Prepared by:

Omid Omidvar, Program Manager Administration Building 101, Room A421 Gaithersburg, MD 20899-0001 omid.omidvar@nist.gov Tel. (301) 975-4401 Fax. (301) 926-9524

EXECUTIVE SUMMARY

The Advanced Technology Program (ATP) of the National Institute of Standards and Technology (NIST) invests in U.S. companies that are developing very high-risk but powerful new enabling technologies. ATP seeks to help fill the gap between basic research and product development and to invest in technology that would not be developed in a competitive time frame without government cost sharing. ATP tries to anticipate and invest in technologies that will benefit the U.S. in five to ten years. Along with general competitions, which are open to proposals from all technical areas, ATP also funds focused programs, each with specific business and technical goals. This White Paper proposes a focused program to develop and improve the enabling and infrastructural technologies needed to realize the potential benefits of electronic commerce, an exciting and fast-growing new technology. The need and structure for such a focused program were discussed with industry at an open workshop on Defining the Advanced Technology Challenges of the Electronic Commerce Marketplace, March 9-10, 1998, at NIST in Gaithersburg, Maryland. Workshop participants strongly recommended a concentration on interoperability, security, intelligent agent technologies, and multi-application smart cards; these topics would be suitable for a first competition. The title of the focused program, Interoperable Infrastructures for Distributed Electronic Commerce, reflects industry's expressed need for an infrastructure that will support the continual development and improvement of a wide range of interoperating services.

OPPORTUNITY

Participants at the workshop on Defining the Advanced Technology Challenges of the Electronic Commerce Marketplace recognized that there is a limited window of opportunity to ensure that open technologies and competing implementations continue to drive electronic commerce toward more functionality and performance at lower cost. Now is the time for industry to ensure that consumers, businesses, and governments will profit from the efficiency and effectiveness that can be achieved through an open, secure electronic commerce infrastructure. Delay could easily result in point solutions that are isolated and proprietary, serious divisions within the electronic marketplace, consumer confusion and distrust, very serious problems with security and privacy, and the loss of U.S. leadership in this economically critical technology.

BACKGROUND

Electronic commerce, in one form or another, is already a pervasive element in our daily lives. Consumers can visit the Web to purchase all kinds of goods and services such as books, cars, flowers, food, banking, entertainment, and tickets. Businesses can use the Web to improve internal communication, help manage supply chains⁽²⁾, conduct technical and market research, and locate potential partners.

Some successful electronic commerce applications use Web-based mediators to augment or replace human middlemen; they help businesses save money and improve the level of customer service. For example, Federal Express provides a Web site⁽³⁾ for customers to perform such tasks as tracking their shipments; phone calls are reduced and both the customer and Federal Express benefit⁽⁴⁾. Other examples of the changing (or diminishing) role of the human mediator in the workplace include the growing importance of on-line sale of travel and entertainment tickets, stocks and bonds, books, insurance, and automobiles⁽⁵⁾.

The business itself may be characterized by a limited virtual existence. For example, the construction or major modification of a building, road, or other large structure involves the creation of a joint venture requiring the coordination of many separate contractors who may have never worked together and may never work together again. Electronic commerce may soon become a critical enabler of all phases of the joint venture's existence, from team formation through planning, selection of materials⁽⁶⁾, bidding, work and material coordination, to distribution of profits and dissolution of the venture; advantages include improved information flow and the ability to find the best companies during team formation.

Other applications of Web technologies indirectly use or support electronic commerce; a significant trend is the continuing convergence of computers, communications, education, publishing, and entertainment. Online data access is transforming the roles of students and researchers, libraries, authors, and publishers: electronic resources include tutoring, training, and very low-cost, very rapid access to and interaction with incredible information resources. The classroom or workplace may be virtual, as face-to-screen communication enables study and work that is independent of time and space. Interactive games, chat rooms, etc. have revolutionized the entertainment industry, and have incidentally been a factor in developing the technology and user confidence that enable business applications.

