Download Part 1: The Relationship between Internet Technologies and

Part 1: The Relationship between Internet Technologies and Business
digital revolution: A term used to describe the ‘revolutionary’ changes to society and business,
beginning in the 1990s, that were brought about by technologies such as digital networks,
computer software and new digital media.
technological determinism: The idea that technology is autonomous and exists separately from
society. From this position it is seen as a primary force, influencing individuals and
organizations.
- Academics see all those who take a technological determinist stance as falling between two
extremes: hard technological determinism and soft technological determinism.
hard technological determinism: One extreme of technological determinism, which sees
technology as an autonomous force that drives society and business forward. Contrast with soft
technological determinism.
soft technological determinism: One extreme of technological determinism, which sees
technology as separate from society and providing the structure in which we live and do
business. However, we are not bound by these structures and we are able to affect the nature and
shape of technologies. Contrast with hard technological determinism.
co-construction: Occurs when consumers as well as producers play some part in determining
how technologies are constructed and shaped.
ARPANET: A network developed in 1969 by the Advanced Research Projects Agency, an
agency of the US Department of Defense, that became the basis for the Internet.
client side: A term referring to operations that are performed by the client in a client-server
environment. Contrast with server side.
HTML: (Hypertext Markup Language) The W3C standard used to structure documents on the
Web.
server side: A term referring to operations that are performed by the server in a client-server
environment. Contrast with client side.
XML: (Extensible Markup Language) A W3C standard for specifying document content in a
structured manner.
SOA (service-oriented architecture) An architectural approach to distributed software
development, intended to provide services to end-user applications or other services through
published and discoverable interfaces. These services can be linked together on demand.
web service: A technology or standard designed to facilitate machine-to-machine
communication.
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bleeding edge: The very forefront of technological development (ahead of cutting-edge
technology). Bleeding-edge technology is very new and therefore comes with high levels of risk.
innovator: An adopter category in the technology adoption lifecycle model, used to describe
those who adopt technology for its own sake. They are venturesome, thrive on risk and are able
to put together working solutions from not-yet-complete emerging technologies.
model: A simplified, often pictorial representation of a real-world phenomenon.
heuristic: A term used to describe an informal model that enables the discovery of new
knowledge and promotes discussion.
economist: Expert in the analysis of the production, consumption and transfer of wealth.
- The five typical stages of the wave from the start to its end:
1. Irruption.
2. Frenzy.
3. Turning point.
4. Synergy.
5. Maturity.
competitive advantage: Providing a product or service in a way that is perceived as having
greater value than that of competitors’ offerings. Sources of advantage can be superior
knowledge and the skills to apply superior (ICT) resources.
R&D (Research and Development): Those activities related to the creation of new products and
services.
disruptive technology: Technology that is perceived as transforming, displacing or creating new
economic markets and social structures.
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packet switching: A data transmission method in which messages are broken down into chunks,
sent independently through different routes and reassembled in order at their destination.
TCP/IP: A suite of protocols to facilitate communication between network devices. It is the
protocol that forms the basis of the Internet.
Usenet: An Internet service providing a network of newsgroups.
dot-com bubble (also called the dot-com boom): The period between 1995 and 2001 that saw
shares in technology-related businesses rapidly increase in value.
commodity item: A standard item that is not offered as part of a range and does not require any
customization before purchase, such as a book or CD.
NASDAQ Composite: A US stock market index that acts as a performance indicator for many
US-based technology companies.
virtual e-tailer: A retailer that uses the Web as the medium to sell its goods or services.
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- The adopters in the technology adoption lifecycle model (The idealized types):
1. Innovators: An adopter category in the technology adoption lifecycle model, used to
describe those who adopt technology for its own sake. They are venturesome, thrive on
risk and are able to put together working solutions from not-yet-complete emerging
technologies.
2. Early adopters: An adopter category in the technology adoption lifecycle model, used to
describe those who see the practical application for technologies before the majority.
3. Early majority: An adopter category in the technology adoption lifecycle model, used to
describe those who are followers rather than leasers and who wait to see practical
applications for a technology before they adopt.
4. Late majority: An adopter category in the technology adoption lifecycle model, used to
describe those who are skeptical and cautious with regards to technology adoption. They
require that most of the uncertainty and risk is removed before they adopt.
5. Laggards: An adopter category in the technology adoption lifecycle model, used to
describe those who are last to adopt a technological innovation. Laggards remain
suspicious of the benefits of a new technology until they have seen all their peers adopt.
