Lesson 1

Our brief history of ecommerce begins around 1965 with the mainframe computer. During this time period there existed four types of computational devices.

1. Mainframes: Mainframes are large and powerful computers linking large sets of computers and peripheral devices. In the mid 1960's these devices were as large as ho urses. Today the size has shrunk so that a mainframe is many times more powerful than what was used in the 1960s and can fit into a refrigerator
2. Midrange computers: A medium-sized computer system or server. Midrange computers encompass a very broad range and reside in capacity between high-end PC servers and mainframes. For example, IBM's Power Systems are its midrange line for both business and scientific applications
3. Personal Computers: A personal computer (PC) is a multi-purpose electronic computer whose size, capabilities, and price make it feasible for individual use. PCs are intended to be operated directly by an end user, rather than by a computer expert or technician. Computer time-sharing models that were typically used with larger, more expensive minicomputer and mainframe systems are not used with PCs.
4. LANS/WANs: A local area network (LAN) is a computer network that interconnects computers within a limited area such as a residence, school, laboratory, university campus or office building. By contrast, a wide area network (WAN) not only covers a larger geographic distance, but also generally involves leased telecommunication circuits. An even greater contrast is the Internet, which is a system of globally connected business and personal computers.

• The Popularity of the Internet grows By 1995, information technology looked like a vast ocean of unconnected applications.
  1. Some applications used mainframe and dumb terminals as client/server architectures
  2. Some applications operated exclusively on PC client machines.
  3. Some applications used client/server designs.
  Despite three decades of increasing sophistication in computing architectures, most communities of users might as well have been on different planets. During this time, computer systems typically operated only within their owners's secure boundaries.

From 2001 to 2024, the hardware infrastructure for ecommerce has evolved significantly, driven by advancements in technology, shifting business needs, and the rapid growth of the internet. Here's a breakdown of the key changes during this period:
2001: Early Ecommerce Era

1. Dedicated Physical Servers
   • Ecommerce platforms relied on physical servers hosted on-premises or in data centers.
   • Infrastructure was capital-intensive, requiring businesses to invest in hardware, cooling systems, and backup power.
2. Networking
   • Networks were primarily wired, and broadband adoption was growing.
   • LANs were common in office environments, while WANs were used to connect remote locations and customers.
3. Storage Systems
   • Relied on SAN (Storage Area Networks) and NAS (Network Attached Storage) for handling increasing ecommerce data.
   • Data replication and disaster recovery setups were minimal compared to modern standards.
4. Emerging Virtualization
   • Virtualization was in its infancy, with technologies like VMware beginning to gain traction.
   • Hardware was underutilized because each application often required a dedicated server.

2010: Rise of Cloud Computing

1. Shift to Cloud
   • Cloud providers like Amazon Web Services (AWS), Microsoft Azure, and Google Cloud gained popularity.
   • Businesses moved away from owning physical servers to renting virtual servers and using scalable cloud-based services.
2. Scalability and Redundancy
   • Cloud infrastructure introduced on-demand scalability, essential for ecommerce peaks like Black Friday.
   • Redundant systems became standard, reducing downtime and improving reliability.
3. Content Delivery Networks (CDNs)
   • CDNs like Akamai and Cloudflare became critical to ecommerce, enabling faster page load times by caching content closer to users.
4. Virtualization and Containers
   • Virtual machines (VMs) allowed better resource utilization.
   • Containerization technologies like Docker emerged, enabling lightweight, portable applications.

2020: Era of Edge Computing and AI

1. Edge Computing
   • Data processing moved closer to the end users through edge devices and edge servers, reducing latency.
   • Critical for real-time ecommerce applications like chatbots, recommendation systems, and AR shopping.
2. Advancements in AI Hardware
   • Adoption of AI accelerators (e.g., GPUs, TPUs) for handling ecommerce personalization, inventory management, and predictive analytics.
3. Hyperconverged Infrastructure (HCI)
   • Simplified data center operations by integrating compute, storage, and networking into a single system.
4. Hybrid and Multi-cloud Strategies
   • Businesses began using multiple cloud providers for cost optimization and avoiding vendor lock-in.
   • Hybrid setups combined on-premises systems with cloud services for greater flexibility.

