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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