Chapter 2 : E-commerce Infrastructure

I. Introduction to E-commerce Infrastructure

● Definition: Infrastructure for e-commerce involves technology layers (Internet,
WWW, Mobile) that support online business activities.

● Trends in E-commerce Infrastructure (2020-21):

○ Increase in mobile access as the primary Internet connection.
○ Rise of cloud computing, mobile apps, and IoT (internet of things →
connectivity and data insight) driving new business models.
○ COVID-19’s impact leading to a surge in Internet traffic and bandwidth
consumption.

The hourglass model of the Internet

Is a conceptual framework → illustrating how the internet’s architecture

allows for diverse technologies and applications to interoperate.

Hourglass-shaped → emphasises a narrow “waist” of protocols that unify

various underlying technologies with a broad array of applications and
services at the top.

Layer 1 : TELECOMMUNICATIONS
NETWORKS AND PROTOCOl

physical infrastructure and networking

technologies that carry data, including
ethernet, Wi-Fi etc., may differ in
mediums, protocols and technologies but
share the common goal of transporting
data packets., The diversity of technologies
at this layer is one reason for for the
hourglass shape → multiple network types
feed into a common protocol layer above
them, enabling connectivity across
different hardware and mediums.

Layer 2: TCP AND IP PROTOCOL

Internet Protocol (IP : Standardises how data

packets are addressed, routed, and delivered
across various network technologies) → serves
as a universal protocol that can be used
across any network technology substrate, basically standardising communication
between network types.

IP → enables interoperability by routing packets between different networks, while TCP

adds functionality for reliable or rapid data delivery.

By unifying different physical networks at the lower layer and supporting diverse
applications at the top, this layer serves as the “waist” of the hourglass → linking
everything together.

Layer 3: Provides additional functions and utilities to facilitate communications between applications
for eg: authentication, authorization and data conversion.

The Middleware Services layer is the glue that ties the applications to the communications
networks and includes such services as security, authentication, addresses, and storage
repositories.

This layer includes protocols and standards like HTTP, HTTPS, DNS, and FTP, which define how
data is formatted, encrypted, and transmitted for specific uses.

Layer 4: End user applications

The Applications layer contains client applications such as the Web, e-mail, and audio or video
playback

Each application utilises protocols from the middleware layer to communicate over the internet, eg:
HTTP for web, SMTP for email.

II. The Internet: Key Concepts

● Definition of Internet:

Federal networking council: Internet refers to a global information system that:

- Logically linked together by a globally unique address space based on the IP

or its subsequent extensions/ follow ons.
- Able to support communications using transmission control protocol/Internet
protocol
- Provides, uses or makes accessible, either publicly or privately, high level
services layered on the communications and related infrastructure.

In short: Internet defined as network that:

v Network of Networks

v IP address

v TCP/IP (Transmission Control Protocol/Internet Protocol) v Client/Server computing

architecture

○ A global system of interconnected networks using IP addressing and TCP/IP.

○ “Network of Networks” that supports various services and applications.
Internet Network Architecture
The backbone is a high-
capacity network that forms
the core of the internet. It
consists of large,
interconnected networks that
span across countries and
continents, supporting high-
speed data transfer.

Regional Hubs: MAEs

(Metropolitan Area Exchange)
and NAPS (Network Access
Point)

→ IXPs (Internet exchange

points) : physical
infrastructure points
where different networks
exchange internet traffic.
IXPs help improve
efficiency by reducing the
distance the data packets need to travel.

Domains and ISPs : Domains like nyu.edu represent specific, organizationally controlled
networks

Local ISP (internet service provider): ISPs provide internet access to individual homes
and small businesses via DSL/FIOS/Cable.

Local Area Networks (LAN) and Campus Area Networks (CAN)

Mail Servers:

1. POP3 (Post office protocol 3) : Used to receive emails, allowing users to download
and view messages from their email server
2. and SMTP (simple mail transfer protocol) : Used to send emails from one server
to another

Client Devices: Client IP address: each device is assigned an IP address by the network to
identify it within the internet.

Client devices connect through ISPs or CANs, using IP addresses to communicate with
other devices and services.

