The Current State of E-Business

Michael B. Spring
Department of Information Science and Telecommunications
School of Information Sciences
University of Pittsburgh



One of the hard parts of any discussion of E-Business is coming to grips with what is being discussed.  There are several definitions of E-Business.  There are different versions of the history.  There are different conceptual tools that might be used to understand it.  Before turning to the pragmatics of assessing the state of E-Business, lets begin by taking a look at three questions:

1.      What do we mean by E-Business?

2.      How do we trace the history?

3.      What are the conceptual perspectives which help to define the state?

What do we mean by E-Business?

Two terms are used when we talk about this topic—electronic commerce or e-commerce and increasingly e-business.  Either of these terms provides a legitimate starting point.  For this paper, e-business has been chosen as the better term.  To understand why, we can begin with a look at the term e-commerce.

The dictionary defines commerce as:

1: social intercourse: interchange of ideas, opinions, and sentiments 2: the exchange or buying and selling of commodities on a large scale involving transportation from place to place.

As expected one definition of commerce has to do with the “the exchange or buying and selling of commodities of goods”.  However, the primary definition has to do with “social intercourse; the interchange of ideas”.  Interestingly, post-industrial societies are increasingly involved in the exchange, buying, and selling of information and ideas bringing these two definitions together.  In line with these definitions, electronic commerce or e-commerce is the electronic exchange of information and the support for the exchange of other commodities.  Some of the e-commerce companies talked about frequently—ebay, etrade, etc.—are engaged in the exchange of information.  If we accept that ebay as an auction house is only involved in the buy and sell decisions, not the exchange of the physical entities, it is a good example of pure e-commerce.  Another prime example would be etrade.  However, for most businesses, some portion of the exchange is physical.  Thus, has a significant commitment to physical storage and shipping, as well as to managing returns. may be viewed as equally divided between e-commerce (the order) and p-commerce (the delivery).  There is every reason to believe that more and more pure e-commerce businesses will blossom in the coming years.  However, this is only a part of the story.

Forms of Ebusiness

In contrast to the term e-commerce, the term electronic business or e-business focuses on the nature of the business.  An e-business may or may not be involved in e-commerce.  The notion here would be that the business itself, the organization, is heavily invested in the electronic realm.  An e-business is an enterprise working via electronic means.  Any number of facets of a business might be carried forth electronically.  Consider as simple examples the following business activities that might be carried forth in electronic form.

·        recruiting of new employees

·        marketing, advertising and public relations

·        customer support and education

·        meetings and information resource sharing among employees

·        training of employees

·        intelligence gathering for strategic and tactical planning

·        distributed inventory control functions

·        payroll and benefits management

It is relatively easy to imagine how any of these activities, if appropriate to a particular business intent, might benefit from instantiation in an electronic form.  They will all have an impact on the bottom line of the business.  Note that none of the activities listed involves the direct buying and/or selling of materials. There are three points here:

1.      An e-business may of course be engaged in pure e-commerce.  The focus on e-business is not meant to suggest that e-commerce is excluded.  Indeed it is likely that e-businesses will be engaged in e-commerce and that e-commerce companies will have a string commitment to being e-businesses.

2.      Not all aspects of a business can, should, or will be electronic.  The point is simply to suggest that a traditional business can be made more efficient by engaging some of its activities electronically.

3.      Some of the most profitable and rapidly growing aspects of e-business are those that involve the streamlining of back office processes to adopt a more efficient electronic form.  Specifically, business to business transactions that enhance supply-chain management, just in time inventory control, and accounts payable and receivable are among the first targets of opportunity for smart business people.

In this context, this paper chooses to focus on e-business.  E-business is concerned with the growth and development of new and existing businesses in the direction of more electronically mediated enterprises.

Understanding E-business

In order to understand e-business it is useful to have a conceptual framework.  This includes understanding the roots, driving forces, and shaping forces behind the phenomenon.