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tipping point: A term made popular by Malcolm Gladwell in his book of the same name, used to
describe the moment at which something (e.g. a technology) becomes mainstream.
diffusion: The process by which an innovation is adopted by members of a social group.
SME: (small to medium-sized enterprise) A term used typically (in the UK at least) to describe a
company with no more than 250 employees.
Summary
In this part of Block 1 we have looked at the broad relationship between business organisations
and Internet and Web technologies. This relationship is not one in which technology drives
business forward in a hard technological determinist fashion, but one in which business and
social factors both have an important role to play. I have demonstrated the influence of these
other factors by employing two models to help us make sense of a complex situation.
The first, the Schumpeterian wave model of technological revolution, allows us to view the
current digital revolution from a broader perspective as one of a series of technological
revolutions that follow a similar economic pattern of irruption, frenzy, crash, synergy and
maturity. Investors financed e-business opportunities that resulted in rapid innovation but also,
because of their speculative nature, led ultimately to the dot-com crash of 2000. E-business is
currently in the synergy stage where innovation is not so rapid, a few large companies dominate
the landscape, and the focus is on making the technology reliable and easy to use in a secure and
cost-effective manner.
The second model, the technology adoption lifecycle model developed by Rogers, enables us to
classify organisations and their attitudes towards adoption of technological innovations into five
idealised types: innovator, early adopter, early majority, late majority and laggard. Moore's
concept of a chasm between early adopter and early majority is useful in highlighting the
differences between the early and mainstream markets. The case study of Amazon has shown it
to be a successful e-business innovator that has played a large part in co-constructing the Internet
and the Web as a place in which to do business.
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Part 2: Setting the standards
Standard: A documented agreement containing technical specifications or other precise criteria
to be used consistently as rules, guidelines, or definitions of characteristics to ensure that
materials, products, processes and services are fit for their purpose.
ASCII (American Standard Code for Information interchange): A standard for computer
encoding those characters that are based on the decimal numeral system and the English/Latin
alphabet.
EBCDIC (Extended Binary Coded Decimal Interchange Code): A standard for character
encoding developed by IBM for use on its mainframe computers.
- The Unicode standard is an attempt to extend the 8 bits used in the ISO 8859-1 character set to
16 bits and to encode all of the world's languages in one single character set. ISO have worked
with Unicode and the resulting standard is known as ISO 10646.
- Key points regarding standards:
 Standards evolve alongside technology and are sometimes replaced when their limitations
become too great.
 Standards are important for data exchange, communication and interoperability.
 Numerous standards organizations, often competing amongst themselves, can be
involved in setting standards for the same technology applications.
 International standard-setting organizations have a wider scope than national ones, but
this scope does not mean that an international standard is always all-encompassing.
Interoperability: The ability of software and/or hardware produced by different manufacturers
to communicate with each other.
OSI (Open Systems Interconnection): A de jure networking standard ratified by ISO in the
1980s, although the OSI seven-layer model was embraced by some governments, it was never
implemented in its entirety.
ITU (International Telecommunications Union): An international standardization organization
for radio, video and telecommunications, formed in 1865.
IETF (Internet Engineering Task Force): An open community whose purpose is to coordinate
the evolution of the Internet through standards processes based upon RFCs.
RFC (request for comments): The name given by the IETF to the documents it publishes, some
of which are Internet standards.
IEEE (Institute of Electrical and Electronic Engineers): A large technical professional
association, formed in 1963 after the merger of two older institutes, that is responsible for the
formation of a range of international technology standards.
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W3C (World Wide Web Consortium): A group established in 1994 by Tim Berners-Lee to
manage and develop standards, known as recommendations, for the Web.
HTTP (Hypertext Transfer Protocol): The lightweight protocol used to communicate requests
between web clients and web servers.
- Classifying Standards:
The first way:
1. Open standard: A standard published for public use and available for third parties to
read and implement without royalties (e.g. ASCII, ISO 8859-1 and Unicode)
2. Closed standard: A standard that is not published for public use and is not available for
third parties to implement without the payment of royalties (Microsoft's Word DOC
document format)
The second way:
1. Sponsored standard (proprietary standard): A standard that is owned and maintained
by a single business organization (e.g. Adobe's PDF document format)
2. Unsponsored standard (or public standard): A standard that is ratified and published
by a standardization organization.
The third way:
1. De facto: Describes a standard that dominates because it is the most popular in practice
rather than because it is prescribed by a standards body (e.g. TCP/IP networking model)
2. De jure: Describes a standard that has been ratified and published by a standardization
body or prescribed in law (e.g. OSI reference model).