Internet service provider (ISPs)

- Provide lowest level of service to individuals, small businesses, some institutions

Types of services

1. Narrowband (Dial up) : standard telephone line to connect to the internet

 2. Broadband : high speed internet access that is always on and faster
- Digital subscriber line
- Cable internet
- T1 and T3 : dedicated lines
- Satellite internet : communication satellites

IV. IP Addressing and Domain Naming System (DNS)

● IPv4 vs. IPv6:

○ IPv4: 32-bit number , limited to ~4 billion addresses for future, four sets of
numbers marked off by periods: 201.61.186.227
○ IPv6: 128-bit, significantly expands address capacity needs., able to handle
up to 1 quadrillion addresses

● Domain Names and URLs:

○ DNS translates numeric IPs into readable domain names (e.g., google.com).

- IP address expressed in natural language

- Domain name system (DNS) : allows numeric IP addresses to be expressed in
natural language

○ URLs: Addresses that identify web resources, incorporating protocol and

domain

- Address used by Web browser to identify location of content on the Web

- Uses the protocol and domain name
- For example: http://www.azimuth-interactive.com/flash_test

III. Network Technology Basics

Packet Switching and TCP/IP:

Packet Switching: Breaking down data into packets sent independently, then
reassembled at the destination.
Transmission control protocol / Internet protocol Layers :

→ A set of rules and standards for data transfer to govern the formatting,
ordering, compressing and error-checking of messages, as well as to specify the
speed of transmission and means by which devices on the network will indicate
they have stopped spending and/or receiving messages .

TCP: Establishes connections among sending and receiving computers and make sure that
the packets sent by one computer are received in the same sequence by the other, without
any packets missing

IP: Provides the internet’s addressing scheme and is responsible for the actual delivery of
the packets.
Network Interface Layer: Responsible for placing packets on and receiving them from the
network medium, which could be a LAN (Ethernet) or Token Ring network, or other network
technology. TCP/IP is independent from any local network technology and can adapt to
changes at the local level.

Internet Layer: Addressing, packaging, and routing messages on the internet

Transport Layer: responsible for providing communications with other protocols within the
TCP/IP protocol suite by acknowledging and sequencing the pacers to and from the
applications.

Application Layer: Variety of protocols used to provide user services or exchange data.
Protocols like HTTP and SMTP for specific tasks.

____________

Extra information:

Architecture and Components:

○ NSPs and ISPs:

■ National Service Providers (AT&T, Verizon) with high-bandwidth
backbones.
 ■ Internet Service Providers providing access to individuals and small
organisations.
○ IXP (Internet Exchange Point):
■ Hubs that connect backbone networks with regional/local networks.

______________

V. Client-Server Computing Model

Powerful personal computers connected in a network with one or more servers.

- A distributed computing model where clients request services from servers.

Extensible - By simply adding servers

and clients, the population of internet
users can grow indefinitely.

Servers perform common functions

for the clients
- Storing files
- Software applications
- Access to printers, and so on

System architecture - Arrangement of software, machinery and tasks in an information

system needed to achieve a specific functionality

Two tier vs Multi tier architecture

Two tier architecture: Consists of two layers: the client and the server. User interface or the
presentation layer. It’s where the user interacts with the system.

Multi-tier architecture: divides the system into more than two layers, Additional separation
enables more complex and scalable applications. Manages the application’s core functions,
rules and processing logic. Acts as a middle layer between the client and the database,
handling requests from the client and retrieving or updating data as needed.
 -

Structure:

○ Servers handle tasks like file storage, application hosting, and Internet
access.
○ The model enhances scalability and fault tolerance, essential for modern web
services.

Cloud Computing
Firms and individuals obtain computing power and SW over internet

- Technical foundation: virtualization by hypervisor

- Service types: IaaS, PaaS, SaaS
- Delivery types: Public, private and hybrid clouds

Benefits:

- Cost reduction in IS development and operations

- Immediate scalability
- Fast is implementation

Risks: Organisations become dependent on outside providers

Amazon Web Services (AWS)

- Computing, storage, DB, networking and content deliver, Analytics, applications,

messaging, deployment and management, mobile, payment, Miscellaneous
CDN and Edge Caching
Content Delivery Network (CDN) : Specialised network like RealNetworks

→ CDN is a specialised network designed to deliver content to users quickly and

efficiently by distributing it across multiple geographically dispersed servers

Edge caching: serving data by the closest located server computer patented by akamai.