How do we trace the history?

In order to understand the state, we need to understand what’s changing.  Over the last 50 years, computers have been working their way into our lives, both directly and indirectly.  There are three developments in computing that are of paramount importance.  The first is the decision in the 1970s by the Defense Advanced Projects Research Agency to provide funding to connect military research projects across the country.  This DARPAnet effort grew with time into the internet—a system for address and messaging between machines.  This led with time to an increasingly seamless computing environment that can connect every computer and computer enhanced device on the planet.  The second key event was a decision by Peter McCullogh of Xerox to fund research at a new research center in Palo Alto whose goal was discovery of the information architecture of the office.  This effort led to the object oriented windows, icons, mouse, and pointer based systems we use today.  In the process, they also gave birth to object oriented design and programming languages, the Ethernet, the laser printer, the bitmapped screen, WYSIWYG editing, etc. etc. etc.  The third key development was the decision by IBM to enter into the personal computer market and to do so in such a way as to open the standards for their machine to replication by third parties.  This decision ultimately led to a commodity based market for chips and computing systems that became so affordable as to populate our environment at a density far greater than the human population.  It became possible for individuals to own one or more generalized computing devices and dozens, if not hundreds of specialized computing devices.

All the while these changes were taking place, the general population was becoming acclimated to the digitally enhanced world.  The most dramatic forms of this accommodation were those that reached out to the masses.  Paramount among these systems were the Automatic Teller Machines.  It took a decade, but they eventually won over most of the population to digital processing of data.  Point of sale electronic funds transfers of all types also contributed to this transition.  At varying levels we all became comfortable with inventory tracking in the supermarkets as these most efficient early adopters began to track first what went through their stores, and then with coupons printed at the register in response to the items to target marketing, and finally, with ID cards they familiarized us with customer tracking and profiling.  The directory assistance phone systems familiarized us with automatic processing of voice and digital phone response systems familiarized us with tree based triage of customer needs.  Finally, email began to reach out beyond the office workplace to friends and family—initially at other institutions that had email and lastly to home accounts.

Organizationally, workers saw printouts of masses of data maintained in computer systems.  They became intimately familiar with desktop word processing and spreadsheets.  They came to understand the values and limitations of electronic mail and voice mail. They came to see some electronic calendaring.  Most of all, it way clear that pay checks, benefit packages, budget control, and other pieces of the core of business were being handled by computers and these computers first split and appeared on their desktops and then reunited and coalesced into local area networks.  After a period of time, those local area networks coalesced into internetworks and ultimately those internetworks all merged giving us the internetwork with the capital I—the Internet.

These changes were not rapid, and they were not simple.  After years of slow growth and development, the World Wide Web was opened on a connected base(DARPA) of affordable computers(IBM) that most humans had accepted as trustworthy(Supermarkets and Banks) and which most of them could learn to use(XEROX).  Given this environment, the very simple “innovation” called the world wide web caught on like wild fire.  (I put innovation in quotes because the basic concepts of the web—a client server protocol, a hypertext form of organization, and a structured document format for data interchange were 25, 40, and 10 years old respectively at the time they were put forward.)  This is not to diminish in any way the import of what Tim Berners-Lee did at CERN.  As is the case in all revolutionary technologies, both the environment for the technology innovation, and the development of the technology itself are always found to have a longer and deeper history than the critical event that caused the revolution.  Now we are at the millennium.  E-business is here and will play a role in the coming decades reshaping how we do business.  How do we get a handle on what is going on?

Important concepts in E-Business

In any field as rapidly evolving as e-business, it is difficult to understand the myriad announcements and developments that occur every day.  Concepts that transcend the particulars are important tools in understanding what is going on.  Three concepts/principles have proven useful to me in thinking about this topic.  They include:

1.      The migration of atoms to bits

2.      Markets

3.      The “fourth wave”

Each of these is discussed briefly below.  While I have addressed these in a particular order, which has to do with their general importance, any particular concept can become the most important given the focus of the discussion.

