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Chapter 3. Internet Business Strategy > Commerce and Technology Revolutions

Commerce and Technology Revolutions

It may seem odd to have a chapter on broad-brush business strategy in a book about the design of systems for Internet commerce. We think it makes sense, because the Internet changes so many of the facts underlying the basic assumptions of business. Jeff Bezos of Amazon.com has noted that changes in technology or infrastructure affect commerce in two phases, or waves. In the first wave, companies use the new technology to improve old processes and business models. In the second, more important wave, companies use the new technology for complete reinvention of their businesses. As we will see, the last time something as important as the Internet happened to business was in the middle of the nineteenth century when the railroad changed the world. That transition took 50 years. The Internet transition is happening much faster.

Because of the speed and scope of the changes introduced by the Internet, designers of Internet commerce systems cannot focus merely on the technology, but must also understand their companies' fundamental business strategies. Business leaders must also appreciate the technology enough to think through their strategies in terms of both new competitive opportunities and new competitive threats.


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