- Edge computing pushes applications, data and computing power (services) away
from centralised points to the logical extremes of a network. Edge computing
replicates fragments of information across distributed networks of web servers.

- As a topological paradigm, edge computing is also referred to as mesh computing,

peer-to-peer computing, autonomic (self-healing) computing, grid computing, and
other names implying non- centralised, nodeless availability.

- Edge caching = Cache server = Proxy server

Edge Caching → a method within CDNs where data is stored on servers located
close to the end user. By caching data on edge servers, edge caching allows for
faster content delivery and reduced latency.

Edge computing : Edge computing involves pushing applications, data, and

computing resources away from the centralised data centres to the edges of the
network. In traditional cloud computing, data is centralised but edge computing
distributes computing power across various network locations. → allows for real
time processing, beneficial for applications requiring low latency.

Both together provide the static data (e.g., HTML text) by local server and the dynamic data
(e.g., video) by the DB server in HQ

CONTENT MANAGEMENT SYSTEMS (CMS)

- Separates building the template for content presentation (i.e technical) from the
content creation (I.e non technical) so that it supports management and delivery of
documents without big technical proficiency or expertise. ( e.g., In reports, web pages
and other expressions of employee knowledge)
 - CMS is essentially a database that stories content, with front-end word processing,
and back end page composition templates ( what the reader actually sees on the
web or print page)

- CMS can run on local or cloud servers so multiple people in any location can work on
the same documents in collaborative fashion

- Example: wordpress, drupal, joomla

Web Server Software

Web server software → type of software that serves web content to users by
processing their requests, which are typically made through a web browser.

A user accesses a website → the web server software receives the request
→ locates the requested web pages or resources → delivers them back to
the user’s device.

Apache and Microsoft’s Internet Information Server (IIS) are two leading web server software
options:

Apache
- Leading Web server software (51% of market)
- Works with UNIX, Linux operating systems

Microsoft’s Internet Information Server (IIS)

- Second major Web server software (12% of market)

- Windows-based

____________
Reference pages : Web application server, Merchant server software packages, Open
Source software, Other e-commerce site tools

_______________

VI. The World Wide Web (WWW) and Hypertext

Text formatted with embedded links

- Links connect documents to one another and to other objects such as sound, video
or animation files
- Uses Hypertext Transfer protocol (HTTP) ad URLs to locate resources on the web
-

Markup Languages

- Hypertext markup language (HTML)

1. Fixed set of predefined markup “tags” used to format text

2. Controls look and feed of web pages
3. HTML5 the newest version
4. Advanced features supporting rich, interactive web applications.
5.

- eXtensible Markup Language (XML)

1. Designed to describe data and information

2. Tags used are defined by user
3. Customizable markup language used for data interchange.

Web Browsers : Primary purpose to display Web Pages

Why is IE (Internet Explorer) is popular in Korea?

Active X → a technology developed by Microsoft that allowed web applications to interact
with a user's operating system directly. Enables functionalities crucial for online banking and
e-commerce in Korea, especially with government-mandated security protocols.

Two separate technologies for secure e-commerce:

Digital Certificate: On February 1999, the Digital Signature Act 전자서명법 was
enacted and approved the digital certificate 공인인증서.

v Encryption: Algorithms (e.g., RSA, SEED) and Web encryption (e.g., https running on SSL,
Active-X). Active-X of MS was chosen by the Korean government because the U.S.
government prohibited encryption technology beyond 64 bits and IE used the longest
encryption technology (i.e. 56 bit) then.
Problems of Active-X:

- Incompatible with other browsers

- Too many module programs must be installed (e.g., keyboard encryption module,
etc.)
- Even MS stopped servicing Active-X, and so did the Korean government in 2014.

