This document discusses the four layers of infrastructure that support e-commerce businesses: network technology substrates, transport services and representation standards, middleware services, and client applications. It explains that each layer depends on the others and businesses must understand how changes at one layer can impact the others. The infrastructure must be able to support the business's value proposition and adapt to changes in technology, markets, and competition. Understanding these layers is key to building a solid infrastructure for a successful e-commerce business.

1. BBA 3331, Introduction to E-commerce 1
Course Learning Outcomes for Unit III
Upon completion of this unit, students should be able to:
5. Explain the four infrastructures influencing e-commerce
strategy.
8. Examine the combination of hardware, software, and external
systems that make up a site's
architecture.
Reading Assignment
Chapter 3: E-commerce Infrastructure: The Internet, Web, and
Mobile Platform
Unit Lesson
In Unit III, we delve into what actually makes up the Internet or
the infrastructures supporting the World Wide
Web. Every business needs an infrastructure that will support
the day-to-day operations of the business and
the needs of customer. In some regards, having an e-commerce

2. business is no different than running a brick-
and-mortar storefront—they both require an infrastructure that
supports the business strategy.
One of the key components of every e-commerce business
model is the value proposition. This is what
separates one e-commerce business from its competition. If the
value proposition is to provide outstanding
customer service while delivering a premium product, the
business needs to know that it can provide and
afford the infrastructure to support its value proposition
(Traxler, 2012).
It is easy for an e-commerce business plan to have a value
proposition statement that declares the lowest
price for a given product every day. However, if the
infrastructure to support such a claim exceeds the cost of
doing business, the company will lose all of its money and be
unable to remain open for business (Traxler,
2012).
An e-commerce business owner must have a better-than-average
understanding of what infrastructure is
needed to support the current business strategy. Business
owners must have an ongoing understanding of
how the Internet operates. Businesses must be able to adapt to
changing market trends as well as the ever-
changing web and mobile platforms (Traxler, 2012).
There is nothing static about the Internet, and entrepreneurs
must being willing and able to adapt to the
changes occurring with the Internet. Also, being able to react
quickly to market trends and to pressure from
the competition are the types of things that need to change
within a business’s infrastructure in order to adapt
to such changes. The structure of the Internet economy is

3. divided into four conceptual layers, and all layers
are dependent upon each other (Laudon & Traver, 2015, p. 130):
UNIT III STUDY GUIDE
E-commerce Infrastructure
BBA 3331, Introduction to E-commerce 2
UNIT x STUDY GUIDE
Title
Starting from the bottom up, we have layer one, the network
technology substrates layer. At this layer, we see
the service providers, backbone carriers, and last-mile-access
companies. This is where the e-commerce
business connects to the Internet. The responsibility for this
layer stops at the demarcation point (DEMARC),
which is the point where the provider connects the Internet to
the business. Usually, such a connection
includes a router or modem. The owner’s responsibility stops
there (Rumble, 2009).
A business owner would be well advised to shop around for the
best provider, which often does not equate to

4. the best deal. All the major internet service providers (ISPs) are
required to lease a certain number of their
connections to smaller providers. Often, the smaller providers
will charge more and provide less incentives.
Every business owner should ask the following question when
leasing internet access: who owns the line the
business is about to lease?
The owner needs to understand what internet services are
available and at what price. The determining factor
would be how the company intends to use the Internet. This can
be determined by the value proposition
component of the e-commerce business model.
At layer two, we see the transport services and representation
standards. These include the TCP/IP protocol
suites, IPv6, and IPv4. This is a very small layer and has little
to do with any component of the e-commerce
business model. This layer is used to support the TCP/IP suite
of protocols.
At layer three, we have our middleware services, files storage,
security, and files systems. This is a critical
area for e-commerce, and in the coming years, it will be very
apparent how important this layer is for the
industry. Also at layer three, we have cloud services—anything
that can be stored locally on-site can also be
pushed to the cloud. One example is web servers. An e-
commerce owner can pay for hardware and software
licensing and maintain his or her servers onsite, or the owner
can lease the same hardware and software
from a cloud provider. The upside to using the cloud option is
the reduced costs of having to maintain,
upgrade, and support the physical hardware. Also, having the
business servers stored and maintained at a
remote data center can be very cost effective (Tejada, 2014).

5. As the Internet of things (IoT) becomes more prevalent, there
will be more middleware products available to
support the business needs of e-commerce business owners. The
rapid changes at this layer require that the
business owners have reliable vendors to provide the best
advice on what middleware products would be
best to support their current business strategy. As you are about
to see, it is the middleware layer that ties
layers two and four together (Tejada, 2014).
At layer four, we have the client application layer, streaming
video, e-mail, remote access, and web browsers.
Layer four involves the desktop experience. This is where
everything appears in a user-friendly output
regardless if it is audio, video, or a web page. This is a key area
for every e-commerce business, as this is
where the end user (or customer) will meet the business and its
products and/or services. Every decision
made at layer one and layer three will affect what happens at
layer four.
We can see the importance of understanding the architecture of
the Internet and how these four layers must
be addressed within the eight components that make up every e-
commerce business model.
Layer 4: Applications
Layer 3: Middleware Services
Layer 2: Transport Services and Representation Standards
Layer 1: Network Technology Substrate

