1. Chapter 11
Infrastructure for
Electronic Commerce
© Prentice Hall, 2000 1

2. Learning Objectives
Describe the protocols underlying Internet client/server
applications
Compare the functions and structures of Web browsers and
servers
Discuss the security requirements of Internet and e-
commerce applications, and how are these requirements
fulfilled by various hardware and software systems
Describe the functional requirements for online selling and
what are the specialized services and servers that perform
these functions
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3. Learning Objectives (cont.)
Describe the business functions that Web chat can fulfill
and list some of the commercially available systems that
support chat
Understand the ways in which audio, video and other
multimedia content are being delivered over the Internet
and to what business uses this content is being applied
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4. A Network of Networks = Internet
Internet is a network of hundreds of
thousands interconnected networks
Network Service Providers (NSPs)
runs the backbones
Internet Service Providers (ISPs)
provide the delivery subnetworks
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5. Internet Network Architecture
ISP ISP 0
ISP
ISP
NAP
NAP
ISP ISP
NAP
NAP
ISP
ISP
ISP ISP
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6. Internet Protocols
Protocols - A set of rules that determine how two
computers communicate with one another over a network
The protocols embody a series of design principles
Interoperable— the system supports computers and software from
different vendors. For e-commerce this means that the customers or
businesses are not required to buy specific systems in order to conduct
business.
Layered— the collection of Internet protocols work in layers with each
layer building on the layers at lower levels.
Simple— each of the layers in the architecture provides only a few
functions or operations. This means that application programmers are
hidden from the complexities of the underlying hardware.
End-to-End— the Internet is based on “end-to-end” protocols. This
means that the interpretation of the data happens at the application
layer and not at the network layers. It’s much like the post office.
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7. TCP/IP Architecture
Application Layer
FTP, HTTP, Telnet, NNTP
Transport Layer
Transmission User
Control Protocol Datagram Protocol
(TCP) (UDP)
Internet Protocol
(IP)
Network Interface Layer
Physical Layer
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8. TCP/IP
Solves the global internetworking problem
Transmission Control Protocol (TCP)
Ensures that 2 computers can communicate with
one another in a reliable fashion
Internet Protocol (IP)
Formats the packets and assigns addresses
packets are labeled with the addresses of the sending
and receiving computers
1999 version is version 4 (IPv4)
Version 6 (IPv6) has just begun to be adopted
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9. Domain Names
Reference particular computers on the
Internet
Divided into segments separated by periods
For example, in the case of “www.microsoft.com”
“www” is the specific computer
“com” is the top level domain
“microsoft” is the subdomain
Internet Assigned Numbers Authority (IANA)
controls the domain name system
Network Solutions, Inc. (NSI)
issues and administers domain names for most of the
top level domains 9
© Prentice Hall, 2000

10. Internet Client/Server Applications
Application Protocol Purpose
E-mail Simple Mail Transport Protocol (SMTP) Allows the transmission of text
Post Office Protocol version 3 (POP3) messages and binary
Multipurpose Internet Mail Extensions (MIME) attachments across the Internet.
File File Transfer Protocol (TP) Enables files to be
uploaded and downloaded
Transfer
across the Internet.
Chat Internet Relay Chat Protocol (IRC) Provides a way for users to
talk to one another in real-
time over the Internet. The
real-time chat groups are
called channels.
UseNet Network News Transfer Protocol (NNTP) Discussion forums where users
can asynchronously post
Newsgroups
messages and read messages
posted by others.
World Wide Hypertext Transport Protocol (HTTP) Offers access to hypertext
documents, executable
Web (Web) programs, and other
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Internet resources.

11. New World Network: Internet2
Two consortiums are in the process of
constructing the ‘new world network’
The University Corporation for Advanced Internet
Development (UCAID) www.ucaid.edu
Building a leading edge research network called Internet2
Based on a series of interconnected gigapops
• interconnected by the National Science Foundation’s very
high performance Backbone Network (vBNS) infrastructure
Goals of Internet2
• to connect universities so that a 30 volume encyclopedia
could be transmitted in less than second
• to support applications like distance learning, digital
libraries, video teleconferencing, teleimmersion and
collaborative tools, and virtual laboratories
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12. New World Network: Next
Generation Internet
Next Generation Internet (NGI)
Government initiated and sponsored
Started by the Clinton Administration, this initiative includes
government research agencies, such as:
• the Defense Advanced Research Projects Agency (DARPA)
• the Department of Energy
• the National Science Foundation (NSF)
• the National Aeronautics and Space Administration (NASA)
• the National Institute of Standards and Technology
Aim of the NGI
• to support next generation applications like health care,
national security, energy research, biomedical research, and
environmental monitoring
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13. Web-based Client/Server
Web browsers servers need as way to:
Locate each other so they can send requests and
responses back and forth
Communicate with one another
Uniform Resource Locators (URLs)
A new addressing scheme
Ubiquitous, appearing on the web, in print, on
billboards, on TV and anywhere else a company
can advertise
Default syntax - www.Anywhere.Com
Complete syntax - access-method://server-name[:port]/directory/file
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14. Web-based Client/Server (cont.)
