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Chapter 10 E-commerce: Digital Markets, Digital Goods 437

FIGURE 10.10 CHOICES IN BUILDING AND HOSTING WEB SITES

You have a number of alternatives to consider when building and hosting an e-commerce site.

templates that merely require you to input text, graphics, and other data, as
well as provide the infrastructure to run the Web site once it has been created.
This is the least costly and simplest solution, but you will be limited to the “look
and feel” and functionality provided by the template and infrastructure.
If you have some experience with computers, you might decide to build
the site yourself. There is a broad variety of tools, ranging from those that
help you build everything truly “from scratch,” such as Adobe Dreamweaver,
Adobe InDesign, and Microsoft Expression, to top-of-the-line prepackaged
site-building tools that can create sophisticated sites customized to your
needs.
The decision to build a Web site on your own has a number of risks. Given the
complexity of features such as shopping carts, credit card authentication and
processing, inventory management, and order processing, development costs
are high, as are the risks of doing a poor job. You will be reinventing what other
specialized firms have already built, and your staff may face a long, difficult
learning curve, delaying your entry to market. Your efforts could fail. On the
positive side, you may able to build a site that does exactly what you want, and
develop the in-house knowledge to revise the site rapidly if necessitated by a
changing business environment.
If you choose more expensive site-building packages, you will be purchasing
state-of-the-art software that is well tested. You could get to market sooner.
However, to make a sound decision, you will have to evaluate many different
software packages and this can take a long time. You may have to modify
the packages to fit your business needs and perhaps hire additional outside
consultants to do the modifications. Costs rise rapidly as modifications mount.
A $4,000 package can easily become a $40,000 to $60,000 development project
simply because of all the code changes required.

The Hosting Decision
Now let’s look at the hosting decision. Most businesses choose to outsource
hosting and pay a company to host their Web site, which means that the hosting
company is responsible for ensuring the site is “live” or accessible, 24 hours a
day. By agreeing to a monthly fee, the business need not concern itself with
technical aspects of setting up and maintaining a Web server, telecommunica-
tions links, or specialized staffing. With a co-location agreement, your firm
purchases or leases a Web server (and has total control over its operation) but

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