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Net Prophet - by Dylan Tweney

October 26, 1998

Electronic commerce has come a long way in the past 20 years

On the reverse of this week's edition of InfoWorld you will find our 20th anniversary special issue. To produce this issue, senior editor Renee Gotcher and I spent the better part of six months researching, reading, writing, editing, and thinking about the past two decades of computing -- and the next two.

This project was a powerful reminder of just how much technology is changing the way we live, work, and relate to one another. That's nowhere more apparent than in the rise of Internet-based electronic commerce. E-commerce goes back several decades, but only in the past few years has it started to become a significant economic and social force. That's due entirely to the Internet.

Business-to-business e-commerce has existed for 25 years or more in the form of electronic data interchange (EDI). Banks, too, have been using a form of e-commerce for decades, first through wire transfers and then through Financial EDI, or F-EDI, standards.

But by and large EDI and F-EDI have been limited to a small circle of participants, because the price of entry is too high for all but the biggest enterprises and governments.

Business-to-consumer e-commerce has also been around for about two decades. One of the earliest efforts to conduct business online was The Source, a commercial online service started in 1979.

The Source offered many of the same things today's so-called "portal sites" deliver: up-to-the-minute news, weather, sports scores, and stock quotes. It also featured some business and financial services, as well as the capability to make airline reservations online.

The Source never drew a large audience -- most relied on it more for news than for buying things. This may have been due to its primitive text-based interface. Plus, its subscribers were too small of a market to interest many retailers. In 1989, CompuServe acquired and absorbed The Source.

Prodigy, a joint effort between IBM and Sears launched in 1990, was another attempt to build an online platform for consumer e-commerce. Prodigy used a clever, low-bandwidth graphics description language to display images and colors on users' screens. But the images were too cartoonish and blocky to provide a realistic picture of goods for sale. That is one reason why e-commerce didn't take off on Prodigy.

Large-scale consumer e-commerce didn't become a real possibility until January 1995, when the National Science Foundation's NSFNet ceased to be the Internet's primary backbone, and the NSF's restrictions on the nonacademic use of the Internet were removed. In short order the Net, free of commercial restraints and made graphically rich and user-friendly by Web technologies, became populated more by business interests than academic ones.

Now, late in 1998, Internet commerce is booming. As more and more people move online, the market for online sales of goods and services will only grow. Even more significantly for business, the Internet is not just a marketplace, it's a platform for integrating disparate information systems.

Unlike proprietary EDI systems and the old, text-heavy commercial online services, the Internet is graphical, open to all comers, and is fast becoming ubiquitous. That makes it a rich ground for commerce, both business to business and business to consumer.

If you think e-commerce has come a long way in the past 20 years, wait until you see the next 20.

Dylan Tweney (dylan@infoworld.com) has been covering the Internet since 1993. He edits InfoWorld's intranet and Internet-commerce product reviews.

Previous columns by Dylan Tweney

Everyone's making up markup languages for fun and profit
October 19, 1998

Commerce-enabled Web sites will lead a business revolution
October 12, 1998

Delivering the bits is only half the battle in Net software sales
October 5, 1998

Every column since August, 1997

Please direct your comments to InfoWorld Electric.

Copyright © 1999 InfoWorld Media Group Inc.

IBM is the proud sponsor of the I-Commerce section on InfoWorld Electric.

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