Hypertext Transport Protocol (HTTP)
A new protocol
Lightweight, stateless protocol that browsers and
servers use to converse with one another
Statelessness - every request that a browser makes opens a
new connection that is immediately closed after the document is
returned
represents a substantial problem for e-commerce applications
an individual user is likely to have a series of interactions with the
application
MIME (Multipurpose Internet Mail Extension)
describes the contents of the document
in the case of an HTML page the header is “Content-type: text/html”
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15. Web Browsers (1999 Generation)
IE 4.6 suite of components consists of the
browser along with the following tools:
Outlook Express for e-mail reading
FrontPage Express for authoring of HTML Web pages
Net Meeting for collaboration
Netscape Navigator 4.6 suite consists of the
browser plus the following components:
Messenger for e-mail reading
Composer for authoring HTML Web pages
Collabora for news offerings
Calendar for personal and group scheduling
Netcaster for push delivery of Web pages
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16. Web Servers: A Software Program
http daemon in Unix; http service in Windows NT
Functions:
service HTTP requests
provide access control, determining who can access
particular directories or files on the Web server
run scripts and external programs to either add
functionality to the Web documents or provide real-time
access to database and other dynamic data
enable management and administration of both the
server functions and the contents of the Web site
log transactions that the user makes
Distinguished by :
platforms, performance, security, and commerce
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© Prentice Hall, 2000

17. Internet Security
Cornerstones of Security
Authenticity
the sender (either client or server) of a message is who
he, she or it claims to be
Privacy
the contents of a message are secret and only known
to the sender and receiver
Integrity
the contents of a message are not modified
(intentionally or accidentally) during transmission
Non-repudiation
the sender of a message cannot deny that he, she or it
actually sent the message
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18. Encryption
Private Key Encryption (Symmetrical Key Encryption)
Data Encryption Standard (DES) is the most widely used
symmetrical encryption algorithm
Private Key Private Key
Message Ciphered Message
Text Text Text
Encryption Decryption
Sender Receiver
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19. Encryption (cont.)
Public Key Encryption (Asymmetrical Key Encryption)
Public Key of Private Key of
Recipient Recipient
Message Ciphered Message
Text Text Text
Encryption Decryption
Sender Receiver
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20. Encryption (cont.)
Digital Envelope — combination of symmetrical
and public key encryption
Public key of Public key of
Session Key Recipient Recipient Session Key
Digital Envelop
Session Key Session Key
Message Ciphered Message
Text Encryption Text Decryption Text
Sender © Prentice Hall, 2000
Receiver
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21. Encryption (cont.)
Digital Signatures : Authenticity and Non-Denial
Public Key of Private Key of
Recipient Recipient
Message Message
Text Ciphered Text
Text
Signature Encryption Decryption Signature
Sender Private Key Public Key Receiver
of Sender of Sender
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22. Digital Certificates and
Certifying Authorities
Digital Certificates
Verify the holder of a public and private key is
who he, she or it claims to be
Certifying Authorities (CA)
Issue digital certificates
Verify the information and creates a certificate
that contains the applicant’s public key along with
identifying information
Uses their private key to encrypt the certificate
and sends the signed certificate to the applicant
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23. Secure Socket Layer (SSL)
A protocol that operates at the TCP/IP
layer
Encrypts communications between
browsers and servers
Supports a variety of encryption
algorithms and authentication methods
Encrypts credit card numbers that are sent
from a consumer’s browser to a
merchants’ Web site
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24. Secure Electronic Transactions (SET)
A cryptographic protocol to handle the
complete transaction
Provides authentication, confidentiality,
message integrity, and linkage
Supporting features
Cardholder registration Chargebacks
Merchant registration Credits
Purchase requests Credit reversal
Payment authorizations Debit card transactions
Payment capture
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25. Access Control
Password Protection
Passwords are notoriously susceptible to
compromise
Users have a habit of sharing their passwords with
others, writing them down where others can see them,
and choosing passwords that are easily guessed.
Browser transmits the passwords in a form that is
easily intercepted and decoded. By making sure that
even if the passwords are compromised the intruder
only has restricted access to the rest of the network;
which is one of the roles of a firewall.
