InformationWeek
Defining The Business Value Of Technology
June 7, 1999
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The most difficult part of the transition was establishing a system that was virtually bulletproof and highly scalable, says Egghead.com chief technology officer Tom Collins. "Everyone talks about 98% uptime as a standard, but moving to the Web we had to have 99.999% uptime," Collins says.
Scalability Challenge
Developing a system that was scalable enough to adapt to the unpredictable amount of traffic the Web site would have was also difficult. "On the Web, you never know how many transactions you might have," Collins says. "If you put up a banner on Yahoo, you could end up with 200,000 people coming to your site in a matter of a few minutes. A different banner on Yahoo might get one-quarter of that. We've seen swings in visitor count that boggle the mind."
When Egghead.com launched its first E-commerce site in 1997 and announced it would give away a Dodge Viper automobile, Collins says site traffic that day skyrocketed to 20 times its average. "It scared everybody, and we didn't stay up and running on our old technology." That problem led to a partnership with Oracle and Sun Microsystems.
Egghead.com migrated from systems running on Informix and Microsoft SQL Server to an integrated Oracle system. Oracle Consulting helped redesign and implement the new infrastructure, which is powered by Sun's Solaris platform. "We needed a platform that would let us have a million people on the site in a day," Collins says. "There are lots of solutions on the market today, but if you look at the top 10 E-commerce sites, nine are on Oracle."
Collins declined to be specific about the technology powering Egghead.com's Web site, but he says the company uses "pretty much a full suite of Oracle products and Sun boxes ranging from the 3500 series to the 6500 series." The Oracle Internet computing platform includes an Oracle database and Oracle Application Server, Oracle Internet Commerce Server, and Oracle Applications.
Egghead.com is adding functionality and changing the look and feel of its Web site every three to six months. "I'm already starting to map out things we'll deliver at this time next year," Collins says. He believes electronic software downloading will become a major growth area for Egghead.com and its competitors. "That is a major effort I'm always keeping my eye on," Collins says. "It's intriguing, but it's hard to say what will happen with wide bandwidths coming on."
Tough Competition
Egghead.com faces intense competition on a variety of fronts. Dell and Compaq sell their products online, and new auction sites keep popping up. "So far, Egghead.com is doing the right things. But it's a competitive market and they're not in the clear," USBan-corp Piper Jaffray's Klein says. "There are new models for retailing online, selling at or below cost, and no one really knows what will happen. It's still a frontier, and they have as good a chance as anyone to succeed."
Steven Weinstein, a research analyst at Pacific Crest Securities, predicts that within 12 months, Web retailers will have to be proficient at one-to-one marketing. "Everyone is still learning how to do this, and no one is good yet, except maybe Amazon.com, who picked up on it right away."
Egghead.com's competition includes OnSale, which sells products based on the distributor price plus several fees, including a $10 processing fee, and Cyberian Outpost, a high-service company that's been innovative in site design, says Weinstein.
Egghead.com is implementing the second phase of its Web site design and technology. Customer service is a critical focus, Orban says, and the company recently consolidated its call center and E-mail response group into a single facility. "We are in a new cycle in retailing," he says. "The Web is changing all of our lives and the way commerce is conducted. That won't happen overnight. I think we're on the cusp of a new 15- to 20-year cycle."
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