Internet for e-Business and Commerce

The Internet and the World Wide Web

It’s not uncommon to hear people refer to the ‘Net’ and the ‘Web’ interchangeably. The Internet and the Web are two separate but related things. The Web is in fact simply a part (the fastest growing part) of the Internet as a whole.

The Internet is a massive network of networks, a networking infrastructure. It connects millions of computers together globally, forming a network in which any computer can communicate with any other computer as long as they are both connected to the Internet. Information that travels over the Internet does so via a variety of languages known as protocols.

The World Wide Web, or simply Web, is a way of accessing information over the medium of the Internet. It is an information-sharing model that is built on top of the Internet. The Web uses the HTTP protocol, only one of the languages spoken over the Internet, to transmit data. Web services, which use HTTP to allow applications to communicate in order to exchange business logic, use the Web to share information.

The operation of the Web relies primarily on hypertext as its means of information retrieval. HyperText is a document containing words that connect to other documents. These words are called links and are selectable by the user. A single hypertext document can contain links to many documents. In the context of the Web, words or graphics may serve as links to other documents, images, video, and sound. Links may or may not follow a logical path, as each connection is programmed by the creator of the source document. Overall, the WWW contains a complex virtual web of connections among a vast number of documents, graphics, videos, and sounds.

Producing hypertext for the Web is accomplished by creating documents with a language called HyperText Markup Language, or HTML. With HTML, tags are placed within the text to accomplish document formatting, visual features such as font size, italics and bold, and the creation of hypertext links. Graphics may also be incorporated into an HTML document. HTML is an evolving language, with new tags being added as each upgrade of the language is developed and released.

The Web also utilizes browsers, such as Internet Explorer or Netscape, to access Web documents called Web pages that are linked to each other via hyperlinks. Web documents also contain graphics, sounds, text and video.

If the Internet is a collection of people who are able to access file directories and use e-mail, then the Web is a subset of those people who also run specific software which allows them to create and view multimedia web pages, then jump around from web page-to-web page via a nifty little invention called Hypertext Transfer Protocol, or HTTP. The Web is just one of the ways that information can be disseminated over the Internet. The Internet, not the Web, is also used for e-mail, which relies on SMTP, Usenet news groups, instant messaging and FTP.  There are plenty of situations in which you use the Internet but not the Web—like when you send e-mail, obtain an MP3 using a peer-to-peer program, Internet relay chat, or send an instant message.

So the Web is just a portion of the Internet, albeit a large portion.

What is e-Business?

E-business is a term used to describe businesses run on the Internet, or utilizing Internet technologies to improve the productivity or profitability of a business. In a more general sense, the term may be used to describe any form of electronic business — that is to say, any business which utilizes a computer. This usage is somewhat outdated, however, and in most contexts e-business refers exclusively to Internet businesses.

E-business, or Electronic Business, is the administration of conducting business via the Internet. This would include the buying and selling of goods and services, along with providing technical or customer support through the Internet. e-business is a term often used in conjunction with e-commerce, but includes services in addition to the sale of goods.

The most common implementation of e-business is as an additional, or in some cases primary, storefront. By selling products and services online, an e-business is able to reach a much wider consumer base than any traditional brick-and-mortar store could ever hope for. This function of e-business is referred to as e-commerce, and the terms are occasionally used interchangeably.

An e-business may also use the Internet to acquire wholesale products or supplies for in-house production. This facet of e-business is sometimes referred to as e-procurement, and may offer businesses the opportunity to cut their costs dramatically. Even many e-businesses which operate without an electronic storefront now use e-procurement as a way to better track and manage their purchasing.

In addition to buying and selling products, e-business may also handle other traditional business aspects. The use of electronic chat as a form of technical and customer support is an excellent example of this. An e-business which uses chat to supplement its traditional phone support finds a system which saves incredible amounts of time while providing opportunities unavailable through traditional support. By using virtual computer systems, for example, technical support operators can remotely access a customer’s computer and assist them in correcting a problem. And with the download of a small program, all pertinent information about the hardware and software specifications for a user’s computer may be relayed to the support operator directly, without having to walk a customer through personally collecting the data.