Atoms to Bits

This is one of Nicholas Negroponte’s messages in his wonderful little book “Being Digital”.  It echoes ideas put forward a decade earlier by Robert Lucky in Silicon Dreams.  While Lucky articulated the engineer’s vision, Negroponte articulated the organizational or economic impact.  Basically, the message is the following—if your business product is really information (bits) and it is being exchanged physically (atoms) rather than electronically, you will need to migrate to the bit form of exchange because the relative costs of the transactions dramatically favor electronic exchange.  This principle causes us to examine our business carefully to determine if we are indeed using the most appropriate form of exchange.  The cost of a bank transaction over the counter is about $10.00, while the cost of an ATM transaction is about $1.00.  In contrast, the cost of a PC based funds transfer is on the order of $.10.  The economics of bits over atoms compel banks and other engaged in bit businesses to move from atoms to bits.  Publishers of text, music, and video are soon to follow.


Adam Smith proposes a theory of economics that suggests that optimal trading takes place when the buyer and seller have perfect knowledge of the market.  The size of the market is limited by our ability to obtain knowledge about the market using the available technology.  From the bazaars of the mideast to the seaport marketplaces of Amsterdam to the commodities trading floors, markets have expanded to the limits available.  All of these markets were limited by space until the last fifty years.  Today, it is truly possible to imagine a worldwide marketplace where it is possible for the buyer and seller do develop very sophisticated knowledge about their counterpart. The internet has created a globally sized market where the players have an unprecedented opportunity to gain perfect knowledge of the vast market. The World Wide Web has made it possible for each consumer, sans intermediaries, to access the sellers in the market place directly.  If a business has been constrained by its ability to present itself directly in the market place, there will be growing opportunities to by pass intermediaries and sell directly to the end consumer.

The Fourth Wave

Alvin Toffler postulated a theory in “Future Shock” and “The Third Wave” that outlined three massive culture shocks or waves of change.  The first was the transition from hunter gatherer society to an agricultural society where food was cultivated and controlled by human endeavor.  The second wave occurred with the development of industrial society and the mass production of commodities.  The third wave was the technological wave where the computer allowed new levels of customization and individualization in the production of materials.  Some would suggest that we can distinguish a fourth wave in a network centric view of computing that is significantly different from the third wave.  If there is indeed a fourth wave, it will most likely be distinguished by the full integration of the supply chain.  The new model of manufacturing and production ties the consumer intimately into the whole manufacturing process.  Not only are products produced to customer specification, but the customer plays a role in defining the product.  This flop in control of the business process will have a dramatic impact.  It will transform the organization in the sense that marketing disappears and requirements analysis becomes critical.  Instead of “selling” the cars produced by the automaker, the automaker will make the cars buyers want.  Instead of promoting the courses a university offers, the university will offer the courses students want.

When combined with process reengineering concepts, the fourth wave suggests that businesses will need to understand their core business and competency and build processes that are responsive.  For example, it may be the case that a university professional school will define its core competency as producing workers for a given industry.  In this case, understanding who the customer is will suggest that corporations should play a more direct role in defining the product.  In this environment, just as in more accepted supply chain models for commodities, the supplier will be assured consumption of product so long as the product produced conforms to the specifications of the consumer.  In this case, a consortium of employers might guarantee to consume the graduates of an institution.  This means that students would be attracted to an institution because they have an assurance of employment if the meet the core competencies offered in the curriculum.  Just as with other supply chain situations, this does not mean that the supplier, the university, is simply following the mandates of the business consumer.  It is up to the supplier to provide the best information they can provide to the consumer about how they can best meet the consumers need.  Thus, the consumer engages in a dialog with the vendor about the product that is to be produced.

