PDF of this tutorialThe benefits to the service provider of hosting electronic-commerce services include the following:
- hosting revenue for providing connectivity to electronic-commerce services
- enablement revenue for helping clients develop electronic-commerce offerings (Web sites, catalogs, storefronts) for the customer's hosted offering
- advertising revenue for aggregating traffic within hosted offerings
- transaction revenue for enabling on-line commerce
The value to a merchant (the service provider's customer) of an electronic commerce–hosting service is that it enables the merchant to focus on its core business processes, leaving the service provider to manage the Internet access, network management, network security, quality of service, and server management. In this scenario, the home shopper still needs Internet access and an access device, but the service provider could provide any or all of the remaining components on behalf of the merchant.
It is important that the service provider provide a hosting infrastructure that can scale and maintain quality of service as the customers' requirements grow. The electronic-commerce platform chosen by the service provider must support a variety of tasks:
- the creation of a standard environment for storefronts and advertising sites
- the provision of a secure transaction environment
- the extraction and communication of orders
- the authorization of credit and clear payments
- the provision of site activity reports
- the provision of billing systems based on customer activity and advertising
In addition, the service provider's customers will look to it for a variety of enablement services: the creation of tools to build storefronts and advertisements; the documentation of the setup and site-building process; and the staging of the environment preliminary to production of the on-line hosting environment.
The customer, the service provider, or a third party could be responsible for the creation and hosting of the customer's Web site, the creation and hosting of the catalog information, and the provision of systems-integration requirements for various information systems.
The service provider must also consider how it will expand its hosting capabilities to enable its customers to obtain the full value possible from an electronic-commerce environment, including links to customer service, inventory, and billing systems (see Figures 2 and 3).
Figure 2. Hosted Electronic-Commerce Model
Figure 3. Electronic-Commerce Hosting Strategy
