E-Commerce

Course Title: E-Commerce

Course Code: CSIT105
Faculty- Vineet Suri
 E-Commerce
• Commerce constitutes the exchange of products and services between businesses, groups and individuals and can be seen as one of the
essential activities of any business
• E-Commerce or Electronic commerce is a process of buying, selling, transferring, or exchanging products, services, and/or information via
electronic networks and computers through which transaction or terms of sale are performed electronically
• Formulating commercial transactions at a site remote from the trading partner and then using electronic communications to execute that
transaction
• It is the use of the Internet, the Web & apps to transact business. More formally, digitally enabled commercial transactions between and
among organizations and individuals
• E-Commerce is enabling or achieving business objectives by using information technology to enhance or transform your business processes
• Commonly known as Electronic Marketing. It consist of buying and selling goods and services over an electronic systems such as the internet
and other computer networks
• Digitally enabled transactions include all transactions enabled by digital technology. Commercial transactions involve the exchange of value
(e.g. money) across organizational or individual boundaries in return for products and services
E-commerce Basic Features
 An exchange of goods or services
 An exchange of payment for those goods/services
 Transactions conducted through digital technology (internet/phone)
• Favorite websites for shopping include those featuring: Event tickets,
Online periodicals subscription, Flowers & gifts, Consumer
electronics, Travel
Why Use E-Commerce
 LOW ENTRY COST
 REDUCES TRANSACTION COSTS
 ACCESS TO THE GLOBAL MARKET
 SECURE MARKET SHARE
GREAT BUSINESS DECISIONS – Jeff Bezos Decides to Sell Books over the Internet
Jeff Bezos owns 41 percent of Amazon and is estimated to be worth over $900 million.
Bezos graduated from Princeton and was the youngest Vice President at Banker’s Trust in New York. Bezos had to make a decision to stay and
receive his 1994 Wall Street bonus or leave and start a business on the Internet.
“I tried to imagine being eighty years old, looking back on my life. I knew that I would hardly regret having missed the 1994 Wall Street bonus.
But having missed being part of the Internet boom – that would have really hurt,” stated Bezos.
The first books ordered through Amazon were dispatched in the fall of 1994 (personally packaged by Bezos and his wife).
Amazon.com is now the biggest bookstore on the planet. It is the exemplar of electronic business.

Brief History of E-Commerce

 1970- E- commerce meant the facilitation of commercial transactions electronically, using technology such as Electronic Data Interchange
(EDI) and Electronic Funds Transfer (EFT), allowing businesses to send commercial documents like purchase orders or invoices electronically

 1980- The growth and acceptance of credit cards. Automated teller machines (ATM). Telephone banking. Airline reservation system

 1990- The Internet commercialized and users flocked to participate in the form of dot-coms, or Internet start-ups. Innovative applications
ranging from online direct sales to e-learning experiences

