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Preface

Preface

In 1994, The Economist ranked the Internet between the telephone and the printing press in its long-term impact on the world. Just as those inventions transformed society, so the Internet has already begun a transformation—one that is happening much faster than the earlier revolutions. Commerce, of course, is one arena already feeling the effects of the Internet. In the past few years, we have seen dramatic changes in some businesses, the creation of new businesses, and significant effects on others.

When the first edition of this book was published in 1998, Internet commerce was still a relatively new idea and was not yet part of the mainstream thinking of businesses around the world. Today, that situation has clearly changed. Many companies now have long experience with Internet commerce, and some sellers, such as Amazon.com, have become household names. Indeed, since 1998 we have seen an enormous rise and fall of Internet commerce excitement, as the so-called dot-com companies have grabbed investment and attention but precious little revenue. Many people have concluded that Internet commerce was simply a quickly passing fad, all hype and no reality.

We think that the opposite is true. The Internet continues to revolutionize business in many ways, and one of those ways—which is the focus of this book—is the selling of goods and services directly to buyers over the Internet. The truth today is that many companies are doing it, and doing it profitably. This book is about creating the kinds of computer systems that can be used for that kind of business.

So what went wrong with the dot-coms? It is easy to find many problems, including some that seem laughably obvious in hindsight. A common and fundamental problem, however, was that the companies failed to focus on the use of Internet technology to deliver value to customers. What we attempt to do in this book is to explore precisely how to do that. The business strategy is, of course, a critical aspect of success in Internet commerce. Sometimes that strategy is essentially a traditional one that can now take advantage of the Internet as a new channel, whereas at other times the technology provides entirely new ways of bringing value to customers. We explore both of these paths.

In a sense, Internet commerce is no longer a cutting-edge idea. Rather, it has become one of the standard ways of doing business, even if not quite everyone is doing it yet. Such a shift in business practice has many implications, and one of the most important is that the computer systems have to get it right. In the early days of Internet commerce, losing an order wasn't a fatal mistake. The systems were not always robust. That situation has clearly changed. Today's customers have much higher standards and expectations, and they can easily find a competitor who can do a better job if one company fails to satisfy them. Sadly, many companies have not yet learned this lesson. As we were writing the last few pages of the manuscript for this book, there were reports of a well-known merchant system that allowed customers to change the prices at will. Such problems today are not just curiosities; they are significant risks to a company's continuing business.

The audience for this book is what we call the Internet commerce team. This team includes people responsible for business and those responsible for technology. It includes those who develop the strategic vision for a company and those who put the strategy into action. In other words, the Internet commerce team is the group of people who work to make Internet commerce happen, from vision to implementation.

Throughout the book, we emphasize both practice and principles—the what and the why. Practices are the actions—the specific ideas for specific circumstances. Principles are the general rules—the elements on which practices are built. As technology changes (or, for that matter, as business models change), the practices will need to change. The principles, in contrast, change more slowly and can be applied in a wide variety of circumstances. When a team understands the principles underlying what they do, they can adapt to changing circumstances and develop new practices. Without that understanding, they can become incapacitated when the situation changes and different practices are required.

What the technology brings is a combination of new opportunities, changing cost structures, new customers, and shorter response times. The technological opportunities must be combined with and tempered by the business goals. This book is about that combination—designing computer systems for doing business on open networks.

When we say this book is about design, we mean that it is intended to help with the design process. It doesn't give all the answers; the actual design for your business requirements is likely to be very different from someone else's. Nonetheless, we can explore some of the common issues and critical questions to ask when planning any system for Internet commerce. In the process, we look at some of the key technologies of today and apply those technologies in several examples.

A word of warning: at times it may seem that we are overly concerned with potential problems—the things that can go wrong. These are not reasons to avoid Internet commerce. Rather, we think it is important to approach Internet commerce as you would any other business proposition, understanding the downside as well as the upside, the risks as well as the benefits. On balance, using the Internet for commerce can be a tremendous asset for businesses. Doing everything possible to maximize the chances for success is merely good business.

We have created a Web site for this book at http://www.serissa.com/Commerce/.

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