Shaping Forces for e-business

Beyond the driving forces described above, there are five more forces beginning to emerge that will shape the ultimate form of e-business.  They include

4.      Beyond calculation

5.      The information process

6.      Reengineering

7.      Computing on the periphery

8.      Ubiquitous computing


Beyond Calculation

The fiftieth anniversary of computing was celebrated in 1998.  The Association for Computing Machinery published a selection of essays focused on the next fifty years.  The title of the book is a nice double entendre.  It suggests that it is beyond our ability to predict where the next fifty years will take us.  It also suggests, as do many of the authors, that the future will be more about the computer as communication device than as calculation device.  While we will continue to use the computer to relieve us of all the computational tedium it does so well, increasingly, the computer will be used as a communication device both synchronously and asynchronously.  From web browsing to weather reports to driving instructions, the computer is going to establish a major role as a communications device.

Automation and Information

Shoshanna Zuboff, in her book in “The Age of the Smart Machine”, suggests that the computer is doing for intellectual processes what the steam engine and other power technologies did for manual processes.  Power equipment allows us to automate work processes and the formalization of the work process is called automation.  She suggests that the application of the computer, with its memory and logic allows us to formalize knowledge work.  Using a parallel to automation, she calls the process information and suggests that the formalization process might be called informating.  E-business is characterized by informated processes.  Wherever possible, work processes should be examined to determine if a process can be made better, faster, more efficient by the use of computer technology.  In this process, innovators need to be careful not to overspecialize processes as so often happened with the application of power technology.  Information technology has the power to integrate work activities returning control of whole processes to individuals.  For example, it becomes possible to provide a loan officer with the tools that enable a loan to be approved by a single individual using a computer to perform the specialized subtasks.  Thus what has become a disconnected set of subprocesses in many banks, leaving the person applying for a loan with a sense of alienation, can once again be integrated and streamlined.

Reengineering Processes

Through the early 1990’s, there was much attention paid to business process reengineering.  Hammer and Champy in their book “Reengineering the Corporation:  A Manifesto for Business Revolution” promoted the streamlining of business operations.  One way of looking at reengineering from a technical point of view is to see it as adopting practices that are made possible by the deployment of information technology.  In this sense, reengineering provides the business principles that guide what Zuboff called information.  At the core of Hammer and Champy’s approach to process reengineering are several principles.  These include:

·        replacing assembly line type jobs with case work type jobs

·        moving decision making down the chain of command

·        converting management positions from authority control to coaching and training

·        triage of cases into a range of cases characterized by simplicity/complexity

·        reduction of the number of non value added checks and controls

Computing on the periphery

One of the difficulties created by reengineering is a reduction in the richness of the environment within which people work.  Knowledge management has emerged as an effort to overcome the weakness of a pure reengineering approach.  At the same time, computer scientists have been engaged in the development of new kinds of software that are focused on capturing the rich fabric of interaction that takes place in the normal work environment.  We will increasingly interact with the computer on the periphery of our focus.  Rather than demanding our attention, the computer will communicate with us on the periphery of our awareness.  We will sense how the stock market is doing, how are colleagues are feeling, what the traffic patterns are.  It will take some time to develop this new sensibility.

Ubiquitous computing

The late Mark Weisser and others proposed that the next generation of computing would be defined by ubiquitous computing.  In the coming years, devices that are connected to the network and that have an intelligent control component will constitute a kind of invisible computing fabric around us.  These devices will have data acquisition mechanisms and narrowly scoped intelligence that will allow them to work with us.  The key to the next generation device is that they will be special purpose, not general purpose, and they will for the most part have invisible interfaces.  The car is talked about as one of these devices.  Today’s car already has a significant amount of computational power.  Connected to the internet it will be able to deliver information about traffic, lodging, restaurants, etc.  Refrigerator’s will have bar code readers and communications capability to order needed goods.  Thermostats will sense human usage patterns making adjusting the thermostat or setting it unnecessary.  E-business will be busy over the coming decades finding ways to package and sell this just in time information to consumers who will be on the move.

