay model
1. World’s largest personal online trading community.
2. Individuals can buy and sell items in more than 4320 categories
like automobiles, collectibles, antiques, sports memorabilia,
computers, toys, coins, stamps, books, magazines, music,
pottery, glass, photography, electronics, jewelry, gemstones etc.
3. Person-to-person trading site.
4. eBay provides 4 million new auctions and 4,50,000 new items
every day.
5. Bulletin boards- encourages open communication between
users.
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Aggregator Model
Different aggregator models
1. Virtual Merchant :
i. Operates only from web.
ii. Offers traditional or web specific goods and services.
iii. Selling method- list price, auctions.
iv. Example: Facetime - application service provider.
Provides customer support for Amazon, eToys, Eyewire
and Onsale.
2. Catalogue Merchant :
Migration of mail order to web based order
Example: Levenger
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Aggregator Model
3. Surf and turf :
Establishment of traditional business to web storefront.
4. Bit Vendor :
i. Merchant deals in digital products and services.
ii. Conduct sales and distribution over the web.
5. Subscription model :
i. User pay for access to site.
ii. High value added content is essential.
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Aggregator Model
Aggregators
1. Bypass distributors.
2. Connectors between buyers and sellers.
3. Involved in selection, organization, matching buyers
requirements with available goods, fulfillment of the orders
etc.
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Aggregator Model
Types of Aggregators
1. Content aggregators:
i. Represent large publishing companies
Example : Pathfinder.com
ii. Contents are attractive to make site viable.
2. Mainstream aggregators:
i. Sites providing web directory and search engine.
ii. Provide attractive tools like e-mail, home pages,
reminders.
iii. Easy- to-remember URL
iv. Top traffic sites on web.
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Aggregator Model
Types of Aggregators
3. Event aggregators:
Sites providing in-depth content and tools tailored to
needs of particular group.
Example: Microsoft’s HomeAdvisor or HomeShark.
4. Shopping aggregators:
i. Let consumers roam through sites and catalogues
to find best price in seconds.
ii. Help consumers to choose through dozens of e-
commerce site.
Example: compare.com, bizrate.com.
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Aggregator Model: case study of
Automartindia.com
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Info-mediary Model
 Info-mediary : An organizer of virtual community.
 Helps sellers to collect, manage and maximize the value of
information about consumers.
 Information is analyzed and used to target marketing
campaigns.
 Firms function as info-mediaries : collecting and selling
information to other businesses.
 Offer users free internet access/hardware in exchange for
detailed information about their surfing and purchasing
habits. E.g. NetZero, eMachines.com
 Do not own products and services.
 Protect consumers from unsolicited mailings and confusing
product selection.Mrs. Geetanjali A. Bhosale. Dept. og Comp.
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Info-mediary Model
 Info-mediary Revenue :
 Membership fees.
 Advertising revenue.
 Number of user page views and transactional revenue.
 subscription fees.
Value Addition :
 Overcome limitation of physical space.
Provide suitable suggestions to buyers.
Helps buyers expand, organize and optimize search
space.
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Info-mediary Model
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Info-mediary Model
Classification
1. Specialized agents:
 Closed relationship with buyers and sellers
 Require cost in the form of fees to satisfy
membership profile.
 Manage a specialized market.
 Business performance depends on their ability to
deliver value through scope, specialization and
infrastructure.
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Info-mediary Model
2. Generic agents:
 Open relationships with buyers and suppliers.
 No relationship specific investments.
 Great value through comprehensive and unbiased
service
 Generate revenues from advertising.
Example.
Google.com, Hotbot.com, yahoo.com
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Info-mediary Model
3. Supplier agents:
 Sponsored by specific companies to sell their products.
 Provide access to only its own products.
 Sustainability depends on the quality of suppliers,
provision of benefits to buyers and ability to maintain a
good infrastructure and seamless exchanges platform.
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Info-mediary Model
4. Buyer agents:
 Relationship with core set buyers and any number of
suppliers.
 To succeed- build a large base of clients, winning their
trust
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Community Model
Definitions:
a) a unified body of individuals
b) the people with common interests living in a particular area,
broadly the area itself.
c) an interacting population of various kinds of individuals in a
common location.
E-communities:
Electronic communities are formed when groups of people meet
online to fulfill certain needs, which include personal interests,
relationships, entertainment and transactions.
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Community Model
Functions of Communities on the Web
1.Satisfies the need to be accepted and concerned about.
Satisfies a desire to learn.
Act as place to make personal or business contacts.
2.Deep reservoirs of technical information.
3.Beget loyalty : develop the habit of visiting one particular site
again and again. Develop sense of ownership.
4.Build business.
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Community Model
Structures of Communities:
1.Newsletters:
• One-way communication
• Use listserver software (listserv) which sends same
message to an entire list of people.
• Handles subscribers.
• listserve act as a backbone for e-mail discussion
lists.
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Community Model
2. Discussion Lists: listserv allows a member to send e-mail
to the list address
Types of discussion lists:
1.E-mail discussion list
2.E-mail discussion list digest
3.Moderated discussion list digest
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Community Model
. Bulletin Boards:
• Thread keeping problem is removed.
• Allowing posts to be read, searched and researched later
by individuals who may not have been part of the original
conversations
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Community Model
. Chat Rooms:
• Source of knowledge and information
• In business- for public relations, schedule chats and
interviews with famous personalities to gear up business.
• Example :
• eGroups- java based chat room
• Registration required for security.
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Community Model
Necessary elements for the community model
1. Clear focus
2. Technical capability
3. A proper structure, guidelines and parameters for discussion.
4. A moderator responsible for each group or list
5. A clear strategy on how the community will benefit your
business.
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Community Model
Bottom Line : effect of community on business
1. Customer satisfaction through customer support - enhance
sales.
2. Increased traffic leads to increased publicity.
3. Repeated use develop loyalty.
4. Moderating or sponsoring a group puts you/your business in
the role of an expert.
5. Helps in focusing groups interested in your products/services.
6. Well developed lists can earn advertising revenue.
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Value Chain Model
Goal of value chain model
 To develop full and seamless interaction among all members of
chain.
 Lower inventories
 Higher customer satisfaction
 Shorter time to the market.
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Value Chain Model
Generalized portal : AltaVista as a Value Chain Model
 Premier knowledge resource, strong search engine tool,
patented technology.
 Provide relevant information on any subject, web pages,
shopping, up-to-the-minute news, live audio and video,
community resources.
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Value Chain Model
Generalized portal : AltaVista as a Value Chain Model
 Premier knowledge resource, strong search engine tool,
patented technology.
 Provide relevant information on any subject, web pages,
shopping, up-to-the-minute news, live audio and video,
community resources.
 Provide multiple integrated platforms.
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Value Chain Model
 AltaVista Search: Available in 25 languages with 8 distinct search dimensions.
 AltaVista Shopping.com:
 First comparison shopping service
 provide objective price and product comparison feature.
 helps intelligent purchase decision making.
 AltaVista live
 Only real time, customizable content source.
 Links content channels on topic like money, news, sports, entertainment etc.
 AltaVista raging bull: Most active finance community.
 AltaVista free access: fastest growing ISP service with 2 million registered users
in US and Canada.
 AltaVista international Mrs. Geetanjali A. Bhosale. Dept. og Comp.
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Value Chain Model
Capabilities of AltaVista Search technology
1. Search catalogues, inventory databases, auctions, classifieds,
job listings, suppliers etc.
2. Improve the success rate of incoming searches.
3. Allow users to sort results by brand, price, availability etc
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Value Chain Model
Personalized portal : My Yahoo! as a Value Chain Model
 Personalized version of yahoo.
 Allows user to collect all his favourite sections of yahoo.
 Example: surfing through news, weather, stock prices, sports
scores, TV and movie listings, horoscopes etc.
 My yahoo is free, portable.
 Allow users to have two pages-
 A home page: frequently accessed information storage.
 Secondary page :store secondary information.
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Value Chain Model
Topics that Yahoo! Offers
 Pick your weather cities
 Track your stock quotes
 Read your choice of news
 Find local movie show times
 Follow your favourite sports teams
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Manufacturer Model
 Direct model
 Allow manufacturers to reach buyers directly
 Compress distribution channel
 Based on efficiency, improved customer service and
understanding customer preferences.
 Manufacturer sells product through website
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Manufacturer Model
Websites used for,
 Purchase:
The sale of a product in which the right of ownership is
transferred to the buyer.
 Lease :
In exchange for a rental fee, the buyer receives the right to use
the product under “terms of use” agreement.
On expiration of lease agreement product is returned.
Agreement may include a right-of-purchase upon expiration.
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Manufacturer Model
 License:
The sale of a product involves transfer of usage rights to
buyers.
The ownership rights remain with the manufacturer.
(e.g. software licensing)
 Brand integrated content
Created by manufacturers for the sole basis of product
placement.
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Advertising Model
 Extension of traditional media broadcast model
 Provide contents like e-mail, chat, forums together with ads
 Broadcaster gets revenue from banner Ads
 Works well when volume of viewer traffic is large.
Working
• Sites offer free access to something and show ads.
• User clicks an ads to go to advertisers page
• Advertiser pays site operator
• Advertisements shown when user wait for some time-consuming
operations.
• Operators earn more if advertisements are of related topics.
• Advertisements can be targeted to user profiles.
• create business opportunities E.g. DoubleClick- collects ads from
many sources and arranges for placements on different sites
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Advertising Model
Web pricing models:
• CPM or impression only
• Click-through
• Sponsorships
• Cost-per-lead
• Cost-per-sale
• Straight revenue sharing deals
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Advertising Model
Types of Advertising on the Internet
1.Portals :e.g. yahoo
2.Classifieds :e.g. monster.com
3.User-based registration :e.g. NYTimes Digital
4.Query-based paid placement :e.g. Google
5.Contextual Advertising :e.g. eZula
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Advertising Model
Different Web Advertising Formats:
1.Banners.
2.Vertical columns
3.Pop-up windows
4.Interstitials
5.Advertorials
6.Intromercials
7.Ultramercials
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Advertising Model
Formats of more effective online ads:
1.Richer ad content through sight, sound, and motion
2.More information (larger files)
3.More interactivity
4.Larger screen size
5.More prominent screen positions
6.Less content competition
7.Reliable measurement and reporting to enable each advertiser to
determine its ad ROI-impressions, interactivity, brand sell.
8.Accurate audience measurement
9.Meaningful user targeting
10.Cost-effective advertising model with rates reflecting advertiser value.
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Subscription Model
• Users are charged a periodic fee to subscribe to a service.
• Frequently combined with advertising model
• Organizations makes money or revenue from subscriptions.
Services provided by subscription models :
1. Content services : e.g. Netflix.com
2. Person-to-person Networking service : e.g. Classmates.com
3. Trust Services : e.g. Truste.com
4. Internet Service Providers : e.g. America Online.
Popular topics of subscription model :
• Existing newsletters topics
• Trade associations.
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Affiliate Model
• online merchant agrees to pay an affiliate in exchange for providing an
advertisement and link to the merchant's site.
• Each sale generated as a result of a customer "clicking through" from an
affiliate to the merchant results in a small commission for the affiliate.
Variations
Banner exchange.
Pay-per-click.
Revenue sharing.
Example
Cdnow.com
Amazon.com
Studies CSIBER