However, there are significant problems with the current technologies of electronic commerce. For example, The Wall Street Journal reported that "Even the most thorough search engine manages to find only about a third of the pages on the Web ... Search engines are best known for turning up too much information, not too little--often responding to simple queries with tens of thousands of Web pages ... the one page you need might not be among those thousands and there may be no way to find it."⁽⁷⁾

Industry, too, has expressed concerns about such issues as security and privacy, and efficient and effective use of this new electronic resource. To assess these and other issues, industry and ATP organized an open workshop on Defining the Advanced Technology Challenges of the Electronic Commerce Marketplace, March 9-10, 1998, at NIST in Gaithersburg, Maryland. Parallel tracks addressed the four themes previously identified by industry: "Information Overload," "Security and Payment Technologies," "Building Interoperable eCommerce," and "Changing Business Models." This White Paper is based on the workshop, industry White Papers⁽⁸⁾, and other publicly available information on research, development, and emerging applications of electronic commerce. Participants represented large businesses, small businesses and consortia, academia, and government. Erica Rugullies, an industry analyst and electronic commerce expert for the Giga Information Group, and a keynote speaker at the workshop⁽⁹⁾, stated in a report to Giga customers that "attendees delivered to ATP the following major conclusions:

• A lack of interoperability among technologies is a major inhibitor to electronic commerce.
• Without ATP involvement, industry will continue to develop point solutions that are not interoperable, thereby slowing the evolution of electronic commerce.
• ATP should form an electronic commerce focused program and center it around the following technologies:
• Public key infrastructure (PKI)
• Multi-application smart cards
• Intelligent agent technology for e-commerce (searching and querying, consumer shopping, stock market, business-to-business commerce)
• Security for mobile objects (agents, executable downloadable content, XML or HTML, etc., intellectual property)"⁽¹⁰⁾

The ATP Web site⁽¹¹⁾ contains the industry summaries of the four tracks⁽¹²⁾, the invited presentations, and the workshop announcement⁽¹³⁾.

POTENTIAL FOR U.S. ECONOMIC BENEFIT

Information technology is used today to make old forms of commerce more efficient; information technology will be used tomorrow to make old forms of commerce more effective and new forms possible. The broad goal of this program is to stimulate the development of interoperable, trusted, effective, and efficient electronic commerce hardware and software that will save time and money in the home, office, and factory and provide a foundation for further growth. In the opening session of the workshop, J. Marty Tenenbaum, Chairman and Founder, CommerceNet Consortium, challenged industry to address the following "sweetest spots" in the four tracks:

• Information overload
• Finding things
• Email filtering
• Security and payment technologies
• Smart card infrastructure for security, payment
• Distributed trust services
• Building interoperable eCommerce
• Catalog integration
• Agent negotiation protocols
• Changing business models
• Supply webs
• Smart markets⁽¹⁴⁾

Consumers, businesses, and governments will be able to greatly improve their ability to acquire, generate, organize, or disseminate information about all types of goods and services; order and pay for those goods and services; accept orders and payments; coordinate work; or develop new business organizations. This will be accomplished by using industry's research to remove current barriers and create an environment in which electronic commerce is viewed as an easy and safe type of commerce. The hardware and software will also help people to build and organize their own, personal collections of information on topics which may be quite unrelated to traditional commerce.

This program will provide substantial benefits to a very broad range of industries and consumers. According to The Wall Street Journal, for example, one of the goals of the banking industry is "integrated, high-speed computer networks that sell everything from mutual funds and insurance policies to simple checking accounts, all aimed at consumers around the globe."⁽¹⁵⁾ The services described in this program--especially interoperability, security, and privacy--will certainly be required to achieve this goal.

As Erica Rugullies reported, industry responded with a very similar list of technology requirements. However, without ATP, "market failure"⁽¹⁶⁾ will be a very likely scenario. For example, interoperability might be achieved only by the emergence of a single major source for electronic commerce solutions; the resulting lack of competition would reduce quality and innovation and increase prices. Other possibilities include delayed availability and a significant increase in non-U.S. based solutions. The problem for a small technology supplier is how to make its "good idea" interoperate with the good ideas of many other technology suppliers, large and small, to make electronic commerce more effective and efficient. With ATP support, highly innovative U.S. technology suppliers and users--including small businesses--will develop joint ventures to rapidly create high-risk, high-payoff solutions. Consumers and small businesses will benefit from the opportunities for easily and safely buying and selling in huge online markets.

