The electronic commerce juggernaut.
Gerstner has made it clear he wants and expects IBM to be the global leader in this highly touted marketplace.
In the past few months, IBM has begun staking its claim with a rush of product announcements from a variety of business units. The message: IBM wants to be your one-stop shop for Internet commerce software, hardware, and services.
IBM's position challenges the conventional wisdom, which claims that Internet commerce will be a multivendor solution. And there's no shortage of vendors interested in making that case.
Even Microsoft has refrained from going it alone, teaming up with Hewlett-Packard and countless smaller companies to meet the anticipated demand for all kinds of products and services. Some of the major Internet service providers (ISPs) are also getting into the action as they realize that electronic commerce services are a natural extension to their Web hosting business.
ISPs may simply offer basic services such as credit card authorization, or provide full transaction processing with links to back-end databases, billing, and shipping systems.
Because of the complexities involved, ISPs and user organizations are also turning to third-party clearinghouses and transaction service providers to handle such functions as order fulfillment, product shipping, customer service, and order tracking.
Similarly, electronic commerce promises to change the priorities of network managers as it becomes a more significant part of an organization's strategic game plan. Some companies that today use the Web for marketing bypassed the IT department in creating the site.
That approach doesn't work with electronic commerce.
Networking and other IT professionals are needed to apply Internet technology to existing business processes and to create the critical links to legacy databases and to order entry and customer service applications. There's also the need to develop firewall and other security solutions and to accommodate new ways of communicating internally and with customers and suppliers.
Network managers also will need to set up systems to support new ways of buying and selling goods and services. Most importantly, it will be imperative for network managers to understand where the business is headed so that the systems will be able to satisfy changing customer and supplier needs.
As part of its plan, IBM recently teamed with its Lotus Development unit to unveil a line of Web commerce servers to cover a broad range of user needs. For high-volume services, users can choose between IBM's DB2 Universal Database server and its Transaction series server. Lotus' basic Go server handles the low end. All support IBM's electronic commerce strategy of marrying Web technology with legacy applications and databases.
Big Blue also upgraded its electronic commerce server software this spring. Version 2.0 of its Net.Commerce server uses the Secure Electronic Transaction (SET) data encryption protocol, replacing Secure Sockets Layer (see box). SET is intended to ease concerns about credit-card fraud by allowing the card data to bypass merchants and go directly to financial clearinghouses.
Other enhancements to Version 2.0 include support for Open Database Connectivity (ODBC), enabling retailers to link legacy database information to their Web commerce sites; a virtual sales assistant to help users navigate large catalog sites; and a multi-host capability.
In yet another move, IBM Global Services introduced new Web hosting services to help businesses build a Web presence. With the basic service, a business can establish a Web presence on a shared IBM server for a flat fee of $495 per month. At the high end, IBM provides a dedicated server and customized services geared to Fortune 500 companies. IBM has also upgraded dial-up access to its service to 56 Kb/s using U.S. Robotics' X2 modems.
BUILDING ON EDI STRENGTHS
Microsoft's Internet commerce strategy centers around its Site Server Enterprise Edition, which simplifies the deployment of custom Internet sites for promoting and merchandising goods. It comes bundled with Version 2.0 of Microsoft's Commerce Server to provide the needed Internet commerce functionality.
Microsoft also has announced support for SET to safeguard commerce transactions. Visa and MasterCard are among more than 60 companies reportedly working with Microsoft to flesh out its Internet commerce strategy.
Hewlett-Packard increased its visibility in electronic commerce considerably with its recent $1.15 billion acquisition of VeriFone, a leader in payment processing. HP will now be able to market its commerce server package to the thousands of businesses who use VeriFone's credit card processing and receipt printing products.
HP has also joined forces with Microsoft to create an electronic commerce product suite for the banking community. The package is expected to include HP9000 series servers with VeriFone's software for managing transactions between consumer, merchant and bank, and Microsoft's Set-compliant Wallet software for safeguarding credit card transactions over the Internet.
In another significant joint venture, Netscape Communications has teamed with GE Information Services (GEIS) to create Actra Business Systems, based in Sunnyvale, Calif.
Actra currently markets Netscape's Merchant system and will unveil the jointly developed CrossCommerce package later this year. In addition, Netscape says its next-generation commerce servers will incorporate GEIS' EDI (electronic data interchange) strengths and be tailored for business-to-business transactions.
BEYOND WEB HOSTING
Most ISPs offer their electronic commerce services on either a Unix or Windows NT platform. AT&T's SecureBuy service, for instance, uses Unix workstations from Sun Microsystems with electronic commerce software from Open Market of Cambridge, Mass. In contrast, MCI supports both Unix and Windows NT with Open Market's Transact and Microsoft's Site Server software.
Uunet Technologies of Fairfax, Va., also offers both Unix- and Windows NT-based services with Site Server and Apache Web server.
Aiming at a lower-end market, PSInet of Herndon, Va., offers ECommerce Storefront, a Unix-based turnkey product based on Mercantec's SoftCard, which is cheaper and requires less database integration than Open Market and similar products.
For ISPs wanting to enter the market, LitleNet of Lowell, Mass., hopes to make it easier with a plug-in module for Site Server that provides access to its integrated suite of back-end commerce services. Included in the Direct Commerce OnRamp module are order entry, order management, payment authorization, and fulfillment services.
SET secures Web commerce
Electronic commerce took a giant step forward last year when Visa and MasterCard set aside their differences and agreed on a single standard for secure payments over the Internet.
Previously the two had teamed with other industry leaders to develop competing approaches for protecting the security of electronic payments.
Visa International struck first by publishing its Secure Transaction Technology specification, which it co-developed with Microsoft. Less than a week later, MasterCard responded with its own Secure Electronic Payment Protocol spec, backed by IBM and Netscape Communications.
The possibility of a standards war could have had a chilling effect on electronic commerce, so there was relief when Visa and MasterCard agreed to combine their separate efforts into a new specification called Secure Electronic Transactions (SET).
SET is an open standard for protecting credit and debit card purchases on any type of network, including but not limited to the Internet. It uses public key cryptography from RSA Data Security of Redwood City, Calif., to protect personal and financial informationover the network. SET also employs digital authentication, using "certificates" to ensure that the consumer and merchant are who they claim to be.
SET provides the basic architecture for safeguarding the electronic transactions while remaining consistent with the traditional card payment infrastructure. It calls for software to reside in the cardholder's PC and the merchant's network server, and for technology at the merchant's bank and the certificate authority's location to decrypt the information.
Software vendors are expected to incorporate SET into browsers and merchant servers as soon as is practical. IBM has already included Set-compliance within its Net.Commerce server, and Wells Fargo Bank of San Franscisco has become the first bank to offer SET-compliant certificates. In addition, RSA Data Security has announced SET-compliant Web development tools to simplify the addition of SET-based commerce to Web sites.
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|Title Annotation:||Company Business and Marketing; includes related article on Secure Electronic Transactions, or SET; IBM, Lotus and others develop Web commerce servers, software and services|
|Date:||Sep 1, 1997|
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