The quick tour: a summary of approaches

RELease 1.0, Jan 24, 1995

Companies that want to create their own electronic commerce infrastructures will be able to use Open Market's servers in various configurations, ranging from a core server (with basic management and reporting tools, as well as optional security and remote-payment capabilities); a more complex merchant server that incorporates the StoreBuilder for companies that want to deploy multiple storefronts; and, eventually, a payment switch to do online settlement and account management.

Open Market will support different payment models, including pay-per-page and subscriptions. It will also offer digital fingerprinting to cut down the unauthorized reproduction of copyrighted material. DEC and Tandem will resell Open Market's system. Open Market's customers include Ipswitch (a TCP/IP solutions provider) and Mead Data Central. Increasingly, Open Market is getting involved in reengineering projects to help companies take advantage of electronic distribution. One such project involves electronic banking services; another involved customized textbooks.

Shikhar Ghosh founded Open Market in 1994 with MIT professor David Gifford, who developed wide-area, agent-based search technology that Open Market has exclusive rights to now. Ghosh was a consultant at the Boston Consulting Group, then became CEO of Appex, which does inter-company payments that account for roaming cellular subscribers and is now part of EDS. The company is funded by private investors and Greylock Management.

NetMarket is developing business-to-business and retail catalog offerings over the Internet. Its very young staff is now linked to one of the largest, savviest marketing organizations: It was bought in November 1994 by CUC International (formerly Comp-U-Card International). CUC already has experience on almost all the major online services as Shopper's Advantage. NetMarket vas the first company to run secure transactions on the Internet, which it did using ViaCrypt's PGP encryption technology. NetMarket plans to offer many back-end services, including state-of-the-art digital production facilities, redundant Internet connections, distributed server hardware and secure facilities, all leveraging CUC's assets of vendor relationships and price guarantees.

Companies that create malls or markets online with servers such as Netscape's are sprouting everywhere. Here's a sample of cyber mall- and market-builders: Branch Information Services, Downtown Anywhere, Internet Business Center, Internet Distribution Services, Internet Shopping Network, Interse and On Ramp. To help their client companies establish presences, these companies consult on Web publishing; help companies collect, reformat and upload their product information; design their link structures and plan strategies for building links across the World Wide Web. Most of them organize their clients into markets within their own service.

Not many of these market builders have committed yet to support the digital cash systems listed here, although their interest is high and some are participating in pilot projects. Some of the ones using Netscape server software may follow that company's strategy; others may switch later on. EDI has attracted far less attention from the market builders than the prospect of digital cash. This is probably due in part to the cost and complexity associated with EDI, and to the nascent stage the industry is at. As transactions begin to occur with more regularity and volume, some of the benefits of integrated EDI systems will become more apparent. However, many aspects of the EDI business will need to change to accommodate the new dynamics of electronic commerce, which we describe in more detail below on page 20.