What are the various approaches to E-business?

At a basic level a business may be understood in terms of two goals:

·        reduce the costs in producing the product so as to increase the profit from selling the product or service.

·        increase the number of products sold, increasing the gross profits.

The basic question faced in the development of e-business is how the electronic infrastructure that exists can be used to achieve these two goals.  It is likely that one or more of the following may be true:

1.      the internet provides an information and communications tools that makes it possible to order the goods and services needed by the business so as to reduce excess inventory, insure smooth processes by assuring needed stock, and reducing the transaction costs for materials acquisition.

2.      the internet provides a new channel through which my products may be marketed.  This marketing will either open a new market, allow me to retain an existing market, or improve my relationship with the existing market.

3.      the internet provides an opportunity to restructure my organization in such a way as to reduce the processing costs that support my business.

4.      the internet and the information stores in my organization that have grown historically or that can be developed as a result of 1,2, or 3 above provide an opportunity to develop a new or auxiliary product or service .

E-Business activities can be described any number of ways, but it would seem to make sense to discuss them in three broad categories: activities that pertain to the internal management of an organization, those that pertain to inter organizational activities—wholesale kinds of functions, and activities that pertain to transactions with consumers.  At a conceptual level, each of these categories may be further subdivided as follows:

·        organizational activities

·        information sharing

·        decision support

·        collaboration

·        business to business activities

·        acquisition and disposition of product

·        inventory controls

·        supply chain management

·        business to consumer activities

·        information sharing

·        marketing

·        customer service

·        e-commerce

This presentation of possible impacts places internal communications first and consumer oriented e-commerce last and organizational restructuring first.  The reason for this is simple.  While consumer based e-commerce has garnered a lot of attention in the last year, it is only one of the three primary aspects of e-business.  As many e-commerce start-ups have found, positioning a business on the internet without a sound business operation behind it can lead to a disaster of unfulfilled customer expectations.  Additionally, the resurgence of the American economy over the last few years is more closely associated with the reengineering of the American corporation over the last decade.  The streamlining and restructuring of business in line with the opportunities provided by computer and communications technology is less glamorous than e-commerce, but more profitable from a bottom line business perspective.  Closely associated with restructuring of business to be more e-business oriented in the development of business to business commerce over the electronic pathways.  The most dramatic growth in e-business over the next several years is projected to be in the area of business to business commerce.  Thus, while consumer based e-commerce will grow to be a huge market, it will be the last of these three to have a big impact.  Let me say a word about each of these three areas.

Organizational activities

Consider as simple examples the following E-Business applications that might be carried out in an organizational context.  Many of these are what we frequently refer to as intranet type functions:

·        recruiting of new employees

·        marketing, advertising and public relations

·        customer support and education

·        meetings and information resource sharing among employees

·        training of employees

·        intelligence gathering for strategic and tactical planning

·        distributed inventory control functions

·        payroll and benefits management

It is relatively easy to imagine how any of these areas, if appropriate to a particular business intent, might benefit from presentation in an electronic form.  They will all have an impact on the ability of a company to do E-Commerce, but none of them involves the direct buying and/or selling of materials.

Business to Business Commerce

While the previous section has addressed the internal functioning of an organization making use of the information infrastructure, this section address basic materials control for the organization—the interface to the rest of the corporate world.  We exclude from this process only those activities that relate to final disposition of products to end users.  The functions we focus on here include

·        Purchasing

·        Inventory Control

·        Shipping

·        Sales

·        Marketing

·        Customer Service

Business to Consumer Commerce

Business to consumer commerce has received a lot of attention recently.  Generally speaking, this is most often thought of as building a new channel to deliver products directly to consumers.  Amazon, Ebay, E-trade have all been talked about in this context.  Unlike the previous two categories, which may be built using local or proprietary networks, consumer oriented systems are most often designed to leverage the penetration of the internet and its killer protocol, http.  There are a lot of different ways in which the Web can be used to develop new commercial channels

·        prepare a CRM plan

·        prepare a delivery and return plan

·        prepare a security plan for den. of service attacks and hacker intrusion

·        develop a convenient wallet like payment system

·        build to a peak saturation readiness

·        develop a marketing plan to announce the channel

Planning for E-Business

E-business clearly requires that the technology team be fully informed about the core goals of the business.  Equally important, the management team needs to be fully informed about the capabilities of the technology.  Management needs to understand that e-business, is most often about the use of technology to do old things new ways or to do new things that have never been done before.