2024: Modern Ecommerce Infrastructure

1. Serverless Computing
   • Platforms like AWS Lambda allow ecommerce applications to run without managing servers.
   • Businesses only pay for the compute time used, optimizing costs.
2. 5G Networks
   • 5G-enabled devices and networks revolutionize ecommerce by supporting faster, more reliable transactions and enhanced mobile experiences.
3. AI and Machine Learning Integration
   • Hardware infrastructure integrates advanced ML models, delivering personalized experiences and real-time decision-making.
   • AI-driven logistics and warehouse management systems enhance supply chain efficiency.
4. Sustainable and Energy-Efficient Infrastructure
   • Growing focus on sustainability led to energy-efficient data centers and the use of renewable energy.
   • Advances in chip design (e.g., ARM processors) reduce power consumption.
5. Quantum Computing
   • Early adoption of quantum computing in niche ecommerce areas like optimization problems and secure transactions.

Summary of Key Changes

• 2001–2010: Transition from physical servers to virtualized environments.
• 2010–2020: Rise of cloud computing, CDNs, and edge technologies.
• 2020–2024: Adoption of serverless computing, AI-driven infrastructure, and sustainable practices.

These advancements have enabled ecommerce to grow rapidly, supporting billions of transactions globally with unprecedented speed, security, and reliability.

Bulletin Board Services enabled small communities of users sharing a specific interest, regardless of geographic location, to dial-in to an application. BBS^[1] allowed users to:

1. Meet virtually
2. Share information
3. Conduct transactions, albeit in an informal fashion

In earlier computing models such as client-server, the processing load for the application was shared between code on the server and code installed on each client locally. In other words, an application had its own pre-compiled client program which served as its user interface and had to be separately installed on a user's personal computer. An upgrade to the server-side code of the application would typically also require an upgrade to the client-side code installed on each user workstation, adding to the support cost and decreasing productivity. In addition, both the client and server components of the application were usually tightly bound to a particular computer architecture and operating system. Porting them to others was often prohibitively expensive for all but the largest applications.

• Web Applications In contrast, web applications use web documents written in a standard format such as HTML and JavaScript, which are supported by a variety of web browsers. Web applications can be considered as a specific variant of client-server software where the client software is downloaded to the client machine when visiting the relevant web page. Client web software updates may happen each time the web page is visited. During the session, the web browser interprets and displays the pages, and acts as the universal client for any web application. In the early days of the Web, each individual web page was delivered to the client as a static document, but the sequence of pages could still provide an interactive experience, as user input was returned from the web form elements embedded in the page markup. However, every significant change to the web page required a round trip back to the server to refresh the entire page. In 1995, Netscape introduced a client-side scripting language called JavaScript allowing programmers to add some dynamic elements to the user interface that ran on the client side. So instead of sending data to the server in order to generate an entire web page, the embedded scripts of the downloaded page can perform various tasks such as input validation.

An early attempt at an inter-organizational transaction system was Electronic data interchange (EDI)^[2] allowed organizations to automate order and payment processing. EDI and BBS were exceptions in a world filled with island-like Web-based applications.

The EDI process requires that business documents be in a standard format. The first instances of EDI relied upon proprietary formats to exchange business documents. Wal-Mart and K-Mart used proprietary formats when they first implemented EDI (Choudhury, 1997). The problem with proprietary standards is that it is difficult to exchange transactions with many trading partners because of all the format conversions. Having standard formats for business documents means that all trading partners can understand the document structure and interpret it correctly.
There are two major sets of standards for EDI: the American National Standards Institute Accredited Standards Committee X12 (ANSI ASC X12, or more usually, X12) standard, and the United Nations Electronic Data Interchange For Administration, Commerce, and Transport (EDIFACT) standard.

