Building a Web-Based Electronic Commerce Application with
by Ann Lynnworth, co-founder, HREF Tools Corp.
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.
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
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
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."
Copyright (c) 1997 HREF Tools Corp. All Rights Reserved.
Permission granted to Borland for use at the 1997 Borland Developer's Conference..