In developing E-business opportunities, it is important to recognize that there will be at least four different kinds of projects:

·        infrastructure and organizational development

·        restructuring and integration of network based components

·        new process and market development

·        capitalizing on new opportunities in the knowledge domain

Infrastructure and organizational development

The infrastructure for e-business involves people, technology, and knowledge.  All three legs of the stool are equally important.  The simplest of the three to describe is the technology, and that is based in large part on the network. 

·        Basic local connectivity: intranets and local area networks

·        Broad Area Connectivity: the Internet

·        Universal Connectivity:  the World Wide Web

Much can be done in a business by moving from a paper based communication system to local area networks and shared resources.  The Internet provides broad connectability and transmission reliability.  Any of a number of existing protocols may be used in this environment.  In addition, as new protocols are needed, they can be created. 

Thus, at a first level, the infrastructure involves the kinds of network connections that are made.  In this context, as the network integration increases, it becomes more important to develop safeguards.  So firewalls and security will become important.  As more business takes place in the electronic realm, authentication and encryption become more important.  Finally, as the scope of the connectivity increases, so does the reliance on standard ways of exchanging information.  In some ways, the ultimate form of this integration is reliance on the World Wide Web.  The World Wide Web is attractive as the infrastructure for e-business because it provides and immediate client base.  There is no need to train your customers on how to use specialized software.  It comes with the connection.  Similarly, for many employees, the World Wide Web model of hypertext publishing provides a known model for information sharing that eliminates the need for users to learn and come to understand specialized collaboration software.

It goes without saying, and can generally be assumed that employees within an organization are already comfortable with PC technology.  If not, training and orientation materials are broadly available to bring people up to speed.

Finally, E-business requires that the knowledge base of the organization be converted to an electronic format.

·        Communications systems, calendaring, e-mail and v-mail.

·        Directory services

·        Database systems

·        Document systems

·        Data representation technologies

·        Component management technologies

·        Encryption and Authentication technology

·        “Web” technologies

·        Broadcast technologies(streaming media)

It is critical that the processes that operate within an organization are integrated in such a way as to reduce costs and prepare workers to deal with the second and third stages of e-business development.  Paper based systems have to be moved to electronic form.  Responsibilities for keeping electronic information stores up to date need to be developed.  Care has to be taken in planning for the migration of the information from one form to the next. 

The development of new systems assumes an informed systems analysis, design, and implementation methodology.  Whether it is a traditional waterfall methodology, a rapid prototyping approach or an object-oriented methodology, the process is ultimately guided by an reengineering approach to system design.

Restructuring and integration of network based components

This second kind of e-business project is concerned with interfacing what we assume to be a streamlined organization with business partners.  In is important that this kind of project be built with an understanding on the part of those involved that the goal is to achieve the maximum efficiency of the relationships that reach outside the organization to regular trading partners.  Over the last 25 years material requirements planning (MRP) has evolved to allow more efficient calculation of what materials are needed and when.  Initially MRP failed to consider factors, such as capacity, space, capital, engineering changes, and cost.  More recent models encompass factors such as long range planning, high level resource planning, master scheduling, rough cut capacity planning, detailed capacity planning and shop floor control. One of the most important developments was the addition of the concept of “closing the loop” and feedback. By continuous monitoring of what actually happened versus what was planned, companies could continually improve their processes to achieve more and more efficiency.  With this business process in place, organizations can look for ways to involve suppliers and consumers electronically.  At a simple level, assuming a supplier wants to keep my organization happy and wants to sell product, we can engage an electronically enabled supplier in keeping stock or supplies at an optimal level.  Looked at from the supplier point of view, I want to produce optimally based on what I can see as my consumers needs but avoid over or under producing.  In this environment, an organization is obviously concerned about opening up its internal data stores to outside organizations.  Thus, in design, there is a delicate balancing act between sharing too much and too little data.