VII. Mobile Ecosystem

The CPND model: Contents Platform Network Device

 How People Use Mobile Devices

1. TheMulti-Channel/Platforms

- 90% of mobile users use multiple devices to complete action: View ad on TV,
search on smartphone, purchase on tablet
- Consistent branding, Cross-platform design (Responsive design)

2. Increasing use of search

- People, places, things (e.g., Restaurants, deals)

3. Physical retail goods take up 85%of m- commerce sales

4. 85% of smartphone time on Apps (15% on Browser)

- Regularly use 25 apps a month

- 75% of app time spent on the user's top 4 apps.
 ● Mobile Applications:
○ Rise of apps shifting some functions away from traditional web-based
systems.

The internet of things (IOT)

● Internet of Things (IoT):
○ Definition: Network of physical devices connected to the Internet, enhancing
data collection and automation.
○ Application: Smart homes, wearables, and industrial IoT applications.

Objects connected via sensors/RFID to the Internet

- 10-20 BLN IoT devices already installed (2018)

- 100 BLN IoT devices will bring the economic benefits of US$11 trillion by 2025

“Smart things” (TV, house, car, wearable technology, etc.)

- Smart Home: Google Nest (Nest Labs* + Google Home), Apple HomeKit, Cable
companies (Charter Spectrum, Comcast, AT&T)
- Smart Watch: Apple Watch
- Connected car: Google Android Auto, Apple CarPlay
Interoperability issues and standards

- Open source standards: Open Connectivity Foundation (2016) = AllSeen (founded by

Qualcomm, 2013)+Open Interconnect Consortium (founded by Intel, 2014) v
- Engineering standards for industrial assets: Industrial Internet Consortium (founded
by AT&T, Cisco, GE, IBM, and Intel in March 2014)

Security and privacy concerns

- Difficulty in issuing patches to devices

Chapter from the book summary

Chapter 3: E-commerce Infrastructure

3.1 Introduction

● Impact of COVID-19: The pandemic tested the limits of internet infrastructure with
increased demand from remote work and streaming, highlighting disparities in
internet access.

3.2 The Internet: Technology Background

 ● History: Divides into the Innovation Phase (1961–1974), Institutionalization Phase
(1975–1995), and Commercialization Phase (1995–present).
● Key Technologies: Packet-switching, TCP/IP protocols, and client-server computing
underpin modern internet function.

3.3 Current Structure of the Internet

● Backbone and ISPs: The internet backbone is a high-capacity network that

connects ISPs, mobile networks, and corporate networks globally.
● Internet of Things (IoT): Utilizes technologies like RFID, low-cost sensors, and big
data analytics, with IoT applications expanding into smart homes, cities, and health
devices.

3.4 How the Web Works

● Web Protocols: HTTP, URLs, HTML, CSS, and XML form the foundation of web
design and data presentation.
● Web Browsers and Clients: Browsers such as Chrome and Safari display web
content by interpreting HTML, CSS, and JavaScript.

3.5 Cloud Computing

● Types of Cloud Services: Includes Infrastructure as a Service (IaaS), Software as a

Service (SaaS), and Platform as a Service (PaaS).
● Public, Private, and Hybrid Clouds: Cloud models vary in data accessibility and
management, with hybrid models combining private and public cloud benefits for
businesses.

3.6 Mobile Platforms

● Mobile Internet Usage: The mobile platform, primarily accessed through

smartphones and tablets, is now a primary medium for internet and e-commerce.
● Applications: Apps facilitate a wide range of functionalities, from commerce to
entertainment, driving demand for mobile-compatible sites and applications.

3.7 Supporting E-commerce Through Internet Features

● Communication Tools: Includes email, messaging apps, video conferencing, and

telepresence, essential for customer support and interactions.
● Search Engines: Internal and external search engines help customers find products
and services.
● Downloadable and Streaming Media: Enables the delivery of multimedia content
directly to users, facilitating engagement.

3.8 Chapter Review

● Summary: Recaps the evolution of the internet, current infrastructure, and features
of cloud and mobile platforms.
● Key Concepts: Emphasises the structural elements of the internet, web functionality,
and tools supporting e-commerce.