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26. Firewalls
A network node consisting of both hardware and software
that isolates a private network from a public network
Make sure that even if the passwords are compromised the
intruder only has restricted access to the rest of the network
Two types
Dual-homed gateway
bastion gateway connects a private internal network to
outside Internet
proxies (software programs) run on the gateway server and
pass repackaged packets from one network to the other
Screen-host gateway
screened subnet gateway in which the bastion gateway
offers access to a small segment of the internal network
demilitarized zone is the open subnet
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27. Screened Subnet Firewall
Web Server
Bastion
Host
Router Router Local
Internet Network
Proxies:
FTP, HTTP,
NNTP,
Telnet
© Prentice Hall, 2000 FTP Server 2000
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28. Virtual Private Networks (VPN)
A VPN combines encryption, authentication,
and protocol tunneling to provide secure
transport of private communications over the
public Internet. It’s as if the Internet
becomes part of a larger enterprise wide
area network (WAN). In this way,
transmission costs are drastically reduced
because workers can access enterprise data
by making a local call into an ISP rather than
using a long distance phone call.
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29. Virtual Private Networks (VPN)
(cont.)
Real challenge of a VPN
To ensure the confidentiality and integrity of the data transmitted
over the Internet
Protocol tunneling
Support multi-protocol networking
To encrypt and encapsulate the data being transmitted
Types of protocol — being used to carry out protocol tunneling
protocols are aimed primarily at site-to-site VPNs (e.g. IPV6)
protocols are used to support VPNs that provide employees,
customers, and others with dial-up access via an ISP (e.g.
Microsoft’s Point-to-Point Tunneling Protocol (PPTP))
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30. Selling on the Web
Function Requirements for an Electronic Storefront
Search for, discover, and compare products for purchase
Select a product to be purchased and negotiate or determine
its total price
Place an order for desired products
Have their order confirmed, ensuring that the desired product
is available
Pay for the ordered products (usually through some form of
credit)
Verify their credit and approve their purchase
Have orders processed
Verify that the product has been shipped
Request post-sales support or provide feedback to the seller
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31. Selling on the Web (cont.)
Electronic storefront must contain:
A merchant system or storefront that provides the
merchant’s catalog with products, prices and
promotions
A transaction system for processing orders and
payments and other aspects of the transaction
A payment gateway that routes payments
through existing financial systems primarily for
the purpose of credit card authorization and
settlement
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32. Outsourcing Vs. Insourcing
Insourcing— build and run the electronic storefront inhouse
Large companies wanting:
• to “experiment” with e-commerce without a great investment
• to protect their own internal networks
• to rely on experts to establish their sites
Outsourcing— contract with an outside firm
Smaller or medium sized companies with few IT staff and
smaller budgets
Three types of providers
• Internet Malls— offers cross-selling from one store to
another and provides a common payment structure
• Internet Service Providers— focused on operating a secure
transaction environment; not on store content
• Telecommunication Companies— includes the full range
of e-commerce solutions
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33. Electronic Catalogs and Merchant
Servers
The virtual equivalents of traditional product catalogs
Commonly include:
Templates or wizards for creating a storefront and catalog
pages with pictures describing products for sale
Electronic shopping carts that enable consumers to gather
items of interest until they are ready for checkout
Web-based order forms for making secure purchases
(either through a SSL or a SET)
Database for maintaining product descriptions and pricing,
as well as customer orders
Integration with third party software for calculating taxes
and shipping costs and for handling distribution and
fulfillment © Prentice Hall, 2000 33

34. Electronic Catalogs and Merchant
Servers (cont.)
Store
HTML Pages
3rd Party
Applications
Merchant
Internet Server
Financial
Network
Web Web
Browser Server Database
Catalog
Order
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Merchant Server Architecture
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35. Electronic Catalogs and Merchant
Servers (cont.)
Two of the best known products in this category
iCat Electronic Commerce Suite
Standard edition includes:
• Catalog templates
• Shopping carts • Cross selling
• Product searching • Secure payment processing
Professional edition provides support for:
• High-end databases
• Integration with ISAPI and Netscape's NSAPI
• Options for third-party plug-ins for searching, user tracking,
sale pricing, discounting, etc.
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36. Electronic Catalogs and Merchant
Servers (cont.)