Technologies of World Wide Web
 Abbreviated as www, w3 or web
 Access several internet protocols by providing single
interface.
 WWW has its own protocol-HTTP
 Operations on web relies on HyperText.
Studies CSIBER

Internet Client-Server Applications
Studies CSIBER

TELNET
 TELNET is a protocol that provides “a general, bi-directional, eight-bit byte
oriented communications facility”.
 telnet is a program that supports the TELNET protocol over TCP.
 Many application protocols are built upon the TELNET protocol.
 telnet program allow to use online databases, library catalogs, chat services etc.
 IP address is required to telnet a computer
 A telnet program must be installed on your local computer and configured to
web browser in order to work.
Studies CSIBER

Local login
Studies CSIBER

Remote login using TELNET
Studies CSIBER

FTP - File Transfer Protocol
 Used for transfer of files.
 FTP contains books, articles, software, games, images, sound, multimedia,
course work, data sets etc.
 Can be performed without special software.
 Possible to retrieve files by using search engines
Example: FTPSEARCH located at http: //ftpsearch.lycos.com
Studies CSIBER

File Transfer Protocol
Studies CSIBER

Chat on the Web
 E-commerce website include Chat rooms
 Engage customers in a dialogue.
 Virtual communities
 Instant messengers – variation of chat
Example: America Online
Studies CSIBER

IRC – Internet Relay Chat
 Real time communication through hundreds of channels based on
particular topics.
 IRC software program- connects user to IRC server
 Major IRC networks : EFnet, Undernet, IRCnet, DALnet, NewNet
 IRC clients : UNIX/shell - ircII
Windows - mIRC or PIRCH
Macintosh – Ircle
 Conversations may be
public- everyone in a channel can see what you type.
Private- messages between only two people.
Studies CSIBER

ICQ – I Seek You
 Way of getting in touch with people
 Program for finding friends, colleagues and people with similar interests and
beliefs across the globe.
 ICQ lets user chat, send e-mails, SMS and wireless-pager messages, file transfer,
URL
 ICQ phone-contains IP telephony functions for PC-to-PC and PC-to-phone calls.
 Provide universal platform for launching peer-to-peer applications
 ICQ hosts range of community features- message boards, chat rooms, interest
groups, ICQ match, user lists, game partners, white pages
 Alerts when your friends sing in or off
Studies CSIBER

Identifying Data Types with Multipurpose Internet Mail Extensions (MIME)
 Standard for transferring full motion video sequences, stereo sound
tracks, high resolution images using HTTP on WEB.
 HTTP uses MIME to identify the type of object being transferred across
internet.
 MIME typing originally developed to allow e-mail messages to have
multiple parts with different types of data.
 MIME can be effectively used with protocols other than HTTP on WEB.
Studies CSIBER