 2000- Many European and American business companies offered their services through the World Wide Web. Since then, People began to
associate a word “e-commerce”
THE PROCESS OF E-COMMERCE
• A consumer uses Web browser to connect to the home page of a merchant's Web site on the Internet
• The consumer browses the catalog of products featured on the site and selects items to purchase. The selected items are placed in the
electronic equivalent of a shopping cart
• When the consumer is ready to complete the purchase of selected items, it provides a bill-to and ship-to address for purchase & delivery
• When the merchant's Web server receives this information, it computes the total cost of the order-- including tax, shipping, and handling
charges--and then displays the total to the customer
• The customer can now provide payment information, such as a credit card number, and then submit the order
• When the credit card number is validated and the order is completed at the
Commerce Server site, the merchant's site displays a receipt confirming the
customer's purchase
• The Commerce Server site then forwards the order to a Processing Network
for payment processing and fulfillment
The trade cycle
• Conducting a commercial transaction involves the following steps:
 Pre-Sale: Search - finding a supplier & Negotiate – agreeing the terms of trade
 Execution: Order & Delivery
 Settlement: Invoice & Payment
 After-sales, e.g. warrantee and service
DRIVING FORCES OF E-COMMERCE
• Today’s business environment creates pressure on organizations. Environmental factors that create Business Pressures: Market, economical,
societal and technological factors are creating a highly competitive business environment
• These factors change quickly, sometimes in an unpredictable manner & therefore companies need to react frequently in the traditional
actions such as lowering cost & closing unprofitable facilities but also innovative activities such as customizing products, creating new
products or providing superb customer service
 Economic Forces
• One of the most evident benefits of e-commerce is economic efficiency resulting from the reduction in communications costs, low-cost
technological infrastructure, speedier & more economic electronic transactions with suppliers, lower global information sharing &
advertising costs & cheaper customer service alternatives
• Categories of Economic Forces
 Lower marketing costs: marketing on the Internet may be cheaper & can reach a wider crowd than the normal marketing medium
 Lower sales costs: increase in the customer volume do not need an increase in staff as the sales function is housed in the computer & has
virtually unlimited accessibility
 Lower ordering processing cost: online ordering can be automated with checks to ensure that orders are correct before accepting, thus
reducing errors & the cost of correcting them
 New sales opportunities: the website is accessible all the time & reaches the global audience which is not possible with traditional storefront
 Market Forces
• Corporations use e-commerce in marketing & promotion to capture international markets. Internet is used as a medium for enhanced
customer service & support
• It is a lot easier for companies to provide their target consumers with more detailed product & service information using the Internet
• Strong competition between organizations, extremely low labor cost in some countries, frequent & significant changes in markets &
increased power of consumers are the reasons to create market forces
 Technology Forces
• The development of information & communications technology (ICT) is a key factor in the growth of ecommerce. Technological advances in
digitizing content, compression & the promotion of open systems technology have paved the way for the convergence of communication
services into one single platform
• This in turn has made communication more efficient, faster, easier & more economical as the need to set up separate networks for telephone
services, television broadcast, cable television & Internet access is eliminated
• From the standpoint of firms/ businesses & consumers, having only one information provider means lower communications cost
 Societal and environmental forces
• The factors that create societal & environmental forces- Changing nature of workforce, Government deregulations, Shrinking government
subsidies, Increased importance of ethical & legal issues, Increased social responsibility of organizations & Rapid political changes
Advantages of E-Commerce
 Electronic Commerce can increase sales & decrease costs
 No checkout queues
 You can shop anywhere in the world. Easy access 24 hours a day. Reduced price compared to brick and mortar
 Advertising done well on the web can get even a small firm’s promotional message out to potential customers around the world
 Businesses can use electronic commerce to identify new suppliers & business partners
 E-Commerce increases speed & accuracy with which businesses can exchange information reducing costs on both sides of transaction
 E-Commerce provides buyers with a wider range of choices than traditional commerce because buyers can consider many different products
and services from a wider variety of sellers
Disadvantages of E-Commerce
 Some products such as perishable foods & high-cost, unique items such as custom-designed jewelry might be impossible to inspect
adequately from a remote location
 Not everyone is connected to the Internet
 Costs, which are a function of technology, can change dramatically even during short-lived electronic commerce implementation projects
because the technologies are changing so rapidly
 Firms face difficulty of integrating existing databases and transaction processing software designed for traditional commerce into the software
that enables electronic commerce
 Consumers are fearful of sending their credit card numbers over the Internet & having online merchants. Few Consumers are uncomfortable
viewing merchandise on a computer screen rather than in person
E-business
• E-business is conducting business on the Internet, buying & selling, serving customers & collaborating with business partners
• It is a broader use of Internet than e-commerce. It is a way to electronically deliver customized information about organizations, their
products & services, transactions within an organization e.g. employee communications, automated inventory control systems & recruitment
• Electronic business(e-business or internet business) may be defined as the application of information & communication technologies (ICT) in
support of all the activities of business. The term "e-business" was coined by IBM's marketing and Internet teams in 1996
• Electronic business methods enable companies to link their internal & external data processing systems more efficiently & flexibly work more
closely with suppliers & partners. Better satisfy the needs & expectations of their customers
E-business opportunities
