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Chapter 3 E-business infrastructure 177

predicted that Internet EDI’s share of EDI revenues would climb from 12 per cent to 41 per
cent over the same period.
Internet EDI enables EDI to be implemented at lower costs since, rather than using propri-
Value-added etary, so-called value-added networks (VANs), it uses the same EDI standard documents, but
network (VAN) using lower-cost transmission techniques through virtual private networks (VPNs) or the
A secure wide-area
network that uses public Internet. Reported cost savings are up to 90 per cent (EDI Insider, 1996). EDI Insider
proprietary rather than estimated that this cost differential would cause an increase from the 80,000 companies in the
Internet technology. United States using EDI in 1996 to hundreds of thousands. Internet EDI also includes EDI-
Virtual private structured documents being exchanged by e-mail or in a more automated form using FTP.
networks (VPN) It is apparent that there is now a wide choice of technologies for managing electronic
A secure, encrypted transactions between businesses. The Yankee Group (2002) refers to these as ‘transaction
(tunnelled) connection
between two points using management (TXM)’ technologies which are used to automate machine-to-machine infor-
the Internet, typically mation exchange between organizations. These include:
created by ISPs for
organizations wanting to document and data translation, transformation, routing, process management, Electronic
conduct secure Internet
trading. data interchange (EDI), eXtensible Mark-up Language (XML), Web services … Value-
added networks, electronic trading networks, and other hosted solutions are also tracked
in the TXM market segment.

Focus on Mobile commerce

In Chapter 1 we explained that e-commerce refers to both informational and financial transac-
Mobile commerce or tions through digital media. Similarly mobile commerce (m-commerce) refers to the use of
m-commerce wireless devices such as mobile phones for both informational and monetary transactions.
Electronic transactions
and communications While fixed access to the Internet has dominated to-date in many developed countries, in
conducted using mobile future this situation will change due to the ubiquity of the mobile phone and the adoption
devices such as laptops, of higher-speed services and more sophisticated handsets. In some countries such as Japan
PDAs and mobile
phones, and typically with and China, the majority of web access is via mobile phone and we can expect to see
a wireless connection. increased mobile use in all countries. In China there are more mobile subscribers (over half
a billion) than the whole US population (Belic, 2007) and according to the regularly updated
Comscore panel data (www.comscore.com), use of the web by mobile devices in Japan is
equal to that of traditional computer access.

Box 3.10 Adoption and potential for mobile commerce around the world

The potential of mobile commerce is evident from research by Wireless Intelligence
(2008) which found that at the end of 2007, globally there were 3 billion subscriber
connections and, if there was one active subscription per person that would represent
half the planet’s population. But they explain that because of multiple SIM ownership
there is always a lag between connections and subscribers, so there is still some way
to go before half the world’s population is connected. They also note that penetration
is relatively low in developing countries such as India (21%) and China (41%), showing
the potential for future growth. Some of the other figures are staggering:

More than 1 billion mobile phones were sold in 2007
It took 12 years to get to 1 billion GSM connections and just 30 months to get to
2 billion
There are 1.2 million new GSM connections every day
Nearly 7 billion text messages are sent every day.
Table 4.3 gives figures for different content and applications of mobile phones in China,
the US and several European countries.