- European Union, say that in order to be classed as open, a standard must adhere to the
following principles:
 The standard is adopted and will be maintained by a not-for-profit organization, and its
ongoing development occurs on the basis of an open decision-making procedure
available to all interested parties.
 The standard has been published and the standard specification document is available
either freely or at a nominal charge.
 The intellectual property of (parts of) the standard is made irrevocably available on a
royalty-free basis.
 There are no constraints on the re-use of the standard.
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Others, such as open source evangelist Bruce Perens, go further:
1. Availability: Open standards are available for all to read and implement.
2. Maximize End-User Choice: Open standards create a fair, competitive market for
implementations of standard.
3. No Royalty: Open standards are free for all to implement, with no royalty or fee.
4. No Discrimination: Open standards and the organizations that administer them do not
favour one implementor over another for any reason other than the technical standards
compliance of a vendor’s implementation.
5. Extension or Subset: Implementations of Open standards may be extended, or offered in
subset form.
6. Predatory Practices: Open standards may employ license terms that protect against
subversion of the standard by embrace-and-extend tactics.
Don't confuse open source with open standards, by the way. They refer to two different, but often
related, ideas. The term 'open source' refers to conditions for the software itself rather than any
standards upon which it is built.
open source: A term referring to software that has its source code made publicly available for
user modification.
- There are two more points that I'd like to make before we go on. First, you may be wondering
why anyone would want to create a closed standard. Closed standards have proved successful in
the past in creating vendor lock-in, so that one organization has a monopoly over the provision
of a product or service that uses that standard.
My second point is that open standards do not necessarily preclude vendor lock-in.
vendor lock-in: A situation where a customer is dependent on the products or services of one
vendor because of a lack of (compatible) alternatives or because of the prohibitively high switching
costs involved in moving vendors.
switching costs: The costs associated with moving from one provider of a product or service to
another.
reverse engineering: The process of analyzing the workings of a product for the purpose of
constructing another when access to the original design or source code is not possible.
embrace, extend and extinguish: A three-phase strategy used by businesses in an attempt to
gain a competitive advantage. The strategy involves embracing an open standard, adding
proprietary extensions to that standard, and then using the network effect of these extensions to
extinguish the competition.
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Activity:
Try using the matrix given in Figure 3 to position the following standards:
•
•
•
•
•
PDF file format
DOC file format
HTML
XML
Flash SWF file format.
Answer:
Note that the PDF format is still a sponsored standard owned by Adobe; however, Adobe
promises soon to release the format to a standards organisation.
public domain: A term referring to something that belongs to the public as a whole and is not
subject to copyright law, i.e. it is ‘in the public domain’.
SNA (Systems Network Architecture): A proprietary networking protocol used in IBM
mainframe environments.
- The EU, like many other organisations both large and small, sees open, unsponsored, de jure
standards as the key to interoperability, low switching costs and avoiding vendor lock-in.
Ethernet: A widely used LAN technology.
- Bob Metcalfe, one of the inventors of Ethernet, formulated a 'law' that expresses the
relationship between value and the number of users using the same technology. Metcalfe's law,
which is really a rule of thumb, can be paraphrased as follows:
The value of a telecommunications network (V) is proportional to the
square of the number of users of the system (N2).
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direct network effect: The exponential increase in value of a product that is directly related to
an increase in the number of users using a similar product and communicating via compatible
standards.
indirect network effect: The increase in value of a product as a result of an increase in the
availability of complementary products.
- Indirect network effects are not just about the availability of complementary products. They
can also be in the form of knowledge and skills gained from learning about a technology.
Standards can mean that individuals only invest once in learning about a technology. The
archetypal example here is the QWERTY keyboard layout for UK and US computers.
QWERTY: The de facto standard keyboard layout on English-language computer keyboards, in
which q, w, e, r, t and y are the first six keys on the top row of letters.
Dvorak: An alternative to the QWERTY keyboard layout, named after its inventor August
Dvorak. It aims to improve typing speed and accuracy with an ergonomic arrangement of
characters according to frequency of use, but has not seen widespread adoption.
REST (Representational State Transfer): An architectural style that encompasses the common
web standards such as HTTP, URL, HTML (and XML), etc.
SOAP: A W3C standard that aims to be a lightweight protocol to enable the creation of
distributed applications using heterogeneous software components across the Internet. The
acronym was formerly considered to stand for Simple Object Access Protocol, but this expansion
is now defunct.
