Building a Web-Based Electronic Commerce Application with Delphi

by Ann Lynnworth, co-founder, HREF Tools Corp.

Background

ECommerce, Before the Web

The first attempts at electronic commerce, called Electronic Data Interchange (EDI), were strictly for established relationships between large companies. Traditional EDI occurs over secure, independent value-added networks or direct dedicated links that directly connect customers to suppliers. EDI provides not only the physical connection between business, but also management, translation and messaging services as well. Today, there are over 57,000 EDI enabled businesses conducting electronic transactions. EDI, due primarily to the high communications costs involved, works well only for large scale relationships and has therefore been quite limited.

ECommerce, 1995-1997

By substituting the Internet for the private Value Added Network (VAN), costs can be reduced anywhere from 70% to 90%, according to PaineWebber research. The same solutions that EDI has provided can be extended even to single-user customers in a cost effective way.

The reason that ecommerce is expected to take off so rapidly in the late 90s is because most companies already have existing systems which can be "web-enabled" with minimal re-write.

What the Key Players are Offering

The database vendors are based in two camps as far as their approach to the market. IBM, Oracle and Microsoft have tightly integrated products, while Sybase and Informix are taking a best-of-breed partnership approach. While multi-vendor solutions can be expensive and difficult, they do offer the advantage of far greater flexibility.

An estimated 70% of corporate data resides on IBM mainframes and other mostly proprietary IBM hardware. This leaves IBM uniquely positioned to play a key role in corporation’s entrance into electronic commerce on the web. IBM’s strategy is a complete end-to-end solution using both IBM hardware and software. It offers its own web and merchant servers, tied to its DB2 relational database.
Oracle holds approximately 65% of the Fortune 500 client-server relational database market. Like IBM, Oracle offers a tightly integrated, software only, solution to its customers. Its proprietary web and merchant servers link to Oracle’s Universal Server for real-time transactions and dynamic applications.
Microsoft is meanwhile pulling customers toward the combination of Windows NT, its Internet Information Server (IIS), and SQL Server 6.5. Looking ahead to the year 2000, the Gartner Group projects Windows NT to be the operating system with the largest growth and a market share that is double that of Unix in terms of dollars.
Informix is highlighting the use of the “multi media” data types such as video, audio, spatial data and HTML as they seek to bring the Informix Universal Server to market. They have partnered with Netscape, Gemplus and Hewlett-Packard.
Sybase is third in market share in the RDBMS market (behind Oracle and Informix), and has thus far partnered with Netscape for a web server offering.

Where Delphi Fits In

With Delphi Client-Server, and the link to the AS400, middleware applications are the perfect bridge between the Internet and all these existing database backends. With Windows NT gaining in momentum, the advantages of Delphi will continue to give its users a large competitive advantage.

Using the Web to Make Money

The three ways that sites are earning money over the web today are with advertising, subscriptions and the transactional model. The advertising model derives revenue from the sale of viewable Web page space in the form of banners, similar to ads placed in newspapers and magazines. The subscription model charges users for acces to the Web site content itself, just as magazines and newspapers charge a purchase price. Transactional sites derive revenue from the sale of goods through a Web-based front end, such as an online catalog.

Using the Web to Save Money

The less obvious side of "capitalizing" on the Web is to use it to save money by offering customer service options over the web, directly to customers. Technical support and order tracking are two of the most common operations to be converted from human telephone-based services to online web-based systems. Even small companies and organizations can afford to have 24-hour information available to prospective customers and members.

ECommerce, Looking Ahead

The room for growth in electronic transaction processing is extreme. Direct contact payments in the U.S. at the point of sale totaled in excess of $3.6 trillion in 1995, only 20% of which was conducted with credit or debit cards. According to First Data Corporation, a leading transaction processor, only 3% of the $460 billion supermarket industry is transacted with credit or debit cards. Only 1% of the $300 billion professional services industry is transacted electronically. Less than 12% of the gasoline and service station business is electronic, and less than 1% of the fast food restaurnats have point-of-sale payment readers. Thus anywhere from 88% to 99% of transactions in those markets remain for conversion.

PaineWebber estimates the value of goods and services sold on the Web to be in excess of $6.5 billion by the year 2000, and $1 trillion by 2010. "Much of the required infrastructure is already in place, and current much more is being built. We believe a robust, online retailing environment could quickly become commonplace reality as early as year-end 1997."