o Reach- Over 1 billion users globally & Connect to millions of products
o Richness- Detailed product information on 20 billion + pages indexed by Google. Blogs, videos, feeds & Personalized messages for users
o Affiliation- Partnerships are key in the networked economy
E-business Model
• When organizations go online, they have to decide which
e-business models best suit their goals-
 E-shops
 E-commerce
 E-procurement
 E-auctions
 Virtual Communities
 Collaboration Platforms
 Third-party Marketplaces
 Value-chain Service Providers(3PL, Electronic payment)
 Information Brokerage
 Telecommunication
 Customer relationship
The four main areas where companies conduct business online
 Direct Marketing, Selling, & Services using the Internet to contact
customers directly
• Key to success:
 Marketing – create site visibility & demand
 Sales – allow personalized content & adaptive selling processes, integrate
with back-office
 Services – automate customer service features such as customer feedback,
customer inquires, tracking information & customized services
 Financial and Information Services
 Online banking- Paying bills, Making transfers between accounts, Trading
stocks, bonds & mutual funds
 Online billing- Internet-based bill delivery services saves money
 Maintenance, Repair, & Operations (MRO)
 The Internet can transform corporate purchasing from a labor & paperwork
inten­sive process into a self-service application
 MRO goods include – office suppliers, office equipment, furniture,
computers & replacement parts
 Intermediaries
 Content providers- Companies that use internet to distribute copyrighted
content including news, music, games, books, movies, etc.
 Online brokers- Intermediaries between buyers & sellers of goods & services
 Portals- Central hubs for online contents e.g. Google, Yahoo & MSN
 Market makers- That aggregate three services for market participants- A
place to trade, rules to govern trading and an infrastructure to support
trading e.g. Amazon.com, ebay
IMPORTANCE OF THE E-BUSINESS MODEL
• E-business model is an approach to conduct electronic business on the Internet by which a company can become profitable
• E-business models aim to use & leverage the unique qualities of the Internet & the Web to conduct business
• Exchanges occur between two major entities: Businesses & Consumer
• Building a Web site does not mean that customers will come. Traditional means of customer acquisition such as advertising, promotions, and
public relations are just as important with a Web site. Once customers are attracted, a Web site must create a “buzz”
EVOLUTION OF E-BUSINESS
• Individuals & organizations have embraced Internet technologies to enhance productivity, maximize convenience & improve communications
globally
• To develop an e-business, we require developing the entire technology infrastructure, its own business & marketing strategies along with
integrating technologies & services
• E-Business Economy- A growing number of businesses are using the Internet to: Streamline business processes, Procure materials, Sell
products, Automate customer service & Create new revenue streams
Example- BarnesandNoble.com created a digital mirror of its brick-and-mortar bookstore minus the coffee shop
• The Internet will create a digital reflection of the economy. General Motors is bringing to the Web its response to AutobyTel.com and
Carpoint.com by allowing consumers to go online to configure and price vehicles
• The Internet is a powerful channel that presents new opportunities for an organization to Touch customers, Enrich products and services with
information & Reduce costs
CHALLENGES OF THE E-BUSINESS MODELS
Three primary challenges include:
 Security concerns- 60% of Internet users consider the Internet unsafe
 Taxation- Internet remains free of traditional forms of taxation
 Consumer protection- Unsolicited goods & communications, Illegal or harmful goods, services, and content, Insufficient information about
goods or their suppliers, Invasion of privacy & Cyber fraud
Frame work of E-commerce
 Infrastructure- Common business services infrastructure, Messaging and information distribution, multimedia content and network
publishing, N/w infrastructure & Interfacing infrastructure
 Policy Making
Support Areas
 Applications
TYPES OF E-COMMERCE
 BUSINESS-TO-BUSINESS (B2B)
• B2B stands for Business to Business. Businesses make online transactions with other businesses. It consists of largest form of Ecommerce
• This model defines that Buyer and seller are two different entities. It is similar to manufacturer issuing goods to the retailer or wholesaler.
E.g. Dell deals computers and other associated accessories online but it does not make up all those products. So, in order to deal with those
products, first step is to purchase them from unlike businesses i.e. the producers of those products
• E-procurement – the B2B purchase and sale of supplies and services over the Internet
• Systematic sourcing – involves buying through pre negotiated contracts with qualified suppliers
• Spot sourcing – businesses buying transaction-oriented commodity-like products & rarely involving a long-term or ongoing relationship
between buyers and sellers
• B2B exchanges are new organizational forms in digital space that can take place in the following-
 Buyer Model(few buyers, many sellers)- Reverse auction- the winning bid is the lowest, rather than the highest
 Seller model(few sellers, many buyers)- appropriate when the supplier hosts value-added services on its Web site such as suppliers’ product
catalog and customers’ order information
 Longer term relationship model(few buyers, few sellers)- items requiring a high degree of
planning between buyers and sellers either in the design stage or in fulfillment
 Marketplace model (many buyers, many sellers- allows a virtually infinite number of
businesses to transact electronically with minimal cost
Business-to-Business (B2B) Advantages
 Managing inventory more efficiently
 Adjusting more quickly to customer demand
 Getting products to market faster
 Obtaining lower prices on supplies
 Most of the early B2B procurements established tight links to a company’s existing
suppliers. They used their existing business practices & trading partners but lowered costs
through automation. The savings resulted from dramatically reducing the costs
 BUSINESS-TO-CONSUMER (B2C)
• It is the model taking businesses & consumers interaction. The basic concept of this model is to sell the product online to the consumers
• B2C is the direct trade between the company and consumers. It provides direct selling through online
• Online transactions are made between businesses and individual consumers e.g. Amazon.com, Dell
• B2C commerce includes purchases of retail goods, online banking, health information, real estate sites, online auctions, travel services &
online content e.g. if you want to sell goods & services to customer so that anybody can purchase any products directly from supplier’s
website

