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The future of e-commerce web hosting

By Staff

     One of the promises of the Internet was that it would “level the playing” field: the Internet did not discriminate based on how large an entity you were running and the idea was that small and medium business would be able to compete head to head with their larger counterparts.  The theory was sound, but in the excitement over the possibility, pundits skimmed over the fact that this promise depended on the availability of enabling technologies.

Like what?  Like the integrated business application solutions that were available to bigger companies but not to small and medium business because they were cost-prohibitive.

Large businesses were the first to be able to afford – and therefore benefit - from the mad scramble of companies like Oracle and SAP in their efforts to provide these organizations with online capabilities.  Already high priced applications that were not traditionally available to small and medium business, these first online enablers remained out of reach.  The result?  The playing field remained uneven and the promise unfulfilled.

One of the next things that happened was that the Application Service Provider model moved to the Internet, which made perfect sense.  This model has been around for a long while.  Charter airplanes is a great example.  A company invests in a high price, high value item that many people will use, but few can afford to buy for themselves.  As a consumer you have the choice of buying an airplane of your own, which is not very likely, or leasing time from a charter service which owns the aircraft and is happy to sell you a slice of time.  ASP, (also called Managed Hosting or Managed Application Hosting) vendors invested in large scale enterprise wide applications and then – for a fee typically based on transaction volume – sold services to small and medium business seeking an online presence.

There was also a grass roots effort in web development with smaller companies investing time and money in web develop and programming in order to build their own bespoke solutions.  These types of activities represented a capital, not to mention a time-to-market drain on small to medium business and was as likely to tank a young company as it was to get them what they wanted – an ecommerce web presence.

Even with managed hosting or bespoke solutions, small and medium business often found themselves online but without an integrated solution.  They had a storefront but sales had to be entered into QuickBooks and inventory tracked on a MS Excel spreadsheet.  The less integrated the business support infrastructure, the more time operations consumes and the more room is left for error.  The other issue is that it is much harder – if not downright impossible - to get and analyze information that could be used as input into making a business more profitable.  Not having integration severely limits a company’s ability to automate decision support.

One reason that Enterprise Resource Planning (ERP) solutions are so popular with large companies is that all business functions are integrated.  ERP software is developed so that this integration could be customized to reflect the business rules behind how information and transactions flowed throughout a business operation.  ERPs allowed companies to automatically align their operations with their business goals  Enterprise Resource Planning software usually includes the following business functions:

 

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