Early attempts at on-line applications usually took the form of bulletin board services (BBS). The Internet^[3] was one of many services that fell under the BBS umbrella. Originally, the Internet served governmental and educational communities of interest. However, the audience quickly changed in 1995 as businesses and the general public became aware of the capabilities of the Internet and the World Wide Web^[4].
Web browsers enter the picture
The creation of the commercial Web browser, developed and popularized by Netscape, and the re-purposing of on-line services into Internet on-ramp service providers (also known as ISPs, like AOL) made it possible for any PC with a modem to get onto the Web. At first, the Internet and the Web were viewed as fun and/or useful services for academia, government, and consumers. Little by little, however, corporations began to realize that the architecture of the Internet and the Web could be used to deploy certain types of applications that were difficult or impossible to deploy on existing architectures (like client/server). Organizations and their technology architects began to grasp that a combination of universal networking through TCP/IP^[5] and the graphical user interface (GUI) of the Web offered a compelling architectural platform for a new class of applications.
What type of applications?
Organizations found that the architecture of the Internet was a useful tool for creating and using internal applications. One of the more popular organizational applications was a new kind of intra-organization bulletin board system known as an Intranet^[6].

In the early days of e-Commerce, few applications actually facilitated business transactions. Instead, most first generation ecommerce applications merely provided information about an organization and its products.
There was no way to actually make a purchase. This type of application was often referred to as BrochureWare.
In a sense, the information from organizational Web sites only went one way - out. This type of information flow is often referred to as Web publishing.
As organizations grew more comfortable with the Web paradigm and browsers, development tools, and server-side products became more secure, scalable, and reliable, many companies began to develop applications that accepted interactions with customers and suppliers.
Web publishing was eclipsed by full-featured Web-based applications that involved database access, and even eventually transactional access.
e-Commerce applications grew in terms of mission-criticality and complexity.
Driven by this movement, the tools and technologies required for e-Commerce applications expanded rapidly.
With the growing consumer acceptance of eCommerce and a difficult business environment, brands and businesses are all eyeing the eCommerce opportunity. eCommerce is still in its infancy and if the percentage of total retail is closing in on double digits in some countries, the eCommerce model is still learning its way for the vast majority of us. Taking a look at e-commerce, StrategyeCommerce sites as a percentage of the number of total web sites, eCommerce is still just a small pinpoint. I roughly estimate that there are 2 million eCommerce sites worldwide (500K in North America, 1 million in Europe)

In addition, organizations realized that they could create Web-based applications that reached beyond the boundaries of their organization. Organizations began to use the Web to communicate and conduct transactions electronically with:

1. Consumer customers (Business to Consumer (B2C): Commerce is conducted between a consumer, such as a home user on a PC, and a business. business to consumer or B2C)
2. Business customers and suppliers (Business to business (B2B): An online relationship where one business sells goods or services to another business. For example, the United States Postal Service sells its delivery services to Amazon.com. Thus, the back end ordering system of Amazon.com is connected to the United States Postal Service.

The focus of this course is on the tools and technologies of today's ecommerce world are the subjects of this course.

[1]Bulletin board services: An electronic message database where people can log in, read, and leave messages.

[2] Electronic data interchange (EDI): Transferring data between different companies using networks, such as the Internet.

[3]Internet: A global network connecting millions of computers that are joined through a high-speed backbone of data links

[4]World Wide Web: A system of Internet servers supporting specially formatted documents that support links to other documents, graphics, audio, and video files. The documents are formatted in special language (HTML, DHTML, XML, etc.).

[5]Transmission Control Protocol/Internet Protocol (TCP/IP): A suite of communications protocols used to connect computer systems and transfer data over the Internet.

[6]Intranet: A private Internet reserved for use by people who have been given the authority or passwords. These people are typically employees and often customers of a company.