B2B and B2C characteristics

 BUSINESS-TO-EMPLOYEE (B2E)
• Business-to-employee (B2E) electronic commerce uses an intra business network which allows companies to provide products and/or
services to their employees. Typically, companies use B2E networks to automate employee-related corporate processes
 Social ecommerce
• Social ecommerce is e-commerce that is enabled by social networks & online social relationships. It is sometimes also referred to as
Facebook commerce, but in actuality is a much larger phenomenon that extends beyond just Facebook
 Consumer to Consumer (C2C)
• It applies to sites primarily offering goods & services to assist consumers interacting with each other over the Internet. There are many sites
offering free classifieds, auctions & forums where individuals can buy & sell thanks to online payment systems like PayPal where people can
send and receive money online with ease
• eBay's auction service is a great example of where person-to-person transactions take place everyday
 Consumer-to-Business (C2B)
• Consumer-to-business (C2B) – applies to any consumer that sells a product or service to a business over the Internet
• C2B facilitates the following:
 Social interaction
 Customer reviews, sharing as an Influencer
 Personal finance management
 Purchasing products and information
  Business-to-business-to-consumer (B2B2C)
• e-commerce model in which a business provides some
product or service to a client business that maintains its own
customers
 M-COMMERCE
• Mobile commerce (m-commerce) – the ability to purchase
goods & services through a wireless Internet-enabled device
• The emerging technology behind m-commerce is mobile
devices equipped with Web-ready micro-browsers
 Location based commerce
• Location-based commerce (l-commerce): m-commerce
transactions targeted to individuals in specific locations,
at specific times
 Intra-business EC
• e-commerce category that includes all internal organizational activities that involve the exchange of goods, services, or information among
various units and individuals in an organization
 Collaborative commerce (c-commerce)
• e-commerce model in which individuals or groups communicate or collaborate online
 e-learning
• Online delivery of information for purposes of training or education
 exchange-to-exchange (E2E)
• e-commerce model in which electronic exchanges formally connect to one another the purpose of exchanging information