Summary
In this part of Block 1 I have given you a glimpse of the bewildering array of available standards.
Classifying them in terms of open or closed, sponsored or unsponsored, de facto or de jure can
help us to make sense of this complexity.
Standards bodies often compete amongst themselves and can set different standards for the same
technologies. Heavy investment of an organisation's resources into an immature standard can
prove to be a costly mistake if the standard fails to cross the chasm. Technology producers,
consumers and governments all have an interest in setting, maintaining and sometimes
extending standards.
Open standards are important in order to maintain vendor neutrality and reduce lock-in. They
promote interoperability and encourage sharing. For developers and consumers they provide a
much-needed stability. An important factor in the diffusion of the Internet and the Web has been
that its foundations are built on open standards.
Standards can be treated as innovations. As such, organisational adoption decisions apply
increasingly to which standard to adopt rather than which technology to adopt.
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Part 3: Factors affecting e-business adoption
Activity:
Each of the following phrases refers to one of the inputs, controls, mechanisms or outputs of
the adoption decision-making framework outlined in Figure 1. Determine which belongs
where by referring back to the figure and its accompanying explanations.
1.
2.
3.
4.
5.
6.
The degree to which an e-business technology or standard is visible.
The role of designing a technical solution to achieve a desired business goal.
Those with whom you do business and with whom you need to be interoperable.
The degree to which an e-business technology or standard is able to be understood.
The cost associated with adoption.
The technical elegance of a standard.
7. The existing ICT skill base within an organization.
Answer:
1. Input  Attributes of e-business technology standards  Observability.
2. Mechanisms  decision makers  Technical Architect.
3.
4. Input  Attributes of e-business technology standards  Complexity.
5. Controls  decision criteria Financial.
6. Controls  decision criteria  Technical.
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CORBA (Common Object Request Broker Architecture): An open standard that uses
heterogeneous software components across a network of heterogeneous computers, such as the
Internet, in order to create distributed applications. Often criticised for being heavyweight and
complex to implement.
DCOM (Distributed Component Object Model): A proprietary Microsoft technology that allows
communication between software components across a network of computers such as the
Internet in order to create distributed applications.
discontinuous innovation: An innovation that requires new socio-technological infrastructures
in order to be successful. This type of innovation requires a significant change in behaviour on
the part of the adopter.
continuous innovation: An innovation that is incremental and takes place within existing sociotechnological infrastructures.
distributed (of computer operations): Spread throughout the business rather than housed in one
location.
centralised (of computer operations): Housed in one location rather than spread throughout the
business. Centralised computer operations were a requirement of mainframe computing.
Summary
Business and technological developments can be seen to have taken place within a framework
of evolving open standards that have encouraged sharing and interoperability.
For those organisations following the innovators, the e-business strategy decisionmaking process
can often be a tortuous one that must take into consideration a variety of inputs, modified by
appropriate controls and mechanisms that will result in outcomes appropriate to the nature of the
business and its environment.
We've explored a framework here that attempts to rationalise the adoption decision for larger
organisations in the early and late majorities, in order to provide a useful tool for breaking down
some of the decision-making complexity.
Smaller organisations, or SMEs, will not necessarily be equipped with all the controls and
mechanisms that larger organisations have developed over time. For innovative, technologyfocused start-up companies, this can mean that they move quickly and will work with and shape
e-business standards in their infancy. Other companies will wait for the standards to cross the
chasm before they commit significant resources to implementing solutions based upon these
standards.
The complete framework, therefore, is most suitable for analysing the adoption decision-making
process for large organisations, but many elements of it can be applied separately in order to
make sense of any organisational adoption decision.
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Part 4: Constructing vocabularies alongside technologies
E-business is the use of Internet and Web technologies in order to carry out an organisation's
internal or external business activities.
E-commerce refers to a wide range of online business activities for products and services. It also
pertains to “any form of business transaction in which the parties interact electronically rather
than by physical exchanges or direct physical contact.”
Summary
The words we use are constructed in much the same way as the technologies that they are
intended to describe. Words are coined and subsequently have their meanings shaped by
literary innovators and early adopters before passing into mainstream usage. There can be much
confusion as different terms meaning similar things jostle for our attention.
I have defined e-commerce as a subset of e-business, with e-business encompassing internal as
well as external deployment of Internet and Web technologies to help conduct an organisation's
business.
When you are communicating your ideas be sure that you are clear about your use of
terminology. Reference the sources that informed your own working definition in order to add
weight to your argument.
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