The following goals are targeted:

• Trigger an explosion of new information processing products. The goal is to stimulate the development of a technology framework consisting of a wide range of specialized, value-added information processing software and hardware that will build on the technologies developed by industry with assistance from this program. These technologies will provide interoperability, security, information filtering and organizing services, and a migration path for legacy data. The cost and risk of product development within the framework will be far less than present costs and risks, and the ability to market products will be far greater; this will lead to more and better products and continue to drive costs, risks, and prices lower.
• Greatly increase commercial sector efficiency and effectiveness in many areas (e.g., customer service and employee productivity) by greatly improving access to large, complex, distributed information bases. Such information bases would provide a wide variety of general and detailed information about potential customers or classes of customers, suppliers, products and services, new developments in basic and applied science and technology, business news, etc⁽¹⁷⁾.
• Increase the ability of all people to access and organize information that they need to manage their own health, finances, education, leisure activities, etc. The benefits of personal information management services should greatly exceed their initial costs and the time needed to use them effectively.

The following paragraphs illustrate the wide range of issues, challenges, and opportunities in electronic commerce:

Marketing: Reaching customers through all of the competing information sources is difficult now and is likely to become even more so. A business that cannot organize and present itself electronically will become inefficient and unknown; a successful business will help itself and its customers by arranging electronic information with more care than it now arranges its physical merchandise or paper catalogs⁽¹⁸⁾. With appropriate electronic commerce tools, businesses will find that understanding and retaining their customers can be easier and far more rewarding than in conventional commerce.

Customer Service: The growing expectation that business and government should provide sales and services 24 hours a day for 7 days a week has created a new market for effective, easy-to-use information services that help consumers help themselves. Everyone benefits from better tools to find, evaluate, organize, and use information about the goods and services that they buy, use, and maintain⁽¹⁹⁾. Otherwise, the potential customer is likely to be frustrated by far too many responses to an overly-general query or none at all to an overly-specific query. Understanding the customer's requirements may be difficult enough in conventional commerce, where the customer and salesperson share a huge amount of general knowledge; it will be even more difficult in electronic commerce.

Security and payment: Business Week recently reported that "In a new Business Week/Harris poll, a majority of the 999 respondents fingered privacy as the main reason they're staying off the Net--above cost, ease of use, and the morass of unwanted marketing messages."⁽²⁰⁾ Consumers need forms of electronic payment that they can understand and trust. Businesses need secure and efficient electronic payment to reduce paperwork and enable the consumer to buy more things more quickly. Businesses and consumers need forms of personal identification that are reliable and convenient⁽²¹⁾.

Privacy: Privacy is important; the consumer may want to limit the collection of detailed personal information such as buying habits and financial resources. The consumer may want access to the personal information that has been collected, or may want to maintain a personal record and analysis of what personal information could have been collected; consumers may also want the means to become more adept at hiding or manipulating personal information⁽²²⁾.

Planning: Businesses and governments must plan for research, product or service development, production and marketing. Planning is a very difficult, information-intensive task, given the increasing opportunities and requirements for greater quality and for better management of supply chains⁽²³⁾. Businesses and governments may have serious problems anticipating and planning for the effects of advanced information processing technology. On the other hand, that same technology may provide the planning software, generic plans, forecasts, or online forums to alleviate these problems.

Virtual Enterprise: Various forms of cooperative ventures are critical for many consumers, businesses, and governments. Technology may make it easier to find the right partners to capitalize on a market opportunity, but harder and more urgent to make decisions among them. Too many choices of partners, based on too much unevaluated information, may lead to confusion as expectations rise more rapidly than can be supported by the available technology.

Government: Federal, state, and local governments must plan and implement new methods for conducting business as both a consumer and a provider of goods and services⁽²⁴⁾. Government and business must recognize and exploit opportunities for dual use technologies such as the Internet. Governments have a special responsibility to ensure that electronic commerce provides level playing fields for themselves, consumers, and businesses.

Consumers, businesses, and governments must understand and accommodate the evolution of information channels, organizations, economics, and measures of success, and the real or potential problems that will accompany this evolution. And, most important for this Focused Program, all sectors must be able to understand the delicate interactions between a new technology and the forms of commerce that it may facilitate or inhibit.