Relationship between networks and internets
Networks and Internet
Studies CSIBER

Communication Switching:
Allow computers to transfer data using shared lines of communication.
Similar to telephone switching networks.
Types of switching –
1. Circuit switching
• Creates a single, unbroken path between devices.
• Line remains idle for most of time.
• Requires constant data rate.
• Internet do not use circuit switching
Studies CSIBER

2. Packet switching
• Data transmitted in packets.
• Source breaks long message into small chunks of data known as
packets.
• Typical upper limit of packets length is 1 kilobyte.
• packet contains control information.
• Data can flow along multiple paths.
• Internet is packet-switched network.
• Repeaters- network devices used to amplify network data.
Studies CSIBER

Packet switching
Studies CSIBER

Development in Transmission
Bandwidth- information carrying capacity.
Dedicated leased lines
• used in Universities and corporations.
• transmission rate- 1,544,000 or 45,000,000 bits per seconds(bps).
• supports thousands of simultaneous users.
Narrowband
• Home users dial into internet through telephone.
• use modems connected to a “twisted pair of copper wires.
• transmission rate- 14,000 to 56,600 bps
Studies CSIBER

Midband rates
• Transmission speed- 128,000 bps or more
• Asymmetric Digital Subscriber Line(ADSL) and Integrated Services
Digital Network (ISDN)-use wires to connect to internet through
telephone system.
Cable Television system
• use coaxial cables
• Transmission speed- 27,000,000 bps alongside the regular cable
programming.
Broadband
• uses Asynchronous Transfer Mode(ATM) to transmit data.
• Transmission speed- 622,000,000 bps and more
• Uses technique called Quality of Service (QoS)
Studies CSIBER

Network Routers
• Transfer data between networks having different technologies.
• Integral part of Internet
• Routers has an address on the network.
• To manage network traffic-large segment of LAN is divided into smaller
segments (Subnets).
• Routing tables-lookup database to route data through correct path.
Static Routing table-
• Network administrator manually update table
Dynamic Routing table-
• Network software automatically update table.
• Dynamically choose correct path in case of traffic.
Studies CSIBER

Connect less versus connection oriented protocols
Connectionless Protocol
• Client connect to the server, make request, get response and then
disconnected
• Example : HTTP protocol
• No system resource is used after transaction completion.
• HTTP servers have only limited active connections.
• Can do thousands of transactions with low system overhead.
Drawbacks
• When same client requests additional data, reestablishment require.
• Waste of time and energy.
Studies CSIBER

Connection oriented protocols
• Client connect to the server, make a request, get a response and then
maintain the connection to service future requests.
• Example: FTP protocol
• After connection with FTP server connection remains open even after
file download.
• Resources require for maintenance of connections.
• Server with too much connections gets bogged down.
• Configured to allow 250 open connections at a time.
Disadvantage
• Processes running out of control, using system resources in turn
crashing the server.
• Processes eat up system resources.
Studies CSIBER

Signal Bandwidth
Range of frequencies, from the lowest to the highest, that a channel can
carry.
Analog Circuit
• Difference between the lowest and the highest frequencies that can
pass through the channel.
• measured in kilohertz or megahertz.
Digital Circuit
• The amount of information that can pass through a channel.
• Measured in bits, kilobits or megabits per second.
Studies CSIBER

The Internet protocol suite
Protocol - set of rules governing the exchange of data between two
entities.
Key elements of protocol
1. Syntax – include data format and signal levels
2. Semantics – include control information for co-ordination and error
handling
3. Timings – include speed matching and sequencing.
Studies CSIBER

TCP/IP protocol
• Protocol used for internet.
• For TCP/IP to work – network interface need IP address.
• Addresses assigned to interfaces not computers.
• One computer can have multiple IP addresses.
Design principles of internet
1. Interoperable- supports computers and s/w from different vendors
2. Layered- protocols work inlayers
3. Simple- application programmers don’t know complexity of hardware.
4. End-to-end- inter is based on this protocol. Interpretation happens at
application layer not at network layer.
Studies CSIBER

IP Address as a 32-Bit Binary Number
IP Addresses
Studies CSIBER

IP Address system
Studies CSIBER

IP Address system
•A standard IP header is around 20 byte
•Ver – version
•IHL – Internet Header Length(5 bits to 60 bits)
•TTL – Time to live (maximum 255 seconds)
•Source and destination address is 4 bytes long
IP address –
• number that uniquely represents a device in the internet.
•It is written as four decimal number e.g. 192.168.1.1
Which is same as 11000000 10101000 00000001 00000001
•Four numbers represent the network the computer is on and interface.
•IP address on internet are allocated by InterNIC (The Internet Network
Information Center)
Studies CSIBER

 IP address: 32-bit
identifier for host,
router interface
 interface: connection
between host/router
and physical link
 router’s typically have
multiple interfaces
 host may have
multiple interfaces
 IP addresses
associated with each
interface
223.1.1.1
223.1.1.2
223.1.1.3
223.1.1.4 223.1.2.9
223.1.2.2
223.1.2.1
223.1.3.2223.1.3.1
223.1.3.27
223.1.1.1 = 11011111 00000001 00000001 00000001
223 1 11
IP Address system
Studies CSIBER

IP Address system
Classes of IP-based networks
Class A
-networks with IP addresses from 1.0.0.0 to 126.0.0.0
-mega monster networks with up to 16 million plus connections.
Class B
-smaller networks with 65,000 nodes
Class c
-smallest networks with 254 nodes only.
Class D and Class E –
-primarily used for experimental purpose
Studies CSIBER

IP Address Classes
Studies CSIBER

IP Address system
Subnet mask
- Provide solution to the IP address shortage
-breaks a single class A, B or C network in to smaller pieces.
-To create a subnet address, a network administrator borrows bits from the
original host portion and designates them as the subnet field
Studies CSIBER

Subnet Addresses
Studies CSIBER

Translating IP to Domain Names
Domain Names
 A name is much easier to remember than a 12 digit number.
 Names used for TCP/IP addresses are called domain names.
 Example : siberindia.com is a domain name.
 When you address a web site, like http://www. siberindia.com, the name
is translated to a number by a Domain Name Server (DNS).
DNS-is a distributed, scalable database of IP addresses and their
associated names.
 All over the world, DNS servers are connected to the Internet. DNS
servers are responsible for translating domain names into TCP/IP
addresses.
 When a new domain name is registered together with a TCP/IP address,
DNS servers all over the world are updated with this information.
Studies CSIBER

Uniform/ Universal Resource Locator (URLs)
Provide uniform way of identifying resources that are available using
Internet Protocol (IP).
URL schemes and formats
http://www.google.co.uk:80/search?hl=en&q=Football
Host PathPort Search Part
Indicate that protocol uses format defined by
Common Internet Scheme Syntax (CISS)
Studies CSIBER

