Web Technology

Business Impact

As Shikhar Ghosh observed in the March - April 1998 Harvard Business Review, managers can't ignore the impact of the Internet on their business. They must at least try to understand the opportunities, and the risks if their competitors take advantage of those opportunities first. Ghosh outlined four diffent kinds of opportunity:

  1. A direct link to key parties to their business (customers, suppliers, distributors).
  2. Ability to leapfrog a step in the traditional "value chain" -- the chain of businesses between a producer of goods or services and the ultimate consumer. An example offered is the publisher who can now sell directly to readers instead of going through a store.
  3. New products or services.
  4. A means to market dominance, increased market share, or even definition of a new market if use of the Internet by the business in question is not yet well developed.

Ghosh suggested that businesses ask these questions to help guide investment and commitment to Internet technology:

  1. What does it cost me to provide services that a customer could obtain using Internet technology (for instance, certain kinds of technical support, customer service, answering questions, etc.)
  2. Can I use information I already have about customers to make it easier for them to do business with me?
  3. Can I help my customers by making available the experiences of other customers or my staff. (An example is Amazon.com making available book reviews from ordinary readers.)
  4. What advantage will my competitors gain if they provide these capabilities before I do?

Additional considerations are whether to risk taking business away from parts of our existing value chain, whether it may be possible to leverage your existing digital assets (or those of other companies on the Internet), and whether or how to participate in creating structures to attract customers on the Internet for your industry ("customer magnets").

As Ghosh wrote, "It is very simple to set up a Web presence, but quite a difficult thing to create a Web-based business model." Ostinato can help you determine which of these questions are appropriate for your business, and develop a strategy and implementation that looks at your business as a whole. You can contact us from the About Ostinato page.


References:
Ghosh, Shikhar. "Making Business Sense of the Internet". Harvard Business Review, Mar. - Apr. 1998: 126 - 135.

History and Background

The Internet as we know it is the outgrowth of research funded by the Advanced Projects Research Agency (ARPA) that began in the mid 1970s, and took current form around 1979. The Internet as a global facility began in about 1980, as ARPA began converting machines connected to its research networks to use the new the new rules for communicating between computers (protocols). Officially termed the TCP/IP Internet Protocol Suite, these are now commonly referred to as TCP/IP. An internet (lower case) refers to technology that provides a way for different kinds of computers to communicate and cooperate with each other. The internet technology lets computers communicate independently from their actual hardware connections, and lets programmers and users work with the computers with less concern for details of the connections than would otherwise be possible. The Internet (initial capital I) has been variously known as the ARPA/NSF Internet, the TCP/IP Internet, and the global Internet.

By 1986, nearly 20,000 government, academic, and corporate computers were connected over the Internet. By 1987 estimated growth was 15% per month, and by 1994 and estimated 3 million computers were connected. By 1998 the Internet central network (backbone) had approximately 840 times the capacity of the original.

One factor contributing to the huge increase in traffic over the Internet has been the rise in popularity of the World Wide Web. The World Wide Web Initiative began in 1989 by Tim Berners-Lee and his colleagues at the European high-energy physics center (CERN) as an aid to locating research information on computers around the world. In the winter of 1990 the first browsing software appeared, and was released as an internal tool at CERN in 1991. In 1993 the US National Center for Superconducting Applications (NCSA) released a Web browser named MOSAIC, first for the Unix operating system, and later for Apple Macintosh and machines running Microsoft Windows. Within eight months 500 computers (servers) were registered to provide information to World Wide Web browsers; in 1994 the number had grown to 4600. Some estimates suggest that the annual growth rate for Web servers (machines registered to provide information via browsers) is now 3000%.


References:
Comer, Douglas E.. Internetworking with TCP/IP Volume 1, 3rd Edition. Englewood Cliffs, NJ: Prentice Hall, 1995.
Stein, Lincoln D. How to Set Up and Maintain a World Wide Web Site. Reading, MA: Addison Wesley, 1995.

Definitions and Documentation

This section utilizes the The Free On-line Dictionary of Computing, http://foldoc.org, Denis Howe, Editor.