Application Solution for the Graphic Arts Industry   Table of contents   Indexes   Implementing the Proper Standard
 
 

Electronic Information Commerce
 
Russ   Young
  Director of Commerce Development
  Open Market
Folio Products Group 5072 North 300 West
Provo   Utah  84604  USA
Phone: (801) 229-6541
Fax: (801) 229-6786
Email: ryoung@folio.com Web: http://www.folio.com
 
Biographical notice:
 
Russ Young
 
Russ Young has been a developer at Folio for 6 years, and is currently the Director of Commerce Development. For Folio 4, Russ designed and built the Folio Workbench as well as directed the Folio Builder product team. As the SGML evangelist at Folio, he is an active participant in the SGML community, and serves on the OASIS and GCA technical committees, and the W3C XML working group. Russ graduated magna cum laude from BYU  (Brigham Young University) in 1992 with a BS in Computer Science, and minors in Math and Spanish. He will graduate August 1998 from BYU with his MS in CS, with an emphasis in computer graphics. Russ and his wife Chris have 3 children, Chantel, Sawyer and Ashton. Russ' other hobbies include golf, gardening, stone masonry, and playing the piano.
 
ABSTRACT:
 
Hard goods like books and CD-ROMs are not the only things being sold over the internet anymore. There is now a secure way to sell information over the internet, and this "Information Marketplace" is changing the face of commercial publishing. The internet is providing incredible access to vast amounts of information, the real challenge for users is knowing where to look for the information and then how to access it. The obvious challenge to publishers is how to tap the internet market potential while still finding a way to generate revenue, provide secure transactions and increase advantages over their competition. We will explore both the publisher and user issues involved in electronic information commerce and show examples of working information commerce sites. We will also discuss how information commerce will drive more and more published content to be created, stored and managed in SGML  (Standard Generalized Markup Language) and XML  (eXtensible Markup Language) .
 
 

Purpose
 
To learn about electronic information commerce and discuss opportunities and challenges for commercial publishers and end users.
 
 

Electronic Commerce
electronic commerce
 
Simply defined, means buying and selling products and services over the Internet, and handling the purchase transactions and funds transfers that are needed to support those activities. This table shows some revenue projections for the size of the electronic commerce industry in the next few years.

Revenue Projections
Industry Segment 1996 2000
Infrastructure $9.5 $196
Access $4 $30
Content $0.2 $33
Financial $0.2 $37
Business-to-business $0.6 $23
Retail $0.5 $7
These numbers are in billions of dollars
Source: Forrester Research, Inc
 
 

History
 
Although there has been a tremendous focus lately on electronic commerce, it is not new news for large businesses. EDI  (electronic data interchange) has been around for years helping large organizations exchange business documents. EFT  (electronic funds transfer) has helped banks and other financial institutions make electronic payments. For example, most people have their paycheck deposited automatically in their bank account using EFT . The real difference is that the connections for these systems have been private and protected, and recent developments in electronic commerce are Internet based. This creates a new opportunity for small businesses to compete without having the expense of legacy payment systems. It also creates a new opportunity for consumers to participate directly in the process, a fact that will completely alter the traditional lines of business.
 
 

Commerce Triangle
 
There are traditionally three players in the commerce triangle: the producer, the consumer, and the bank. The producer designs, builds, markets, distributes and supports the product. The consumer identifies a need, researches the products available, finds the product that meets his needs, compares the options available, and purchases the product. The bank checks the credit, and handles the transfer of funds. The media that are involved in these processes include magazines, forms, catalogs, letters, phone, fax and mail. The involvement of and requirement for multiple media increase the cost and overhead of making a sale happen. The excitement with electronic commerce is that everything that supports the transactions can occur on a single medium — the Internet. These include web pages, e-mail, online catalogs, online databases, transaction systems and payment systems.
 
 

Online Communities
online community
 
The place where electronic commerce occurs is known as an electronic, or online store. This store is usually part of a larger community called an . Other names that are used to describe these communities are virtual community, networked community, communities of interest, and the information marketplace. In a nutshell, it is the place where a consumer goes when a need is identified. The place depends on the need, and can include stocks, sports, news, travel, medical, military, etc.
 