Uniform/ Universal Resource Locator (URLs)
Defining port information in URLs
Server has certain ports allocated for certain things
e.g. port 80 is for incoming request for Hypertext document.
Studies CSIBER

Characters in URLs with specific meaning
1. Colon (:) – separator
2. Double slash (//) – indicates protocol uses format defined by CISS.
3. Single slash (/) – separates path name from host and port.
4. Tilde (~) – indicates that resource is in specified users public html
directory.
5. Percentage (%) – identifies an escape code.
6. At symbol (@) – used in mail accounts
7. Question mark (?) – used to specify beginning of query string.
8. plus sign (+) – used in query string as placeholder between words.
9. Equal sign (=) – used in query string to separate key assigned by the
publisher and value entered by the user.
10. Ampersand (&) – used in query string to separate sets of keys and
values
Studies CSIBER

Static IP Addressing
• A static IP is one that will never change.
• manually input by network administrator
• manageable for small networks
• Requires careful checks to avoid duplication
Dynamic IP Addressing
• A dynamic IP is one that changes frequently.
• assigned by server when host boots
• derived automatically from a range of addresses
• duration of ‘lease’ negotiated, then address released back to server
• examples – Dynamic Host Configuration Protocol (DHCP)
Dynamic IP Addressing Vs Static IP Addressing
Studies CSIBER

 Definition : A software program that act for user or other program.
 Perform information gathering tasks
• locating and accessing information from various sources,
• filtering unwanted information,
• providing decision support.
Information overload
• Web provides end-users pick-and-click applications.
• End-users spend most time navigating and sorting through the data.
• Spend less time in interpreting and actually doing something about
what they find.
• End result – data remains unused.
Software Agents
Studies CSIBER

Value of software Agents in Networked World :
Agent : One that acts or exerts power.
It can be autonomous, intelligent, collaborative, adaptive, computational
Entity.
Intelligent Agent :
• Software program that uses agent communication protocol to exchange
information for automatic problem solving.
• Has capability to deal with new and trying situations.
• Has ability for autonomous decisions and commitments features.
• Criteria which makes IA more personalized – cooperation, negotiation
and conflict resolution.
Synonyms of software agents
Knowbots, softbots, taskbots, userbots, robots, personal agents,
autonomous agents and personal assistants.
Software Agents
Studies CSIBER

Reasons for using software agents
1. Mundane personal activity :
• minimize the time spent on routine personal tasks
• Users can devote more time to professional activities.
2. Search and retrieval :
Perform cumbersome, time consuming tasks of searching databases,
retrieving and filtering information and delivering it back to the users.
3. Repetitive office activity :
• Automate clerical and administrative tasks in sales and customer
support
• Reduces labour costs.
4. Domain Support :
Provide support to knowledge workers.
5. Domain Experts :
Expert software agents could be models of real world agents such as
Translators, lawyers, diplomats, union negotiators and stock brokers.
Software Agents
Studies CSIBER

Applications of Software Agents
Advising, alerting, broadcasting, browsing, critiquing, distributing,
enlisting, empowering, explaining, filtering, guiding, identifying,
matching, monitoring, navigating, negotiating, organizing, presenting,
querying, reminding, reporting, retrieving, scheduling, searching,
securing, soliciting, sorting, storing, suggesting, summarizing,
teaching, translating and watching.
Software Agents
Studies CSIBER

Software Agents : Typology
Studies CSIBER

Basic characteristics of agents
1. Autonomy :
• can operate on their own without human guidance.
• have individual internal states and goals.
• Key attribute – proactiveness.
2. Co-operate :
• having ability to interact with other agents, human and external environment.
• Possess a social ability.
3. Learn :
• having capability to learn from external environment.
• Key attribute – intelligence
Studies CSIBER

Collaborative Agents :
• Emphasize autonomy and cooperation in order to perform tasks for their
owners.
• General characteristics - autonomy, social ability, responsiveness,
proactiveness.
Use of collaborative agents
1. To solve larger problems – inability of centralized single agent due to resource
limitations.
2. To allow interconnecting and interoperation of multiple existing legacy systems.
3. To provide solutions to inherently distributed problems. e.g. Air traffic control
4. To provide solutions in the form of distributed information sources.
5. To provide solutions where the expertise is distributed e.g. healthcare
6. To enhance modularity, speed, reliability, flexibility and reusability at knowledge
level.
7. To research into other issues.
Studies CSIBER

Interface Agents
Emphasize autonomy and learning to perform tasks of owner.
Personal assistant
Assist users by four ways
1. By observing and imitating the user.
2. Receiving positive and negative feedback from user.
3. Receiving explicit instructions from users.
4. Asking other agents for advice.
Studies CSIBER

Mobile Agents
• Computational software processes capable of roaming WAN
• Interacting with foreign hosts,
• Gathering information on behalf of their owners
• Perform duties set by their users.
Need for mobile agents
1. Reduced communication costs.
2. Limited local resources.
3. Easier coordination.
4. Asynchronous computing.
5. Natural development environment.
6. A flexible distributed computing architecture.
7. Rethinking on design process
Studies CSIBER

Information Agents
• Tools manages explosive growth of information.
• Perform role of managing, manipulating or collating information from
distributed sources.
Motivation for developing Information Agents
1. Need for tool to manage huge information on WWW. E.g. search
engines
2. Financial benefits e.g. Netscape, internet explorer
Characteristics of Information Agents
1. They may be static or mobile.
2. They may be non-cooperative or social.
3. They may or may not learn.
Studies CSIBER

Reactive Software Agents
• Special category – do not possess internal, symbolic models of their
environment.
• Act/respond in stimulus-response manner to present state.
• Relatively simple and interact with other agents
Motivation for use of Reactive Agents
1. More robust and fault tolerant
2. Flexible and adaptability
3. Expanding the range and number of applications.
4. Scalability and performance.
Studies CSIBER

Hybrid Software Agents
• Combination of two or more agent philosophies within singular agent.
• Philosophies – mobile philosophy, interface agent philosophy,
collaborative agent philosophy.
Criticism of hybrid Architectures
1. Hybridism usually translates to ad hoc or unprincipled design with all its
related problems.
2. Tend to be very application specific.
3. Theory which undermines the hybrid system is not usually specified.
Studies CSIBER

Heterogeneous Software Agents
• Integrated set-up of at least two or more agents which belongs to two
or more different agent classes.
• May contain one or more hybrid agents.
• Key requirement for interoperation – Agents communication language
(ACL)
Benefits of heterogeneous agent technology
1. Provide value-added services
2. Simplifies software legacy problem – heterogeneous agent technology
may lessen the effect of routine software maintenance, upgrades and
rewrites.
3. Provide new approach of software engineering.
Studies CSIBER

Smart agents
Agents which can
learn,
cooperate and
are autonomous.
Studies CSIBER

