August 16, 1999
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Motley Fool is using the same approach. Akamai's caching network stores and delivers to subscribers the graphical and other bandwidth-intensive material while Motley Fool's servers provide customized information and process transactions made on its FoolMart commerce site, which sells newsletters, software, hats, T-shirts, golf balls, and other curios.
Trend Toward Outsourcing
Many telecommunications carriers and service providers, such as DBN, Digex, Digital Island, Exodus Communications, Frontier Communications, Level 3, Qwest, and USinternetworking, let companies locate commerce servers on their networks. Many of these carriers will manage, and in some cases even own, the servers and applications. They can also provide fail-safe facilities with redundant power supplies and fireproof buildings.
Outsourcing E-commerce sites is starting to gain momentum. "We're getting more requests for high-availability solutions than ever," says Mitch Ferro, director of product management for Internet hosting at UUnet. "Customers are going to expect more and more high-end operations. They don't want to be the next eBay."
For some companies, the main appeal of third-party service providers is convenience. Turnkey commerce services "make a commerce server much easier to maintain," says Mark Barbier, director of solutions development at ExecuTrain of Phoenix, a unit of nationwide software-training firm ExecuTrain Corp. The Phoenix operation wants to sell its training classes and training books on the Internet while its parent company is implementing a companywide E-commerce initiative. But Barbier doesn't want to set up a server himself; he'd rather subscribe to Yahoo Shopping. "We have people here who could handle it, but they're in classes eight hours a day," he says.
Doing More With Less
Rick Steele, president and CEO of Liveprint.com, says he hired USinternetworking to operate the company's commerce site for two reasons. He wants employees to focus on developing new content and services, rather than on managing servers. Also, he was unsure how much traffic to expect. "I'm not worried about getting two visitors--I'm worried about getting 20,000 visitors," Steele says.
That problem is in the hands of USinternetworking, which manages the site's hardware, software, applications, and integration to back-end systems. And USinternetworking, which owns the hardware, says it can double Liveprint.com's server capacity and triple its 1.5-Mbps network connection within four hours without human intervention. In addition, USinternetworking stress-tested Liveprint.com's applications, cutting two months off the company's time to market.
Other commerce-site managers echo Steele's comments. "Outsourcing frees up engineering resources to improve the quality of the shopping experience on our site," says Tom Chow, VP of technical development for Reel.com Inc., a movie information site that sells videotapes and DVDs. Reel.com outsources its site to Exodus.
Illustration by August Stein
"That way we can intelligently combine our in-house E-commerce application with Akamai's ability to get images to people faster," he says. "Every time a customer wants something, our servers aren't going to be tapped. By decentralizing part of the serving, we're making our bandwidth more available for other things."
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Infoseek's and Motley Fool's use of a service provider to improve performance illustrates the growing trend to outsource all or part of an E-commerce site. And a host of network operators offers services to help companies build and manage commerce sites.
Companies with limited resources facing uncertain demand also find offerings from service providers appealing. Liveprint.com Inc., a startup online printing company, just launched a Web site that lets customers quickly create and print custom stationery, business cards, and other documents such as restaurant menus.
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