GOOD TECHNICAL IDEAS

The objective of this Focused Program is to encourage industry to use its "good technical ideas" to implement research and technologies as services that will support a greatly enhanced level of electronic commerce.

Electronic Commerce Services

Workshop participants recognized the need to develop an information infrastructure that will enable all sectors of the economy to realize the benefits of electronic commerce. They also concluded that interoperability is a critical requirement if we are to avoid proprietary, closed solutions. The role of ATP, then, is to encourage the development of good technical ideas that will provide the basic services needed for an open electronic commerce infrastructure. The following basic services are critical⁽²⁵⁾:

1. Services that provide security and privacy for ordering, payment, and the maintenance of records

These services provide authentication of other parties, role-based access control, protection of privacy, assurance of information integrity, non-repudiation of transactions⁽²⁶⁾, and assurance that mobile or shared objects have not been corrupted. Examples include cryptographic algorithms and their software or hardware implementations

• Security and privacy services must be based on well-understood, reliable theory and efficient implementations⁽²⁷⁾.
• Security and privacy may be extremely important. As noted in the previous reference to the results of the Business Week/Harris poll, many consumers will participate in electronic commerce only if they are confident that personal information will be protected; businesses must have acceptable privacy policies and demonstrable technologies to ensure that they are enforced.

2. Services that store, search, and retrieve information

These services find and maintain information needed for electronic commerce--e.g., information about potential suppliers, products, services, and customers--as well as information needed for many other purposes. Such services should be easy for people to understand and use appropriately, and sufficiently flexible and reliable to equal or exceed expert human capabilities. The objective is to develop new technologies that interoperate with the old technologies for file manipulation, text processing, etc.

Suitable services may involve intelligent, mobile software agents, which can perform such "human" tasks as searching, querying, and negotiating, and can also extend their own capabilities by cooperating in various ways with other agents⁽²⁸⁾ to obtain search strategies, ontologies, and other general or specific information. Security is clearly very important; in particular, the user who launches an agent and the information systems that host it must be able to trust that agent to operate as intended. Reliability, predictability, and efficiency will become very important as agents become more and more capable of independent actions. The user should usually be able to anticipate results; help must be available to explain the instances in which results are surprising and/or inappropriate.

3. Services that filter, organize, and summarize information

These services help organizations and people define, construct, populate, maintain, and modify their own individualized real or virtual collections of information. Dr. Yelena Yesha, Director, Center of Excellence in Space Data and Information Sciences, NASA Goddard Space Flight Center and Professor of Computer Science and Electrical Engineering, University of Maryland, Baltimore County, included the following objectives in her presentation at the workshop session on Information Overload:

• Give consumers a variety of efficient ways to search for information across heterogeneous systems and to match potential data sources with the needs of consumers.
• Provide uniform, customizable and dynamic user interfaces for a variety of common data types (text, images, video, audio). Provide user interfaces that take advantage of specialized data types such as maps and three-dimensional data.
• Allow consumers to search for information using terms from domains they are familiar with (Ontologies).
• Provide data mining facilities for providers to track consumer habits and for consumers to discover underlying trends in products and services⁽²⁹⁾.

Excluding useless information may be as important as including useful information; for example, personal agents and information filters could be used to detect and reduce spam and other deterrents to electronic commerce. The objective is not to refine current technologies for indexing, ranking, etc., but to develop new technologies that interoperate with the old.

These services must be able to support information requirements and information sources that change rapidly and unpredictably; otherwise, people will be easily overwhelmed by the huge amounts of available information. Such services might work in cooperation with storage, search, and retrieval services that can be easily customized and extended to meet personal requirements.

4. Services that provide a migration path for legacy information

Legacy information may belong to the user or to someone else, but it should be seamlessly integrated with all the new information that the user acquires. Useful services could range from highly efficient translation of masses of well-structured information to technically advanced agent technologies and ontologies for translation of unstructured information.

Technology could help people evaluate and update their skills, and it could help them learn to develop more productive relationships with their information processing software and databases.