E-security
Need for network security
• Private networks exposed to potential threats
• Protection from threats.
• Cyber crime – leaves physical and electronic evidence.
Security in E-business
• Needs protection against unknown
• To avoid loss of assets.
• To maintain relationship with customers.
• To protect its revenue streams, customer privacy and reputation.
• Determine adequate security measure according to business needs
Studies CSIBER

E-security : Security on the Internet
Internet – open access.
Risk factors for Internet Security :
1. Vulnerable TCP/IP services.
2. Ease of spying & spooling
3. Lack of policy.
4. Complexity of configuration.
Problems on Internet and contributing factors
1. Server Software Security.
2. Secure communications.
3. Delivering protected data to e-business.
4. Credit card transaction authentication and authorization.
Studies CSIBER

E-security
Studies CSIBER

E-security : Various Security Risks
I . Denial-of-Service Attacks (DoS) :
• Attacks on network to disable the network by flooding with
useless traffic or activity.
• DDoS – Multiple computers used for attack.
• Does not do technical damage
• Substantial financial damage.
Steps in Attack
• Attacker breaks into hundreds or thousands of random,
insecure computers.
• Install an attack program.
• Co-ordinates them all to attack the target simultaneously.
• Traditional defence do not work – system crashes.
Studies CSIBER

I . Denial-of-Service Attacks (DoS) :
Effects of DoS attack
• Data on websites remains unaffected
• can not steal credit card numbers/proprietary
information.
• No financial gains to attacker
• loss of income, reputation for site owners
Studies CSIBER

II . Viruses :
• Small program which inserts itself into another program
• Spread when an infected program executes.
• Effects : inability to boot, deletion of files/entire hard drives,
inability to create or save files, & so on.
• Sources : e-mails, unauthorized network access.
• Example : Logic bomb – attack triggers by event.
Stoned, Michelangelo and AutoStart 9805
Studies CSIBER

E-security : E-business Risk Management Issues
1. Business interruption caused by website defacement or DoS
attack.
2. Litigation and settlement costs over employees’ inappropriate
use of e-mail and the internet.
3. Product or service claims against items advertised and sold via a
website.
4. Web- related copyright, trademark and patent infringement
lawsuits.
5. Natural or weather-related disasters.
Studies CSIBER

E-security : E-business Risk Management Issues
Risk management programs
• Network and website security and intruder detection programs.
• Antivirus protection
• Firewalls
• Sound security policies and procedures.
• Employee education.
Studies CSIBER

E-security : Transfer of risk via Insurance
Studies CSIBER

E-security : Internet Firewalls
• System or group of systems that enforce a security policy
between an organization’ network and the internet.
• Give permissions to insiders and outsiders to access
services.
• Forces connections to pass through the firewall for
examination and evaluation
Studies CSIBER

Benefits of firewall
1. Protection of Vulnerable Servies:
• Filter insecure services-improve security, reduce risk to hosts on the
subnet
• Selected protocols allowed to pass through firewalls.
• Prohibit vulnerable services like NFS.
• Prevent services from being exploited by outside attackers.
• Provide protection from routing based attacks.
2. Controlled Access to site Systems:
• Only some hosts made reachable from outside networks.
• Outside access prevention for special cases e.g. mail server, information
servers.
Studies CSIBER

3. Concentrated Security:
• Additional security software can be located on the firewall systems
instead of distributing on many hosts.
• Cost saving for organizations
.
4. Enhanced privacy:
• Information about site contains clues for attackers.
• Firewall blocks services like finger and DNS
• Finger – displays information about user(login, email id etc)
• DNS – names and IP addresses of site system.
• Firewall hides such information.
Studies CSIBER

5. Need for usage statistics on Network:
• Firewall provides valuable statistics about network usage.
• Act as input into network requirement studies and risk analysis.
6. Policy Enforcements:
• Access control to users and services.
• Sites should not depend on the internet users for cooperation.
Studies CSIBER

Firewall Components
1. Network policy.
2. Advanced authentication mechanisms.
3. Packet filtering.
4. Application gateways.
1. Network policy :
Levels of network policy
i. Higher level policy : service access policy
ii. Lower level policy : Firewall design policy
Studies CSIBER

i. Higher level policy : service access policy
• Issue specific policies defines services to be allowed or denied from
restricted network.
• Focuses on internet specific and all outside network access.
• Must be realistic and sound, should drafted before firewall
implementation.
• Realistic – provides a balance between protecting the network from
known risks and providing users with network resource access.
• Example :
• Allow no access to a site from the internet, but allow access from
the site to internet.
• Allow some access from internet like e-mail servers, information
servers.
Studies CSIBER

ii. Lower level policy : Firewall design policy
• Specific to firewall
• Define rules to implement the service access policy.
• Understanding of firewall capabilities, limitations and threats and
vulnerabilities associated with TCP/IP is necessary.
• Implements two basic design policies
a. Permits any service unless it is expressly denied.
• Allow all services to pass into the site by default
a. Deny any service unless it is expressly permitted.
• Denies all services to pass into the site by default
Studies CSIBER

2. Advanced Authentication :
• traditional security mechanism – password security.
• Users advised to choose difficult passwords.
• Intruders can monitor the internet for passwords.
• Advanced authentications – smartcards, authentication tokens,
biometrics and software-based mechanism.
• Advanced authentications devices – one time password systems.
• Passwords generated by advanced authentication devices cannot
be reused by attackers.
• Example : smart card, tokens work in conjunction with software or
hardware on the host, generated response is unique id for every
login.
Studies CSIBER

2. Advanced Authentication :
Studies CSIBER

3. Packet Filtering :
• Done by packet filtering router.
• Filters IP packets based on fields
1. Source IP address
2. Destination IP address
3. TCP/UDP source port
4. TCP/UDP destination port
Studies CSIBER

Studies CSIBER

4. Application Gateways :
• Need for firewall Software applications (proxy services) – To
counter weaknesses associated with packet filtering routers.
• Forward and filter connections for services like telnet, FTP.
• Application gateway – Host running proxy services.
• Application gateway and packet filtering routers can be combined –
provide higher level of security and flexibility.
Studies CSIBER

E-Marketing
Studies CSIBER

E-Marketing
 Accelerating confluence of traditional print and broadcast media with
new digital media
 Internet provides marketers with efficient and powerful methods of
designing, promoting and distributing products, conduct research, and
gathering market information.
 E-marketing include any internet-based promotion using
• Websites
• Targeted e-mail
• Internet bulletin boards
Studies CSIBER

E-Marketing
Traditional Marketing :
Studies CSIBER

E-Marketing
Problems with Traditional Marketing :
1. Expensive :
• Involves cost to produce and print brochures, product sheets and
catalogues.
• Involves cost to provide customer support.
• Involves cost in postage and shipping.
2. Time consuming :
• Consume time to correct mistakes in printing.
• Consumes time – to wait for month for an ad to appear in
publication.
3. Hit and miss quality :
• Marketers often send bulk of mails to customers and receive tiny
response.
• Do not come across right customers.
Studies CSIBER