6. BBA 3331, Introduction to E-commerce 3
UNIT x STUDY GUIDE
Title
All the possibilities in the world cannot hold up to the
limitation imposed by a lack of a modernized economy
infrastructure. Since Internet growth is happening so fast, no
amount of reconstruction nor renovation could
possibly keep up with the rapid need. We must also realize what
happens at one layer of the Internet
economy infrastructure affects the other three. We now see this
with the saturation of mobile technology
applications. The use of mobile devices has saturated layers
one, two, and three.
With users at an all-time high and with revenue forecasts that
are expected to nearly double by 2018, what
could be limiting the future of the Internet is technology
outrunning the architecture. There are four major
areas that need to be addressed if the Internet is to continue on
as it is (Laudon & Traver, 2012):
1. Bandwidth limitations: Bandwidth is a commodity. It is not
infinite nor without end. Everyone wants
more—users cannot access online content fast enough. So, the
industry must be prepared to install
new and improved network cabling that can handle the demands
of the users. Also, the plan to install

7. such improvements must begin with the backbone carriers and
continue down through the system
until it finally reaches the service providers. With today’s users
wanting more, doing more, and
achieving more, e-commerce businesses must avoid bandwidth
limitations when possible. Fiber
networks have been installed and available for users in select
locations. However, these isolated
networks quickly become saturated due to the high demand of
users requesting faster access.
2. Quality of service limitations: Latency is the time it takes
one packet to travel from point A to point B.
This should not be confused with bandwidth, which is the
highway on which the data packet travels. If
the highway becomes congested, then we have latency.
Although not terribly noticeable when
receiving e-mail, latency typically occurs when users view
streaming video.
3. Network architecture limitations: When we look at the
limitations on Internet growth, it primarily comes
back to the physical architecture that is in place. In other words,
has the updated hardware reached
both the end user and also the provider? For instance, users may
have a fiber network near their
houses, and it could be less than a quarter of a mile away.
However, until the fiber network actually
reaches them, they are confined to the limitations that
accompany the slowest technology that still
exists within the architecture of the network. For e-commerce
business owners, that is another
opportunity lost.
4. Wired Internet: From the service provider part of the
infrastructure, being tethered to a wired

8. connection is still how most of us connect. Wireless technology
has not lived up to its full potential,
which is evident by how saturated mobile networks have
become due the growth of smart technology.
As an e-commerce manager, operator, and entrepreneur, you
need to formulate a strategic plan that
specifically addresses the four layers of infrastructure. The
infrastructure must also address the potential
impact of business operations as they relate to the Internet, the
web, and the mobile platform. With the rise of
capabilities on the Internet, we are just now beginning to see
what the future has in store for e-commerce and
its clients. Anything and anyone can access the Internet and be
monitored: everything from our houses being
wired to make the best use of electricity to our cars being
monitored for potential problems and even to our
health being monitored from afar. Modern technology provides
end users with several conveniences;
however, end users and their modern products could be confined
to the limitations of their dependencies,
such as the infrastructure of an e-commerce business or even
the provider’s architectural hardware that
supports its service. To combat these potential limitations for
both the end users and also for the personnel
operating an e-commerce business, it is vital to carefully plan
an infrastructure that leads to successful
experiences. If you can support talented personnel and maintain
happy customers, you should be well on
your way to a successful e-commerce business. It all begins by
building a solid infrastructure.

9. BBA 3331, Introduction to E-commerce 4
UNIT x STUDY GUIDE
Title
References
Laudon, K. C., & Traver, C. G. (2012). 6 e-commerce marketing
concepts: Social, mobile, local (8th ed.).
Upper Saddle River, NJ: Prentice Hall.
Laudon, K. C., & Traver, C. G. (2015). E-commerce: Business.
technology. society. (11th ed.). Upper Saddle
River, NJ: Pearson Education.
Rumble, S. M. (2009 June 3). Network substrate. Retrieved
from
https://ramcloud.atlassian.net/wiki/display/RAM/Network+subst
rate
Tejada, M. (2014, December 22). The Internet of things and the
middleware challenge. Retrieved from
http://pivotpoint.io/en-us/article/the-internet-of-things-and-the-
middlewar
Traxler, D. (2012, May 18). 7 key ecommerce-infrastructure
decisions. Retrieved from

10. http://www.practicalecommerce.com/articles/3545-7-Key-
Ecommerce-Infrastructure-Decisions
Learning Activities (Non-Graded)
The following video provides some insight into what is referred
to as the Internet of things:
Techquickie. (2014, November 30). Internet of things as fast as
possible [Video file]. Retrieved from
https://www.youtube.com/watch?v=BQzBpUdHvi4&feature=you
tu.be
The following video describes the details associated with
TCP/IP protocol suite, which is the basis for layer
two:
Professor Messer. (2015, May 13). The TCP/IP suite-CompTIA
network+ N10-006 – 5.2 [Video file].
Retrieved from
https://www.youtube.com/watch?v=JCviqx8YjTQ&feature=yout
u.be
Non-graded Learning Activities are provided to aid students in
their course of study. You do not have to
submit them. If you have questions, contact your instructor for
further guidance and information.