5. Services that enable business-to-business and consumer-to-business operations

These and entirely new services could be specializations and combinations of the preceding services to perform such tasks as qualifying suppliers, ordering from suppliers, obtaining capital, shopping, and investing in the stock market. These services should have some special added value over the more generic basic services from which they are derived (e.g., a company engaged in multi-national trade might need multi-lingual services that identify potential non-tariff trade barriers).

Interoperability is a critical objective for all services; this program will not support the development of point solutions. From a user's perspective, point solutions would create unnecessarily isolated markets or require that businesses and consumers invest their time and money in multiple solutions to the same problem. From a system integrator's perspective, point solutions would make it difficult or impossible to integrate independently developed subsystems⁽³⁰⁾.

Electronic Commerce Research and Technology

As Erica Rugullies reported, there were four areas in which industry saw opportunities for major economic benefits from ATP investment:

• A Public Key Infrastructure (PKI)⁽³¹⁾ is needed to provide effective and efficient security and privacy. Industry has "good ideas" for developing consortia and technologies that will provide the institutional/technical infrastructure for the following:
  • key management,certification, etc.
  • improving the efficiency of encoding/decoding large volumes of information
  • very large scale, cooperative demonstrations to ensure scalability, user confidence, etc.
• Multi-application smart cards⁽³²⁾ could provide convenient, secure, private services to support electronic billing; digital cash; role-based access control; access, manipulation, and storage of personal records on the web⁽³³⁾; and verification of identity⁽³⁴⁾. Very large scale, cooperative demonstrations will be needed to determine factors such as the following:
• integration with existing or envisioned infrastructures (PKI, credit cards, debit cards, ATMs, cash, microcash etc.)
• appropriate identification of the owner (PIN, signature, biometrics, etc.)
• determination of which applications are of most interest to users
• ensure user confidence and acceptance
• ensure scalability
• Cooperating, intelligent software agents could perform many of the tasks for electronic commerce that are now performed by people for conventional commerce. "Good ideas" include the following:
• an agent could perform intelligent Email filtering or catalog integration
• an agent acting as a buyer's representative could acquire an appropriate ontology^{(35) (36)} from another agent; that ontology would enable the agent to understand information about a specific class of products and to communicate with other agents about those products
• consortia could establish agent registers to ensure high levels of security, integrity, and efficiency
• specialized agents could be developed perform many low-level, detailed tasks to improve the management of a supply chain
• experience encapsulated within a knowledge base could enable a customer's agent to find and exploit the critical facts that differentiate reasonable alternatives from a vast mass of probable rejects
• agents could assist the customer in the organization of information (e.g., summarization) and the evaluation of its quality (e.g., comparing different information sources)

The general goal should be to at least equal the results that can be obtained by conventional human methods. Agent technology and applications to commerce are popular in the research community^{(37) (38) (39)}; questions about efficiency, security, and acceptance by the customer could be resolved by large-scale prototypes and demonstrations.

Security for mobile objects presents particular challenges in both effectiveness and efficiency. Both the owner and the host of a mobile object must trust that the object will efficiently do what it is supposed to do, and nothing more. "Good ideas" include the following:

• develop consortia to build on technology that is already proving to be successful, such as XML
• develop consortia to ensure the testing and registration of critical objects
• develop agent negotiation protocols
• develop a community of supply webs and smart markets within which mobile objects could exist, move, and operate efficiently and effectively

STRONG COMMITMENT OF INDUSTRY

A review of the current state-of-the-art and state-of-the-practice of electronic commerce provides many examples of successful applications in diverse business sectors, rapid expansion into our everyday lives, and a great potential to profoundly affect the ways in which we conduct many types of business. Despite the rapid growth and popularity of electronic commerce--or perhaps because each success has created ever greater expectations--industry has expressed its need for more and better electronic commerce technologies. This need was expressed as early as 1993, when ATP received industry white papers on an electronic commerce infrastructure⁽⁴⁰⁾ and on the use of electronic commerce in construction⁽⁴¹⁾ and electronics⁽⁴²⁾. White papers were received in 1994 and 1995 on virtual enterprises⁽⁴³⁾, agile manufacturing⁽⁴⁴⁾, publishing via the Web⁽⁴⁵⁾, electronic commerce infrastructure⁽⁴⁶⁾, and knowledge management⁽⁴⁷⁾. The interest from industry has continued, and has included extremely large businesses as well as small businesses and consortia. Banking, manufacturing, information technology suppliers, other industrial sectors, education, and government have all expressed great interest in electronic commerce. Industry has proposed many ATP projects which have been closely related to electronic commerce technology and application:

• The ATP has an important role in healthcare through its Focused Program for Information Infrastructure for Healthcare. Potential applications range from payment to patient records to remote diagnosis; many of these applications or their supporting technologies are closely related to electronic commerce. A 1997 award, for example, was for data mining tools to evaluate new drug therapies⁽⁴⁸⁾.
• Also in 1997, the ATP indirectly supported the development of electronic commerce technologies and applications through General Competition⁽⁴⁹⁾ awards for data mining and "common sense" knowledge, Focused Program for Component-Based Software⁽⁵⁰⁾ awards for software security, business services, and semantic modeling, Focused Program for Technologies for the Integration of Manufacturing Applications⁽⁵¹⁾ awards in business services, software agents, and software integration, and a Focused Program for Motor-Vehicle Manufacturing Technology⁽⁵²⁾ award for software integration.
• The ATP has announced a new Focused Program for Digital Video in Information Networks⁽⁵³⁾. This may be viewed as complementary to this Electronic Commerce Focused Program; Digital Video is focused on a particular type of information, i.e., pictures, while Electronic Commerce is focused on the infrastructure to support many different types of information, including pictures, text, tables, and application-specific services.

These proposals and the attendance and level of enthusiasm at the NIST workshop in March show a high level of industry interest in and commitment to an ATP electronic commerce program.

OPPORTUNITY FOR ATP FUNDING TO MAKE A DIFFERENCE NOW

Despite the level of research in industry, academia, and government, and the number and variety of ATP awards supporting various applications of electronic commerce, there is a very wide gap between our expectations and the reality of electronic commerce. In fact, that gap is probably widening as online data sources grow much more rapidly than our ability to organize and understand their data. Businesses are struggling to understand and profit from a technology explosion: corporate communication has evolved into a network of internal and external networks; application-oriented files and databases have evolved into virtual corporate databases; on-line transaction processing supports day-to-day operations; data warehouses, knowledge management, and data mining are important tools for analysis and planning.

Electronic commerce between businesses is already widespread and very profitable, as in the following example from The Digital Economy⁽⁵⁴⁾, Chapter 3, Electronic Commerce Between Businesses:

• "Reduced Inventory/The Right Products in Stock
• IBM's Personal Systems Group provides an illustration of how the Internet and private networks are helping companies keep stocks of inventory smaller, yet meet consumer needs.

Each month, the group's marketing departments report information on how many PCs they think will be sold. The production planning departments identify manufacturing and materials capacity in each factory. Armed with inputs from across the company on demand and supply, production schedules are assigned to each factory. The procurement staff uses the same information to negotiate with suppliers. As new information comes in each week, the process is repeated and the production schedule fine-tuned.

Electronic communication between factories, marketing and purchasing departments have made this quick response possible. Problems are communicated as they arise and the appropriate adjustments are made. If demand suddenly rises or if one factory cannot meet its production schedule, IBM can increase production at another factory.

The Personal Systems Group has reported significant results from its Advanced Planning System (APS). During the first year of APS, inventory turns increased 40 percent over the previous year, and sales volumes increased by 30 percent. The group anticipates another 50 percent increase in turns and a 20 percent increase in sales volume in 1997. By better utilizing its existing manufacturing capacity, IBM has avoided having to make additional investments to meet the increased volume requirements. The lower investment and operating costs due to improved inventory turns have resulted in savings of $500 million.

Lower Cycle Times

Chrysler, Ford, GM, Johnson Controls and 12 of their suppliers worked together as part of the Manufacturing Assembly Pilot (MAP) to improve material flow within a pilot four-tier seat assembly supply chain. At the project's outset, it took four to six weeks for material release information to reach the bottom of the supply chain. Along the way, information was distorted and truncated. The resulting late, inaccurate and untrusted information cost millions of dollars in the form of "just-in-case" inventories, premium freight, unplanned set-ups and changeovers, and other inefficiencies.