Exercise- Compile a list of several examples of each type of e-business model

 E-Channels, E-Portals & E-Government
 e-channel – Web-based business channel
 e-portal – a single gateway through which to gain access to all the information, systems & processes used by stakeholders of an organization
 e-government- e-commerce model in which a government entity buys or provides goods, services, or information to businesses or individual
citizens. Use of strategies & technologies to transform government(s) by improving the delivery of services & enhancing the quality of
interaction between the citizen-consumer within all branches of government(s)
Specific e-business models as they relate to e-government
 Consumer-to-government (C2G) – areas where a consumer (or citizen) interacts with Government- Payment of Electricity bill, Taxes to Govt.
 Government-to-business (G2B) – includes all government interaction with business enterprises- Government Procurement, Auctions/Tenders
 Government-to-consumer (G2C) – governments dealing with consumers/citizens electronically- Aadhar, Voter, e-Passport,
 Government-to-government (G2G) – governments dealing with governments electronically- Foreign & Two departments/states
THE EVOLUTION OF THE E-MARKETPLACE
• Electronic marketplace represent a new wave in e-business
• Electronic marketplace (e-marketplaces) – interactive business communities providing a central market space where multiple buyers and
sellers can engage in e-business activities
• As e-business becomes more central to the operations of core companies, diverse marketplaces are arising in every industry
• Most of the early movers have been small, aggressive dot-coms seeking first-mover advantages that they hope result in market dominance
For example: Microsoft’s Small Business Center positions itself as the online partner for the more than seven million small businesses across
the United States
Current Trends: E-Marketplaces
 Horizontal marketplaces – connect buyers and sellers across many industries, primarily by simplifying the purchasing process
 Vertical marketplaces – provide products that are specific to trading partners in a given industry
Structure of Business Models
1. Revenue model: description of how the company or an EC project will earn revenue
 Sales
 Transaction fees
 Subscription fees
 Advertising
 Affiliate fees(commission)
2. Value proposition: The benefits a company can derive from using EC
 search and transaction
 cost efficiency
 Complementarities
 lock-in
 Novelty
 aggregation and inter-firm collaboration
Business Models in EC
• Business models can be independent or they can be combined amongst themselves or with traditional business models
1. Online direct marketing
2. Electronic tendering systems
3. tendering (reverse auction): model in which a buyer requests would-be sellers to submit bids, and the lowest bidder wins
4. Name your own price: where a buyer sets the price he or she is willing to pay & invites sellers to supply the good or service at that price
5. Affiliate marketing: an arrangement whereby a marketing partner (a business, an organization, or even an individual) refers consumers to
the selling company’s Web site
6. Viral marketing: word-of-mouth marketing in which customers promote a product or service to friends or other people
7.  Group purchasing: quantity purchasing that enables groups of purchasers to obtain a discount price on the products purchased
9. Online auctions
10. Product and service customization: creation of a product or service according to the buyer’s specifications
11. Bartering
 Internet Architecture and ISPs
Servers
• Servers are large data storage and processing devices that exist either as hardware or as virtual storehouses located on the internet.
Computers or software systems act as servers that connect to a network
• Servers act as data processors for professional and private use
• A server can be any type of device that shares and saves information. Servers can both store and process information within their own
system or request it from another
• Servers began as small devices that simply transferred data to a more functional computer then grew in size and ability to perform more
complex functions. Now, virtual servers exist within cloud computing platforms that are housed on the internet
• Servers work in several ways to connect users to different data functions. They house large amounts of data for organizations & make it
accessible to users through internal networks or via the internet. They respond to user requests to retrieve appropriate files from stored or
interconnected data sources. They also work in tandem with an operating system to better listen to & respond to user requests
• IT professionals can increase the functionality of a server by installing software that creates additional roles such as responding to website
requests from an internet browser. Servers can also act as safeguards to verify the identity of users before allowing access to a network
Types of servers
The following is a list of all the main types of servers:
1. Web server
• An open-source web server is used for accessing the world wide web through public domain software. These servers connect stored
information from an internet website to your own computer
• Web servers store information for the internet that is retrieved via "HTTP" code and sent to your web browser. This is one of the most
widely used types of servers
2. Proxy server