E-Marketing
Identifying Web Presence Goals :
 Traditional businesses : Success relies on fulfilling objectives like-
• Find a convenient location for customer access.
• Sufficient floor space features to allow selling activity.
• Room space to store inventory.
• Working space for employees.
• Interior decoration to enhance business ambience and attract
customers.
 Web businesses :
• Creating space of own choice, design.
• Websites can have images, animations to attract customer.
• Website serve as a sales brochure, a product showroom, a financial
report, an employment ad, customer contact point etc.
Studies CSIBER

E-Marketing : Identifying Web Presence Goals
Achieving Web presence Goals :
Effective web site creates an attractive presence that meets the following
business objectives :
1. Attracting visitors to the website.
2. Making site interesting enough so that visitors stay and explore
3. Convincing visitors to follow the site’s links to obtain information.
4. Creating an impression consistent with the organization’s desired
image.
5. Building a trusting relationship with visitors.
6. Reinforcing positive images that the visitor might already have about
the organization.
7. Encouraging visitors to return to the site.
Studies CSIBER

The uniqueness of the web :
• Mid 1990s – Firms started creating websites.
• Convey basic information.
• Market research is done for understanding needs of potential
customers.
• Now includes links to fairly standard information set.
• Give visitors
 easy access to its history,
 statements about its objectives or mission
 Information about products or services offered,
 Financial information
 Means of communication with organization.
Studies CSIBER

Meeting the needs of Website Visitors :
• Learning about products or services that the company offers.
• Buying the products or services that the company offers.
• Obtaining information about warranties or service and repair policies
for products they have purchased.
• Obtaining general information about the company or organization.
• Obtaining financial information for making an investment or credit-
granting decision.
• Identifying the people who manage the company or organization.
• Obtaining contact information of a person or a department in the
organization.
Studies CSIBER

E-marketing value chain :
Studies CSIBER

Site Adhesion : Content, Format and Access
Content :
• Customer access website for contents.
• Want to navigate quickly to get more information
• Key factor – to match user’s psychological and technological sophistication
profile with that of site’s initial and subsequent impact.
Format :
• Selection of data formats.
• To create viewer interest and engage the viewer in a prolonged interaction.
• Vendors need to create balance between information provision and information
delivery speed.
Access :
• Access depends on the bandwidth requirement.
• Use minimal bandwidth for initial interaction to facilitate wide audience.
Studies CSIBER

Maintaining a Website :
Businesses should try to meet the following goals-
Studies CSIBER

Metrics Defining Internet Units of Measurement :
To access two things-
1. Advertising – how many people saw our banner ad?
2. Visitation – how many people came to our site?
Metrics types :
1. Direct measurement : does not depend on the measurement of any
other attribute.
2. Indirect measurement : involves measurement of one or more other
attributes.
Studies CSIBER

Studies CSIBER

Limitations of indirect metrics
1. Click-through captures.
2. Time spent
3. Time spent searching
4. Time spent before click-through
5. E-mails and telephone calls
6. Registered users.
Studies CSIBER

E-Marketing : The Browsing Behaviour Model
• Session
• session activities : login, browse, search, add to shopping cart, pay etc.
• customer model – captures elements of users behaviour used for
navigational and workload prediction.
Browsing Behaviour Model of an Online Video Store:
1. Connect to the home page and browse the site by following links to
bestseller videos and promotions of the week per video category.
2. Search for titles according to various criteria including keywords and title.
3. Select one of the videos that results from a search and view additional
information like price, shipping time, ranking, reviews etc.
4. Register as a new customer of the virtual video store.
5. Login with username and password.
6. Add items to the shopping cart.
7. Pay for the items added to the shopping cart.
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Studies CSIBER

standard metrics for e-business site:
• Hits/second
• Page views/day
• Click-through
• Unique Visitors
• Revenue Throughput
• Potential loss throughput
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E-Marketing : Online Marketing
Market segments :
• Cyberbuyers :
• Professionals
• Deals from business places
• Make complex purchasing decisions
• Cyberconsumers :
• Home computer users
• Prefer online purchasing
• Cybersurfers :
• Generally young generation users
• Use technology to expand their horizons, challenge their abilities and for
fun
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Online payment
1. Traditional approach : send cheque, or call to merchant to give credit card no.
2. Consumer -
i. Sets up account with merchant
ii. Leaves credit card number without using internet.
iii. Gives authorization to merchant to bill the account.
3. Consumer leaves credit card number on an unsecure online order form.
4. Consumer uses secure (encrypting) client software program to transfer
credit card number.
5. Exchange traditional currency for some digital currency and then spends
units of that. “electronic wallets” require to hold currency.
Studies CSIBER

Advantages of online Marketing :
1. Offer bottom-line benefits
2. Save money
3. Save time
4. Customer control on purchasing process
5. Information rich and interactive
6. erases time and distance barrier – global reach
7. Offer equal opportunity for entry
8. 24x7 Availability
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Businesses that can flourish on the internet :
• Banking :
• Automated Teller Machine
• Online banking services – deposits, withdrawals, fund transfer,
loans etc.
• Online financial services
• E-cash services
• Databanks :
• Search engines
• Music :
• Websites offering - Downloading recordings, creating virtual
communities, buy records, access sample and value added
information like lyrics, scores etc.
• Retailing :
• Online shopping malls.
Studies CSIBER

E-Marketing : E-advertising
Reasons foe e-advertising:
1. Increasing preference to surf on web than watching TV
2. Target audience go to advertisement.
3. Business search engines- link customers to online bargaining sites, allow
comparison shopping.
4. Businesses get valuable information about customer preferences through
online contest and prizes to online participants. E.g. yahoo
5. The growth of e-business. e.g. dell computers- 85% sales through internet.
6. No geographical restrictions.
Studies CSIBER

E-Marketing : E-advertising
Means of Advertising :
• E-mail
• Banners
• Skyscrapers :extra long skinny ads running down right or left side of page
• Banner swapping
• Streaming Video and Audio
• Effectiveness Tracking :cookies
• Mini sites and Pop-ups : ads burst upon the screen
• Interstitials :new windows while visiting one website.
• Sponsorships :helps to build sponsor’s brand by presenting it.
• Coupons : offering discount coupons e.g. coolsavings.com
• Pay per advertising view :
• Loyalty programs
• Partnerships
• Innovative Customer Acquisition
• Providing Information
• Leverage the Customer Base
• Personalized Online Communications
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E-Marketing : Internet Marketing Trends
Studies CSIBER

E-Marketing : Target Markets
• Identifying and analyzing a target market.
• creating a marketing atmosphere that satisfies the individuals in the
market.
• Using internet : currently 100 million Indians uses internet.
• Men – long dominated internet usage
• Women –
•using internet for work and to simplify lives, to save time, money .
•for online shopping
• Teenagers – for online shopping, surfing etc.
• Seniors
Studies CSIBER