Microsoft’s Site Server Commerce Edition
Features of this product are:
• Commerce Sample Sites providing templates for complete
applications
• Microsoft’s Wallet supporting a variety of digital currencies
• Site Builder Wizard for stores with multi-level departments
• Commerce Server Software Development Kit (SDK) for developing
custom-order processing
• Order processing pipeline for managing orders according to
specified business rules
• Microsoft’s Wallet Software Development Kit (SDK) for supporting
a variety of digital payment schemes
• Promotion and Cross-selling Manager for administering a range of
specialized promotions, discounts,cross-selling opportunities
• Integration with Microsoft’s Web site development (e.g. Visual
InterDev) and administrative tools (e.g. NT Security Support)
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37. Electronic Commerce Suites
Offer merchants greater flexibility, specialization,
customization and integration in supporting
complete front and back-office functionality
Catalog Catalog
Application Database
Customer
Management, Customer
Registration, Database
Profiles, Service Order
Database
Internet Order Capture,
Fulfillment
Completion
Web Systems
Browser Web Payment
Payment
Server Processing
Database
(SET & Purchase
Order) Financial
Network
Open Market E-Commerce Server Architecture37
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38. Open Market (www.openmarket.com)
One of the market leaders in the electronic
commerce software segment
Provides a compete set of end-to-end transaction
services including:
Analysis and Profiling
Demand Generation
Order Management
Fulfillment
Payment
Self-Service
Customer Service
Reporting
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39. Chatting on the Web
Varied uses of the forums and chat groups
Communication Centers
a virtual meeting place where communications can
take place among the participants
Customer Service
offer online support where customers can converse
with help-line staff and receive advice
Community Discussion
provide forums and chat services with a marketing eye
toward developing a community of loyal users,
followers and advocates
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40. Multimedia Delivery
Webcasting— describes Internet-based broadcasting of
audio and video content
Types of Webcasts
Text Streams— Text-only wordcasts and datacasts
• to deliver constant news and stock price updates
Ambient Webcasts— Video content
• is captured from a Webcam and delivered as single-frame
updates that are transmitted at periodic intervals
Streaming Audio— Web equivalent of radio
• to deliver everything from talk radio to sports broadcasts to
music previews to archived music and radio shows
Streaming Video
• to deliver videoconferences where high quality images are not
required and there is not much movement among participants
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41. Webcasting
Works in a straightforward way
Examples of companies offering both Webcast
servers and players
RealNetworks ( www.real.com )
Liquid Audio ( www.liquidaudio.com )
Xingtech with its streamworks technology ( www.xingtech.com )
Apple with its QuickTime system ( quicktime.apple.com )
Microsoft with its Netshow software (
www.microsoft.com/windows/windowsmedia )
Multicasting
stream a Webcast from a central server to other media servers
which are distributed to different locations
when a listener or viewer clicks on a Webcast link they are
automatically routed to the closest server
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42. Bandwidth Requirements for
Streaming Audio and Video
Bandwidth [1 mbps = 1 million kbps]
the speed with which content can be delivered
14.4 kbps to 56 kbps for connecting to the Internet over
the telephone through modems
128 kbps for connecting to the Internet over ISDN
telephone lines
1 - 1.5 mbps for connecting to the Internet over digital
subscriber line (DSL)
10 mbps for downloading over cable wires
To download a standard Web page, say around 400,000 kilobits;
56 kbps modem takes about 7 seconds
Cable modem takes about 0.04 seconds
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43. Internet Telephones
Internet phones
programs that let you talk with other people using the
Internet
the added cost to the end user is at best zero and at
worst a substantially lower total charge than a standard
telephone call
PC-to-PC; PC-to-phone; and phone-to-phone
vendors who dominate the Internet telephone market
space
• VocalTec ( www.vocaltec.com )
• IDT ( www.met2phone.com )
• Delta Three ( www.deltathree.com )
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44. Analyzing Web Visits
Access logs file
Text file, example :
www.somewhere.com - [18/Aug/1998:12:00:00 +0000] “Get /a htm HTTP/1.0” 200 15000
Telling you which pages are most popular, which times
are most popular, which geographical regions make the
most requests, and other interesting tidbits that help site
administrators maintain and refine their sites
Software for analyzing access log files (FREE)
net.Analysis form net.Genesis ( www.netgen.com )
Insight form Accrue ( www.accrue.com )
Web Trends Log Analyzer from Web Trends
Corporation ( www.egsoftware.com ) 44
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45. Managerial Issues
Now or later— the question is no longer “Will” but
“When”
It’s the business issues that count— to succeed, a
business must understand how to meet the needs of their
online customers
In-house or outsource— mainly depends on the
company size
Analyzing the data— automatic record of everyone who
visits your Web site
Security— management takes every precaution to ensure
the security of their sites and their communications with site
visitors
Evolving Web— rapid change of the underlying
standards, protocols and governance
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