• Proxy servers act as a bridge between a host server & a client server. A proxy sends data from a website to your computer IP address after it
passes through the proxy's server. This practice adds a layer of security since the information is requested then transferred from the source
to the proxy server & never directly from a client to another user
• A proxy server can filter out various harmful internet entities
3. Virtual machine (VM)
• Virtual machines store & connect data strictly through virtual space. To create a virtual machine, IT teams use a virtual machine monitor
(VMM), which is software that can run thousands of virtual machines through only one piece of physical hardware
• This method of server virtualization is widely used for data transfer & storage because they are the most cost-effective type of server to run
4. File transfer protocol (FTP) server
• FTP servers are used to relocate files from one computer to another. Uploaded files move from your computer to the server while
downloaded files are extracted from the server onto your device
• File transfer protocol also refers to the method of using a server to connect one computer to another in order to share data safely
5. Application server
• These servers connect clients to software applications through virtual server connections. This allows users to bypass downloading data to
their own hardware in order to access applications
• Application servers can effectively host large amounts of application data to many users at once, making them ideal for businesses
6. File server
• A file server stores data files for multiple users. They allow for faster data retrieval & saving or writing files to a computer
• This is a basic type of server used commonly by organizations where lots of users need access to files that are more conveniently & safely
stored on a server than a personal computer
7. Database server
• Database servers function as large storage spaces that organizations use & access to run multiple programs to meet their needs
• A database server can run independently of any database architecture
8. Mail server
• A mail server stores & delivers mail for clients through email service platforms. Because mail servers are set up to continually connect to a
network, individual users can access their email without running any systems through their own devices
9. Print server
• A print server connects remotely to local computers to print through a network. These servers give businesses the ability to use a single
printer to serve an entire department
• Some printers even come with their own built-in server ready to join a network once they're installed in an office area
10. Domain name system (DNS) server
• These servers transform readable computer domain names into computer language IP addresses. The DNS server takes search data from a
user & finds the requested address to deliver to the client device
11. Collaboration server
• When work needs to be shared across multiple users, a collaboration server makes it easy to connect. These servers allow you to share &
store files, applications and other large amounts of data
12. Gaming server
• Large gaming networks use servers to connect users from around the world. These servers host multi-player online games
13. Monitoring and management server
• Monitoring & management servers function in several capacities. First, they record & track digital transactions & receive user requests.
Others simply monitor & don't actively participate in user operations
• Monitoring servers are responsive to network administrators who survey network health to check for threats or bugs in the system
Server components
• Physical servers are made up of the following parts:
 Motherboard: A motherboard connects all parts of a server. A motherboard's size dictates the amount of storage & the number of hard
drives that can connect to a server
 Central Processing Unit (CPU): The CPU controls the overall functions of a server. It's the center for all processing within a server device.
CPUs are measured by processing speed
 Memory: This part of a server dictates the amount of storage available. Memory needs to be compatible with the motherboard
 Hard drives: A hard drive stores both user & software data for a computer. It uses a controller card for optimum processing functions. A
server housing large amounts of data may need multiple hard drives
 Network connection: A server needs to connect to a network in order to function. A good network connection will ensure a server is able to
receive & respond to user requests
 Power supply: Servers that provide data to large numbers of clients need a bigger power supply than a typical personal computer. Most
servers need a power supply of at least 300 watts
Server Architecture
• Server architecture is the design of how a server functions. Server architecture refers to the layout of a server in its operational capacity
• A server's architecture can be defined by:
 How it communicates with other devices
 The types of operating systems it uses
 Hardware & software components
 Storage & computing capabilities
 The security functions within its systems
Internet Service Provider (ISP)
• The term Internet service provider (ISP) refers to a company that provides access to the Internet to both personal & business customers
• ISPs make it possible for their customers to surf the web, shop online, conduct business & connect with family and friends—all for a fee