E-Marketing : Target Markets
Product Considerations :
•Products – goods, services and ideas
•Leading organizational purchase – computers, peripherals, industrial
supplies, packaged software
•Consumer purchase – trading, travel/tourism, books, videos, CDs, toys,
automobile goods, groceries
•Ideas like marriage counseling, medical advice, tax/legal advice
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E-Marketing : E-branding
Brand name – carries reputation.
Needs tremendous amounts of expenditure and time.
Elements of Branding
1. Differentiation :
distinguishing product from all other products in market.
Difficulties for products – salt, nails, plywood etc.
2. Relevance
3. Perceived value
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Studies CSIBER

Spiral Branding : The advent of internet sites and mailing make possible a
new form of marketing called spiral branding.
Three stage branding spiral:
1. Use television, prints or radio to attract people’s attention and Send them
to web.
2. Use web to get those customers take interest in your product (via
interactive services) . Collect their e-mail addresses.
3. use e-mail to remind and induce them to return to web again.
E-mail closes the loop and takes people around the spiral again.
Studies CSIBER

Emerging Strategies for E-branding :
1. Search engine optimization :
• half of web users uses search engines
• optimizing ranking in search result
• appearing among first few pages of top search engine
• maximizing visibility on search engine.
2. Affiliate Networks :
• Careful planning and management of partner programs for broad
reach of links on affiliate sites.
• Reward referring to sites with the commission or bounty based on
click through, sales lead or completed transactions.
• Cost-effective than standard cost-per-thousand banner campaigns.
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3. Advocacy Marketing :
• Recommendation
• Through mouth publicity to friends.
• Strategy known as “viral marketing” by online marketers.
• Need to provide incentives e.g. discounts, loyalty currencies
and simple mechanisms e.g. web-based e-mail forms, pass-along e-mail
newsletters to enlist their customers as marketing advocates to their friends.
4. Permission E-mail :
• Most cost-effective and brand-positive means of acquiring new customers
and remarketing to existing customers.
• Example : Customer relationship e-mail, corporate e-mail newsletters,
reminder services, permission networks, sponsored independent newsletters,
discussion lists, and partner co-marketing can drive online traffic and enhance
brand equity. Mrs. Geetanjali A. Bhosale. Dept. og Comp.
Studies CSIBER

5. Personalization and Mass Customization :
• Allowing customers to configure products and services.
• One-to-one interaction of customer with brand.
6. E-care :
• Key component of brand- the quality of customer service and support.
• Customer expectations – managing a torrent of customer e-mail inquiries,
enabling efficient self-service knowledge bases.
• Proper allocation of resources
Studies CSIBER

E-Marketing : Marketing Strategies
 Permission-marketing Strategies :
• e-mails - to announce new products or sale existing products.
• Print and broadcast journalists criticize businesses for sending mails.
• Businesses face legal actions after sending mass e-mails.
• Unsolicited e-mail – spam.
• Opt-in e-mail – practice of sending e-mail messages to people who have
requested information. E.g. yesmail.com
• Strategy called as permission marketing.
• Seller must provide some incentive to customer like entertainment, a
chance to win a prize or cash payment.
• Example : AllAdvantage.com pays web users for permission to monitor
their web surfing activities
Studies CSIBER

 Brand-Leveraging Strategies :
• Method for well established websites to extend their dominant position to other
products and services.
• Example :
1. Yahoo! :
• First directories on web.
• Added search engine function, entered into an extensive cross-
promotion partnership with no. of media companies and Fox
entertainment.
2. Amazon. COM :
• Book business
• Expansion into CDs, videos and auctions.
Studies CSIBER

 Affiliate-marketing Strategies :
• Works for firms that already have websites that dominates particular
market.
• One firms website includes descriptions, reviews, ratings, info for product
that is linked to another firm’s site who sales it.
• Affiliate site receives a commission.
• Obtains benefits of selling site’s brand in exchange for referral.
 Viral-marketing Strategies :
• Traditional marketing strategies – communication with potential customers
through distributor, retailer or independent sales organization.
• Web expands communication channels – customer-to-customer, viral
marketing.
Studies CSIBER

 Website Naming Issues :
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E-Payment Systems
• Growth of E-commerce dependent upon the existence of secure,
user-friendly and cost effective payment systems.
• payment systems are common denominator of all e-commerce
transactions.
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E-Payment Systems
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E-Payment Systems : Digital Token
1914 – Charge cards : limited to local markets
1958 – modern credit card : wide acceptance
1970 – VISA : global joint venture
1990 – debit cards :access funds in accounts at point of sale.
U-commerce – universal commerce : ability to conduct commerce
anywhere, anytime or any way using PDA and mobile phones
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Benefits of Buyers :
• Convenience of global acceptance, a wide range of payment options,
and enhanced financial management tools.
• Enhanced security and reduced liability for stolen or misused cards.
• Consumer protection through an established system of dispute
resolution
• Convenient and immediate access to funds on deposit via debit cards.
• Accessibility to immediate credit.
Studies CSIBER

Benefits of Sellers :
Speed and security of transaction processing chain from verification and
authorization to clearing and settlement.
Freedom from more costly labour, materials and accounting services that
are required in paper-based processing.
Better management of cash flow, inventory and financial planning due to
swift bank payment.
Incremental purchasing power on the part of the consumer.
Cost and risk savings by eliminating the need to run an in-house credit
facility.
Studies CSIBER

E-Payment Systems : E- cash
• Meaning : electronic money
• Properties of E-cash : monetary value, interoperability, retrievability,
security
1. Monetary value :
• Backed by either cash, a bank-authorized credit, or a bank certified
cashier’s cheque.
• Without bank certification carries the risk to be returned for insufficient
funds.
2. Interoperability :
• Exchangeable as payment for other cash, paper cash, goods or services,
line of credit, deposits in banking account, bank notes etc.
• Most e-cash use single bank.
• Multiple banks required with international clearing house to handle
exchange issues.
Studies CSIBER

3. Retrievability :
• Allow users to exchange e-cash from home or office or while traveling.
• Cash could be stored on a remote computer’s memory, in smart cards or
special purpose devices.
• Example : Mondex card – a pocket-sized electronic wallet.
4. Security :
• Preventing or detecting duplication and double-spending.
• Counterfeiting
• Double spendingMrs. Geetanjali A. Bhosale. Dept. og Comp.
Studies CSIBER

E-cash in Action
• E-cash based on cryptographic system digital signatures.
• Involves pair of numeric keys that work in tandem.
• Private key - One for locking or encoding
• Public key - Other for unlocking or decoding
Purchasing E-cash from Currency Servers :
• Involves two steps :
1. Establishment of an account
2. Maintaining enough money in the account to back the purchase.
• Customers prefer to purchase e-cash with paper currency.
• Note generation:
• Consumer uses e-cash software to generate note (random number)
• Bank uses private key to digitally sign note.
• Currency server issues “bank note” that commits it back note in real
dollars.
• Secure because neither payee nor payer can counterfeit banks digital
signature.
Studies CSIBER