Beyond MRP, enabled organizations are looking to the development of a totally integrated enterprise and Enterprise Resource Planning (ERP). ERP looks to provide integrated capabilities for finance, forecasting, sales order processing, sales analysis and local and global distribution, quality control, and powerful reporting and monitoring tools.   ERP extends to include the management of every operation of its value chain in order to minimize the cost and time of getting products to customers. This is usually referred to in the industry as Supply Chain Management or more recently Global supply Chain Management.

New process and market development

The excitement of developing e-business is in projects that seek to develop new processes or markets.  After all, for most of us this is the glamorous arena in which millionaires are made.  These kinds of projects look for that new niche market or new way of doing business that will become the standard for the future.  There are four types of projects here that are worth looking at in more detail:

·        new processes

·        new channels

·        new products, and

·        new markets.

A new process can take any number of forms.  By way of example, consider a set of web pages that provide customer service, or reprints of manual pages. In this case, the business is looking to provide better customer support.  Rather than having customers write or call for service, the website allows customers to search a knowledge base, download patches, or replace missing documentation.

A new channel would endeavor to take an existing product and target market and simply open up a new channel.  Rather than ordering concert tickets by phone, a customer might order the tickets through the web.  This might require a preapproved account, use one of service bureau that provides credit checking and processing for a fee, or a self developed payment acquisition and checking system.

A new product might include some derivative information product that was previously not worth developing.  For example, a bank might provide a currency conversion service.  A software house might provide a new kind of plug-in for browsers.  A symphony might provide pay per listen live broadcasts of concerts.

A new market might include a direct to consumer offering of a product that was previously offered only through retailers.  For example, Avon cosmetics is carefully testing the waters of direct to consumer sales of the same products that have historically only been available through its sales force.

Capitalizing on new opportunities in the knowledge domain

When all the dust clears, it may well be that the most successful businesses in e-business are the support businesses that grow up to support the development of e-business.  Just as stock brokers make money whether investors succeed or fail, so there will be a class of e-businesses that make money whether e-businesses succeed or fail.  There are a dozen or so classes of these businesses, but we will focus on only a few:

·        connection providers—router makers to ISP’s

·        portal managers

·        system integrators—

·        tool developers

There are a large number of organizations that assist directly or indirectly in making the connections between the various players in the e-business environment.  From the routers provided by CISCO systems to web site design firms, internet service providers, there are a number of products and services that enable individuals and organizations to participate in e-business.

Portals were the hot idea in 1998.  A number of organizations were positioning themselves as high profile portals.  Once a portal is established for a given community, the portal owner can charge fees for the prominent display or incorporation of tenants to their portal.  The portal owner becomes a kind of real estate developer or landlord.  Given the popularity of their portal, they can collect a surcharge from those businesses that wish to do business through the portal.

System integrators leverage their experience in working with a variety of clients to enable e-businesses to develop integrated systems at a lower cost than they could in house.  These integrators can be doing simple integration such as making it possible to publish selected database tables and forms to a web site or more complex integration in the form of something like a full supply chain management system.

Finally, a variety of third parties are developing tools to make it easier for organizations to develop e-business applications.  These range from collaboration tools such as Lotus Notes and work flow management systems.  Also included in this category would be firewall tools, intrusion tools, and web site development and management tools.  One area that is growing rapidly on the web today is the sales of model systems by people who have developed them at great cost to others who are attempting similar efforts in other areas.