 

The member-vendor cycle
 
The real key to electronic communities is that it brings together all the elements that are needed to provide electronic commerce. These include the consumers (also called members), the vendors of hardgoods and softgoods, advertisers, the content, and communications. The key to a successful online community is having loyal members. The members first need a reason to visit a site and then need reasons to stay with the community. Member loyalty is increased by providing a way for them to connect with other members of the community. They want to be able to having customized access to the content by generating a member profile. Communities that allow users to create and share content with other users online can count on retaining those members.
 
The vendors, on the other hand, want to have their products and content available to more consumers. As the size of the community increases, the range and scope of the products offered must also increase, creating more demand for the vendors' products. As the product offerings mature, then more members are attracted to the community and the cycle continues.
 
 

Technology for online communities
 
Technologies that form the supporting infrastructure for online communities include:
  • Network connections using TCP/IP  (transmission control protocol / internet protocol)
  • Access to published content using HTTP  (hypertext transfer protocol) and the WWW  (world-wide web)
  • Transaction and payment systems using SET  (secured electronic transaction)
  • Bulletin board services using USENET
  • Real-time chat groups using IRC  (internet relay chat)
  • Video conferencing
 
 

Electronic Information Commerce
Electronic Information Commerce
 
To this point we have discussed electronic commerce in terms of general products. occurs when the Internet is used to find, filter, deliver, retrieve, secure and sell information. Compare how the Internet and CD-ROM allow for different ways of distributing information.

Media Comparison
Paper CD-ROM Intranet Internet
Central Purpose Distribution Distribution Hosting Communication
Intent Static reference Static reference Static reference Interaction
Timeliness Monthly, Quarterly Monthly, Quarterly Daily Immediate
Commerce Model Subscriptions Subscriptions Subscriptions, Site licenses Transactions
Value-added Portability More content Combined content More interaction
 
 

Publisher Opportunities
 
The biggest opportunity for publishers is that they can provide their users access to up-to-date information. They can also open up new distribution and communication channels, which lead to the generation of additional revenue. A publisher can provide a unified storefront to all of their products whether those products are hardgoods or softgoods. For example, they can sell the books and journals, CD-ROM products, as well as offer the content of those products online. This way the customer services can be integrated for all of the products that are sold. The publishers should take advantage of the new communication channels that are part of the online community. Customers that feel involved in the community will give valuable feedback to the publisher.
 
Depending on their size and resources, publishers can participate in an online community that someone else is hosting or create their own. A CSP  (commerce service provider) can host published content and provide the infrastructure of services that are required for electronic commerce, including the payment and transaction services.
 
By storing the membership databases online, the publisher can customize the content for individual users. Hierarchical membership systems can provide for corporations, departments, and individual users to access the content with varying degrees of access and common accounts for invoicing. As the user interacts with the system, the system learns about the user and can customize the content and delivery for each user. This can also involve e-mail systems that send an e-mail with an embedded digital offer for a product, like having a “Buy Me!” button. The system provides an online transaction service that handles the different types of purchases that a consumer wants to make, including both hardgoods and softgoods. It also handles various payment types, like credit cards, digital cash, digital coupons, and offer digital receipts.
 
 

Intranet Hosting
 
Many publishers face demands from customers for hosting published content on their corporate intranets. The key advantages for the users are the increased bandwidth in accessing the content and the security of being inside the corporate firewall. The content model that is typically used is the subscription model, where a corporation can purchase electronic subscriptions to the content for a specific period of time. These subscriptions can typically be site licences or limited to a specified number of concurrent users. A subscription management system can then be deployed into the intranet to assure the content usage stays within the parameters of the license.
 
The intranet provides a new opportunity for publishers to deliver their content to their users. The difference from a commerce perspective is that instead of paying for every transaction, the users pay once for a subscription. When published content is professional reference information, intranet hosting makes sense. When the content is more consumer oriented, then an internet distribution and commerce model apply.
 