E-cash Concept
Merchant
Consumer
Bank
1
2
3
4
5
1. Consumer buys e-cash from Bank
2. Bank sends e-cash bits to consumer (after
charging that amount plus fee)
3. Consumer sends e-cash to merchant
4. Merchant checks with Bank that e-cash
is valid (check for forgery or fraud)
5. Bank verifies that e-cash is valid
6. Parties complete transaction: e.g., merchant
present e-cash to issuing back for deposit
once goods or services are delivered
Consumer still has (invalid) e-cash
Studies CSIBER

Detecting Double Spending
Studies CSIBER

Advantages and Disadvantages of
Electronic Cash
 Advantages
 More efficient, eventually meaning lower prices
 Lower transaction costs
 Anybody can use it, unlike credit cards, and does
not require special authorization
 Disadvantages
 Tax trail non-existent, like regular cash
 Money laundering
 Susceptible to forgery
Studies CSIBER

Using the Digital Currency :
Two types of transactions possible
1. Bilateral
• two party transactions – buyers and sellers
• Merchant checks the veracity of the note’s digital signature by
using the bank’s public key.
• If satisfied with the payment, the merchant stores the digital
currency on his machine and deposit it in bank later on.
2. Trilateral
• Three party transaction – buyers, sellers and bank.
• Note are sent to merchant, who immediately sends them directly
to the digital bank.
• Bank verifies notes.
• Merchant’s account is credited.
• Every note can be used only once.
Studies CSIBER

Operational Risks and E-cash
1. The time over which a given electronic money is valid,
2. The amount that can be stored on and transferred by electronic money,
3. The number of exchanges that can take place before money needs to be
re deposited with a bank or financial institution
4. The number of such transactions that can be made during a given period
of time
Studies CSIBER

E-Payment Systems : Cheque Payment Systems
Magnetic Ink Character Recognition (MICR) :
• Data are printed at the bottom of cheques in magnetic ink.
Check free payment services of CheckFree :
• September 1995 – CheckFree offered the electronic cheque service on
internet
Electronic Cheque (E-cheque) :
FSTC –Financial Services Technology Consortium
group of 60 organizations in the US including financial institutions,
clearing houses, universities, and companies.(1993) for development of
payment systems for E-commerce.
Studies CSIBER

E-Payment Systems : E-Cheque
Five major development projects of FSTC :
• Cheque truncation
• Electronic commerce
• Security measures
• Smart card system
• E-cheque
Studies CSIBER

E-Payment Systems : E-Cheque
• Consumer posses an electronic chequebook on a Personal Computer
Memory Card International Association (PCMCIA) card
• Cheques are written electronically from the e-chequebook on the card as needed.
• Sent to retailer over internet
• Retailer sends them to customer’s bank
• Settlement is made through a financial network like Automated Clearing House(ACH)
• Payment data, commercial data like invoice number and date of receipt can be
enumerated.
• Higher degree of efficiency by eliminating duplication.
• FSTC experimenting adoption of smart card as electronic chequebook.
• Electronic signature with public key encryption adopted by FSTC for data security
over internet. Mrs. Geetanjali A. Bhosale. Dept. og Comp.
Studies CSIBER

E-Payment Systems : Cryptography
• Increasingly used in encryption, authentication, integrity, non-repudiation,
management of other crypto systems like key management.
• Relies on two basic components :
1. Algorithm –
• cryptographic methodology
• Method used to encrypt message
• Complex mathematical formulae
2. Key –
• Object used to decrypt message
• Strings of bits.
• Keys and algorithm kept secret.
• Two parties want to communicate must use same algorithm.
• Some cases uses same key
• Method of encryption may hold the method to decrypt the message.Mrs. Geetanjali A. Bhosale. Dept. og Comp.
Studies CSIBER

Basic terminology
 Plaintext: original message to be encrypted
 Ciphertext: the encrypted message
 Enciphering or encryption: the process of
converting plaintext into ciphertext
 Encryption algorithm: performs encryption
 Two inputs: a plaintext and a secret key
237
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Symmetric Cipher Model
238
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 Deciphering or decryption: recovering
plaintext from ciphertext
 Decryption algorithm: performs decryption
 Two inputs: ciphertext and secret key
 Secret key: same key used for encryption
and decryption
 Also referred to as a symmetric key
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Examples of Encryption Techniques
1. Caesar Cipher :
 Earliest known substitution cipher
 Invented by Julius Caesar
 Each letter is replaced by the letter k (three) positions further down the
alphabet.
• Plain: a b c d e f g h i j k l m n o p q r s t u v w x y z
Cipher: D E F G H I J K L M N O P Q R S T U V W X Y Z A B C
 Example: ohio state  RKLR VWDWH
 K can be any possible value of alphabet 1 to 26
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2. Letter Pairing :
• Similar to Caesar’s method
• Letters are paired off with each other in random manner
• Example:
A -> Z
B -> Y
C -> X
• Overcomes limitations of Caesar’s method
• Yet not safe – can easily decrypted by using techniques such as
frequency analysis.
• In large message by counting repetition of letters , third party can
judge letters by comparing the data with average frequencies of
usage of letters.
Studies CSIBER

3. RSA :
• Invented by three cryptographers – Rivest. Shamir and
Adleman
• First practical commercial public key cryptosystem.
• Used in web browsers, e-mail programs, mobile phones,
virtual private networks, secure shells etc.
• Encryption uses large prime numbers for its purposes
• Works on the basic fact that large numbers are extremely
difficult to factorize.
Studies CSIBER

RSA Key Setup
 each user generates a public/private key pair by:
 selecting two large primes at random - p,q
 computing their system modulus n=p.q
-define ø(n)=(p-1)(q-1)
 selecting at random the encryption key e
 where 1<e<ø(n), gcd(e,ø(n))=1
 solve following equation to find decryption key d
 e.d=1 mod ø(n) and 0≤d≤n
 publish their public encryption key: PU={e,n}
 keep secret private decryption key: PR={d,n}
Studies CSIBER

RSA Example - Key Setup
1. Select primes: p=17 & q=11
2. Compute n = pq =17 x 11=187
3. Compute ø(n)=(p–1)(q-1)=16 x 10=160
4. Select e: gcd(e,160)=1; choose e=7
5. Determine d: de=1 mod 160 and d < 160
Value is d=23 since 23x7=161= 10x160+1
6. Publish public key PU={7,187}
7. Keep secret private key PR={23,187}
Studies CSIBER

4. DES : Data Encryption Standard
• Widely used secret key encryption algorithm.
• History :In 1973, NIST published a request for proposals for a national
symmetric-key cryptosystem. A proposal from IBM, a modification of
a project called Lucifer, was accepted as DES. DES was published in
the Federal Register in March 1975 as a draft of the Federal
Information Processing Standard (FIPS).
• Encrypts and decrypts data in 64-bit blocks, using 56-bit key.
• Uses permutation and substitutions in algorithms.
• Widely used by financial services and other industries worldwide to
protect sensitive online applications
Studies CSIBER

DES is a block cipher, as shown in Figure
Encryption and decryption with DES
Studies CSIBER

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