CASE C – M-COMMERCE: THE PAST, PRESENT AND FUTURE

Q1 - What is the 8 seconds rule of Internet and why is it so important for m-commerce technology?

The 8-second rule is an old rule of the Internet; it is the rough unit of measure of the performance of a web server. This rule was implemented when Internet was taking its first steps. It indeed specified that if the loading time of a web page exceeded eight seconds, Internet users would not wait any longer. Yet the fact remains that this rule no longer applies as a much higher percentage of Internet users have reliable Internet connections, which allow them to upload almost all websites in less than a second.
M-commerce is the ability to conduct a transaction while using a mobile device. There are two frequent types of usage of the m-commerce, a mobile user can buy something online from his mobile web connection, or he can use his mobile device as a way of physical payment in a shop (which thus replaces money, checks or credit card).
There rules are truly fondamentals when talking about making m-commerce technology a reality: reliability, security and speed. In fact speed is a critical need for the development of m-commerce, one will not use its mobile phone to pay for something if it takes longer than using a regular money payment. Furthermore, todayeveryone expect us to be very fast, and we live much faster than former generations used to, and this has only been possible through technological improvement. This boils down to the fact that a new technology must feature speed in its main characteristics in order to gain a real impact on our everyday lifes. In fact, in order to be implemented in our life style, a new technology has to be efficient from its launch period, because consumers have been used to great quality.
A mobile user is going to use m commerce only if it is less convenient than buying online from its computer wireless connection. The 8-second rule is so important to the development of the m-commerce technology because it is the rule of speed.
Moreover, speed is also a criteria for reliability and security, the two other main rules of m-commerce technology. The faster online payments are done, the safer the customers feel, they feel that their data are more protected. And the 3G connection technology has still some improvements to do (like in the subway or in the train) and in the mean time, the faster the information goes, the more independent it makes us from the quirky connection system of the train.

Q2 - Why might it be useful to m-commerce providers to have records of their users’ purchase histories?

In mobile commerce, providers are companies that provide any combination of consulting for mobile e-commerce platforms, mobile devices (such as smartphones), mobile commerce, and mobile content or mobile web sites.
These companies need to distribute and sell products and services over both the Internet and mobile Internet and manage their online enterprises. These companies work on the development of all aspects of mobile commerce, including all directly downloadable on mobile device goods like games, video, ringtones and applications.
Records of their users’ purchase histories might be a truly useful piece of information for the firms. First it could allow them to seize more precisely their customer’s more sophisticated behaviors in order to meet more closely their needs in the future. It could be also possible to lower churn rates and keep their customers satisfied.
In the long run, the access to the records of such histories could enable providers to really understand customers habits; in other words, it could enable them to develop more adapted products and services and to know what consumers really aspire to. But the protection of data and integrity of data is one of the most important concern about mobile payment for consumers. Indeed, 57% of them are worried about security of their data and 56% are concerned about their privacy.

Q3 - What is the biggest concern most cellphone users have about using m-commerce services? What are some other concerns?

Shopping through browsers is an essential feature of m commerce, the use of contact-less payment devices, consequently some concerns arise straight away.
A great share of customers is concerned about the security of the transactions (as 57% of North American users answered in a poll). At a time when there is always more online transactions and always more information transferred, if one engages in a transaction, one wants to rest assured that the transaction is safe and danger free.
This is the reliability of the network that is in question here – Likewise, if one engages in a transaction; one does not want to keep retransmitting, as there are more chances that someone will intercept the secure information.
Data integrity is another great concern, and having a way of knowing for sure a payment went through. People are quite anxious about their privacy: if, for instance, they lose their phone, their account can easily be compromised.
The need for speed is also a major concern, arising fully these days. It is linked with all the previous ones. There are problems as regards the connection: even if it is advertized as broadband, it is generally no quicker than a dial-up connection so poses moreover marketing and expectations management issues. It is crucial as people pay for the data transmission, and the longer it lasts, the more they pay.
M-commerce is now being developed further putting the emphasis on bandwidth, reliability and latency, with a view to building a robust and reliable infrastructure for everyday life and underlining the need to embrace mobile commerce as the value added service only they can provide.

Q4 - Why are technology advances such as pseudo-wires and MPLS technology important to increasing back haul capacity? Try to research those technologies.

Today's firms are looking for speed and reliability to deliver a high quality service in order to urge customers to stay. These network transformations were required to make m-commerce reliable.
In telecommunications, Backhaul is concerned with transporting traffic between distributed sites (typically access points) and more centralized points of presence. In computer networking and telecommunications, a pseudowire (or pseudo-wire) is an emulation of a layer 2 point-to-point connection-oriented service over a packet-switching network (PSN) . An increase in those connections would enable a faster connection between the different points and therefore an increase in the Back haul capacity.
Multiprotocol Label Switching (MPLS) is a mechanism in high-performance telecommunications networks which directs and carries data from one network node to the next with the help of labels. MPLS makes it easy to create "virtual links" between distant nodes. It can encapsulate packets of various network protocols. If the data is moved faster from one network to the other this would have a positive effect on the backhaul’s capacity by enhancing the mobility between the different points and networks, the pseudowire and the MPLS will have a strong positive effect on the backhaul which is mainly based on these two technologies.With the widespread usage of data, services are the preliminary driver of this evolution (Use of MPLS etc). Operators have to find a way to embrace these future technologies without risking their existing services based on older technologies such as ATM.
An evolution of the backhaul network is necessary as well because it is the fundamental link between core network and applications that are taking place. Backhaul has to increase its capacity because it needs to understand the priority of transactions which are happening.

Q5 - How would the widespread of m-commerce technologies affect your life ?

According to the video, m commerce features two fundamental components that are first of all shopping online thanks to the mobile phone browser und using one’s mobile phone as a payment device.
The first one is already well developed but the video shows that m-commerce there is still technological improvements to be done. The examples of Japan and South Africa show us what kind of progress can be made.

If you take the example of South Africa and the virtual bank Wizzit: People can now handle their bank accounts thanks to SMS or Wap, as well as pay their traditionnal bills, like telephone or electricity. Such an application for several phones already exists. Moreover, soon, thanks to your mobile phone camera, you will be able to scan the bar code of a book which will then be added to your Amazon wish list.
The example of Japan and more generally Asia shows perfectly the extent of the rise in the use of m-commerce: Your mobile is a main payment device for all you nedd to buy, food for example and for all the common tasks. For example, in Japan, you don’t need to punch your ticket in order to travel by metro, a swipe of your mobile phone does it.
In Japan, you already can load your mobile phone with money, making the need for coin money disappear. There, Visa offers m-commerce services.
In Europe, Vodafone, Orange and Telefonica gathered to create the Mobile Payment Association because they have understood that standardization is a key success factor: thanks to this, you are able to buy things attached to your mobile phone bill.
If companies observe more thoroughly consumer habits they will be able to offer them what they want and need. We just have to hope that we will soon feel the effects of all those changes.