 

Publisher Challenges
 
For every opportunity that is presented to the publisher, several questions arise. The biggest challenge that a publisher faces with information commerce is security:
  • How do I protect my digital assets?
  • How can I control who has what access to what information?
  • How do I authenticate user access?
  • How do I limit copyright infringement?
 
Questions about the financial models:
  • How do I make money when everything on the Internet is free?
  • What information should be given away and what should be sold?
  • Can I support trial periods with free access?
  • How do I avoid cannibalizing other distribution channels?
 
Questions about transaction services:
  • Can I sell content on a subscription basis?
  • Can I sell content with a shopping cart model?
  • Can I support credit and debit payment models?
  • Which payment mechanism should I use?
  • Will it work for a global market?
  • Will it scale to fit my needs?
 
Questions about data conversion and presentation:
  • Which input and output file formats do I support?
  • How should I store my information?
 
Questions about what technologies to use:
  • Which platforms do I need to support?
  • How do integrate with my legacy systems?
  • Which standard should I use?
  • How do I internationalize?
 
Questions about customer service:
  • How do I interact with the consumer at a higher level than just sending a text file?
 
 

End User Opportunities
 
The biggest advantage for users of information commerce systems is having access to up-to-date information. There is a lower barrier to entry for individual users as they can just buy what they need rather than buy an entire volume. Larger collections of information can be searched, the content can be personalized, and the results can be downloaded quickly.
 
 

End User Challenges
 
The new technology also forces users to ask new questions.
 
Questions about access:
  • Where do I go to find the information?
  • How do I find what I really want?
  • Can I search the information before I buy it?
  • How can I pay for only the documents or microdocuments that I want?
 
Questions about security:
  • Do I trust sending my credit card # over the Internet?
  • Do I trust that the content vendor will deliver what I want?
 
Psychological questions:
  • While you can see and touch a CD-ROM, what do you get from the Internet?
 
 

Working Examples
 
 

Financial publishing
 
  • Bankers FYI http://www.bankersfyi.com
 
 

Legal publishing
 
  • Matthew Bender http://www.matthewbender.com
  • Butterworths Australia http://www.butterworths.com.au
 
 

SGML/XML in IC
 
The question needs to be asked: “So what does Information Commerce have to do with SGML and XML?”
 
 

Production
 
A classic publishing error is that a new publishing medium arises which requires a new data format, and the entire production process is changed as a result. For example, many HTML documents are created for web publishing, but the inherent structure of the documents is lost as a result. SGML is well known for its property of reusability. Author the document once and use it for every available distribution medium: paper, CD-ROM, intranet, and Internet.
 
 

Delivery
 
The online value proposition of SGML is that it increases the value of the information being delivered. First of all, the high structure of the information makes intelligent searching possible. Instead of simple Boolean searching common to the Internet, contextual searching is possible. The foo example: Find a part #. Since the formatting of the document is not tied to the document, the information delivery can be customized for every user.
 
 

Commerce
 
The structure of the document also allows for hierarchical purchasing models, which base the price of the content on the types of elements that are being accessed.
 
 

XML
 
XML is flexible in that it can be both a model for the information that is being stored and delivered as well as the protocol for machine to machine communication of the back end transaction systems. The tools for XML provide for simpler content authoring, management, conversion and delivery; in essence, it lowers the barrier to entry into electronic information commerce.
 
 

Conclusion
 
Although Electronic Information Commerce is in its infancy, the Internet provides publishers new opportunities and challenges for generating revenue and empowering users to access real-time information.
 
Bibliography
Ref 1
http://www.openmarket.com
Ref 2
http://commerce.folio.com
Ref 3
“Net Gain”,John Hagel III and Arthur G. Armstrong, Harvard Business School Press, 1997
Ref 4
“Understanding Electronic Commerce”, David Kosiur, Microsoft Press, 1997
Application Solution for the Graphic Arts Industry   Table of contents   Indexes   Implementing the Proper Standard