Using email and private websites as a method for dispensing internal memos and white sheets is another use of the Internet by e-business. Rather than producing time-intensive and costly physical copies for each employee, a central server or email list can serve as an efficient method for distributing necessary information.

In the past few years, virtually all the big businesses have become, to some degree or another, an e-business. The pervasiveness of Internet technology, readily available solutions, and the repeatedly demonstrated benefits of electronic technology have made e-business the obvious path. This trend continues with new technologies, such as Internet-enabled cell phones and PDAs, and the trend of e-business saturation will most likely continue for some time.

Rural India context

The success and penetration of e-business will largely depend on the growth of the telecom sector (increase in teledensity and broadband connectivity) in rural India. Although, the present boom in the telecom sector is more urban-based, rural India is expected to gradually catch up. At present there is insufficient connectivity (landline/mobile and internet) in the rural areas combined with lack of electricity or uninterrupted supply of electricity. This makes difficult for rural enterprises to take advantage of e-business.

India (both urban and rural) had one of the world’s lowest levels of basic telephone penetration, or teledensity, in 2005, with just 4.5 main lines per 100 population. Of late mobile-phone use is growing rapidly, and wireless subscriptions have surpassed those of fixed lines. India’s telecommunications sector is rapidly growing; however, most segments of the Indian telecom markets are still in an early stage of growth.  

Over the past decade, there has been substantial progress in liberalizing the service sector, and the impact on the telecoms market performance has been marked. There are still issues with regards to interconnection, a unified licensing regime and third-generation (3G) spectrum, but India has made significant progress in terms of regulatory clarity and authority – and this is good news for e-business.

The government-owned Bharat Sanchar Nigam Limited (BSNL) remains the dominant fixed-communications provider, with a fixed-line market share of close to 90%. Bharti Tele-Ventures, Reliance Infocomm and Tata Teleservices compete with BSNL and have taken market share from the incumbent. On the mobile side, BSNL was a rather late entrant in 2000, but has managed to become a significant competitor over the last few years, as a result of the reach of its network and its low-cost pricing plans. However, Bharti and Reliance have ambitious expansionary plans, which BSNL may find difficult to match. Vodafone, the largest mobile service provider in the world, which has recently acquired Hutch would be another player to watch.

Mobile – the potential e-business tool in rural India

In thousands of small towns and villages across rural India the next stage of the country’s momentous telecommunications revolution will gradually unfold.

Today India is the fastest-growing mobile phone market in the world. The latest figure released by TRAI (Feb 2008) shows that in the last 12 months (Jan 07 – Jan08) more than 83 million subscribers were added to the mobile network. However, if the mobile service providers are to sustain this rate of blistering growth, they must bring mobile phone services to the door-steps of rural households.

Rural India is bogged down with many problems – lack of electricity or erratic power supply is one of the major problems affecting rural India; there is also lack of awareness on the advantages of this modern technology among the people; this is compounded with low purchasing power. These are major challenges that the service providers have to risk.

Even though there are inherent challenges, many of the telecom service providers and consumers are devising ways to work around. For instance in many rural parts of Bihar, eastern Uttar Pradesh, Chhattisgarh and Madhya Pradesh, even though there is no electricity, consumers are getting used to mobile phones to connect to the world to communicate and find market prices for agricultural produce.

The current phenomenon growth of telecommunications in India is in harsh contrast to the stagnation of previous decades. This pace of growth has been facilitated by the New Economic policy of 1991, which ushered in decades of deregulation, privatisation and liberalization. Since then the GoI has also decided to spend atleast 2-3% of its budget on IT expenditure.

Till 2000, the data communications environment in India was governed by colonial-era legislations like the Indian Telegraph Act 1885, which stipulated that, the government is the sole owner and controller of telecommunications and broadcast channels.

Till recently, India had just 3% teledensity with close to half the population hovering around the poverty line. But reforms launched by the government have propelled Internet and mobile penetration to a significant level.

The Internet and the telecom operators will need to focus on making services accessible and affordable for rural customers. Apart from the voice services the operators will have to provide innovative services like mobile banking, secured money transfer and access to other financial services like insurance.

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