Characteristics of E-Commerce
What is "e-commerce?" - Electronic commerce is similar to traditional business transactions, but its defining characteristic is that it is conducted electronically over public and private computer networks. E-commerce holds many of the same requirements as basic commercial transactions in that it requires buyers and sellers to have a place to meet and process the business transaction.
Benefits of E-Commerce: Both buyers and sellers reap the benefits that online transactions have to offer. One of the biggest bonuses for both sides is cutting costs by cutting out the middlemen that are mid-layers of suppliers and distributors (the process of disintermediation). Essentially, sellers can enjoy access to a bigger market with seemingly less burdens while buyers enjoy the convenience and variety they can explore from home.
Image provided by Kroenke, D (see below for reference)
Potential Problems with E-Commerce: Any chosen business method is going to have its trade-offs. E-commerce firms often face channel conflict, which occurs when retailers grow bitter towards a competing e-business selling the same product. This could usually results from a price conflict when the e-business undercuts the prices of the retailer. Logistics also become expensive as e-commerce involves processing a lot of tedious transactions. The company also takes on the additional expense of providing customer support.
Three Tier Architecture
Three Tier Structure: Another essential component to e-commerce is the use of three-tier architecture in its applications. This model is sometimes referred to as "n-tier" architecture, but the concept is still the same as it is simply a separation of application functions.
How to create structure using different data sets and applications:
(aka Presentation Tier): This is the user interface that clients interact with when they are searching for products and conducting their transactions. This process involves only personal computers used by clients and the web browsers they use to find e-commerce pages.
Image from http://upload.wikimedia.org/wikipedia/commons/c/c9/Client-server-model.svg
Server Tier (aka Application Tier): This tier is hosted on web server computers that process commands to and from the client and database tiers. Many of these web server computers are housed in areas known as web/server farms.
Web Farm image from http://upload.wikimedia.org/wikipedia/commons/f/f7/JTF-Guantanamo_server_farm.jpg
Another component to the server tier is the commerce tier which receives, processes and responds to requests made from the client tier.
Database Tier: Sole purpose is to run a database management system (DBMS) to process and hold data. Requests are received in the form of Structured Query Language (SQL).