• Without an ISP, you wouldn’t be able to shop online, access Facebook or attend online classes . Connecting to the Internet requires specific
telecommunications, networking & routing equipment
• ISPs allow users access to networks that contain the required equipment, enabling users to establish Internet connectivity
• ISPs are responsible for making sure you can access the Internet, routing Internet traffic, resolving domain names & maintaining the network
infrastructure that makes Internet access possible
• An ISP may also be referred to as an information service provider, a storage service provider or any combination of these based on the
services the company offers
• Internet service was originally limited to government agencies & specific university departments. The technology was developed to provide
access to the general public through the World Wide Web in the late 1980s
• As the options for connectivity increased & speeds moved away from slower dial-up connections, the Internet economy was born. Providers
developed more advanced technology, allowing customers high-speed access via broadband technology through cable & digital subscriber
line (DSL) modems
• Behind all of this was a multi-layered web of connections. Local ISPs sold access to customers but paid larger ISPs for their own access. These
larger ISPs, in turn, paid even larger ISPs for access. The trail leads to Tier 1 carriers that can reach every network access point without having
to pay for access. These Tier 1 companies own the infrastructure in their region
• ISPs provide their customers access to the Internet—plain access providers just handle the traffic between the individual & the Internet as a
whole. But there may also be other services bundled in depending on the customer's location & availability like-
 Email services
 Web hosting services
 Domain registration
 Browser and software packages
• Consumers & businesses are accustomed to the idea that they should be able to connect to the Internet from anywhere—whether at home
or while sitting in a local coffee shop. In order to deliver connectivity at high speed, companies have to invest in expensive infrastructure that
includes fiber optic cables
• The ongoing demand for faster speeds and an improved Internet experience means that some of the biggest ISPs have begun investing
heavily in 5G wireless technology
ISPs working
• At the top of the Internet access pyramid are Tier 1 Internet service providers. A Tier 1 Internet service provider is an ISP that has access to
all the networks on the Internet using only network peering agreements they do not have to pay for
• To help conceptualize what purpose Tier 1 ISPs serve, think of Tier 1 ISPs as the major highways of the Internet. These ISPs connect all
corners of the World Wide Web
• Tier 1 Internet service providers sell access to their networks to Tier 2
ISPs. Tier 2 ISPs then sell Internet access to organizations & home users
• Sometimes Tier 1 ISPs may sell Internet access directly to organizations &
individuals. Additionally, a second intermediary ISP, referred to as a
Tier 3 ISP, may purchase network bandwidth from a Tier 2 ISP before
selling that bandwidth to end users
• When traffic is routed from your home network to the Internet, it goes
through a number of hops before reaching its destination e.g. traffic may
travel from your modem, to your Tier 3 ISP’s network, to a Tier 2 ISP’s
network, to a Tier 1 ISP’s network, then back down through a different
set of ISPs before reaching the destination
• The underlying technology that ISPs use to establish connectivity can be based on analog telephone lines (dial-up), DSL, cable, satellite, Wi-Fi,
fiber optics, or other connectivity mediums. The reason many cable & telephone providers are also ISPs is because their underlying
infrastructure can accommodate Internet traffic
• Dial-up speeds fall well below broadband speeds. Dial-up depends on older analog technologies. Digital Subscriber Line (DSL) and satellite
connections are generally faster than dial-up, but still usually fall short of the broadband benchmarks
• Cable connections serve as a good choice for reliable, fast Internet connections. Fiber optic connections are generally the fastest of all the
options (speeds in the 1GB or higher range)
Examples of Internet Service Providers
• Some popular examples of Tier 1 ISPs include Vodafone, Bharti, Deutsche Telekom, British Telecommunications and Verizon
• Many of the largest ISPs are also large telecommunications companies that provide a wide array of services. For example, in addition to data
and broadband Internet services, AT&T(T) provides local & long-distance telephone services, managed networking, telecommunications
equipment, and feature film, television, and gaming production and distribution
• Verizon Communications (VZ) is another ISP that has a diversified range of services. The conglomerate offers local and long-distance voice, as
well as broadband video, data center and cloud services, and security and managed network services

Eight ISP duties

 Provide a reliable and accessible conduit for traffic and services
 Provide authentic and authoritative routing information
 Provide authentic and authoritative naming information
 Report anonymized security incident statistics to the public
 Educate customers about threats
 Inform customers of apparent infections in their infrastructure
 Warn other ISPs of imminent danger and help in emergencies
 Avoid aiding and abetting criminal activity