By electronically connecting the MAP participants, production schedules reached the bottom of the supply chain in less than two weeks. On-time shipments improved 6 percent. Error rates were reduced by 72 percent. Up to eight hours per week per customer was saved in labor costs.

Connecting all levels of suppliers through the entire industry via EDI could save nearly $1.1 billion annually a cost savings of $71 or more per car and decrease information lead-time to just one day between each tier of the supply chain."

Such success stories represent just the beginning; there are many more opportunities for electronic commerce to help businesses and consumers. Electronic commerce is evolving through three on-line generations: Web-based communication of tagged text; customer-to-supplier commerce; and a networked economy that supports auctions, virtual enterprises, communication of complex part descriptions, and almost any other form of information interchange that we can imagine.

Electronic commerce could drive the unification and simplification of Web technologies; it could also make them more complex and dangerous if we do not develop the proper technologies for evaluating and protecting information. Consumers could develop adverse reactions: they could reject an electronic marketplace that was too complex; they could (and should) develop a distrust of unevaluated data, unreliable payment mechanisms, and a loss of privacy. Moses Ma, CEO, Business Bots, pointed out in his workshop presentation on "Building iMarkets" that "we seek to avoid a global re-enactment of the 1987 market crash caused by program trading, equivalent to agent-based markets⁽⁵⁵⁾;" we certainly should take appropriate steps to ensure that electronic commerce rapidly evolves toward stability.

The Interoperable Infrastructures for Distributed Electronic Commerce ATP program is concerned with developing and improving the key enabling and infrastructural technologies which will help maintain U.S. leadership in electronic commerce technologies and applications. Interoperability is a good example of the cliche that everyone's problem is no one's problem. Interoperability is very expensive for the pioneers, and the payoff may be shared with their competitors. For many venture capitalists and technology developers, point solutions appear to be much more attractive than interoperable solutions. They may be quicker, cheaper, easier to implement, require less planning, and may guarantee customer lock-in for a period of time. Developers may know that interoperable solutions will benefit the customer and provide long-term benefits for themselves, but the short-term business and technical costs and risks may be too high to obtain the necessary capital. Also, developers who do see the long-term advantages of interoperability may not see any reasonable way to demonstrate to customers that they have, in fact, achieved a useful degree of interoperability.

Customers, with a few exceptions such as large corporations and government agencies, do not have the financial or technical clout to force the development of interoperable solutions or to test products to ensure that they really are interoperable. Users and information technology staff in large businesses may want interoperability but will have a difficult time justifying the possible long-term savings vs. the high short-term costs. Also, experienced customers may have observed that "interoperability" has often meant minimal functionality and efficiency; the high-quality services may include proprietary extensions that seriously compromise interoperability.

Without ATP support, interoperability is unlikely⁽⁵⁶⁾. The information technology industry will tend to go for short-term profit and will not budget for interoperability. Services for storage, search, retrieval, filtering, organizing, and summarizing will offer isolated, proprietary solutions but will not provide the highly functional, integrated environment that customers really need.

With ATP support, the costs of interoperability are reduced, and there is a great opportunity to develop joint ventures that can share in development costs and provide convincing demonstrations of interoperability. However, there is a need to act quickly: the end of the Y2K crisis will release resources and demand for electronic commerce, which will go into the development of point solutions unless another alternative is available⁽⁵⁷⁾. Industry recognizes that, if interoperability is hard now, it will be worse in the future; interoperability will only become more expensive and less effective as more and more point solutions are developed. ATP is in an ideal position to assist industry in the development of the interoperable solutions that will provide great long-term benefits to the economy as a whole. Without ATP, there is a great temptation for industry to develop quick, cheap solutions that will lead to immediate profits at much higher long-term costs to the customers.

In summary, whether we are aware of it or not, and whether we like it or not, electronic commerce is a limited reality today with great potential for tomorrow. There is a limited window of opportunity to develop simple, ubiquitous, and efficient technical solutions to technical or perceptual problems such as simplification of the user interface, security, and privacy. Advanced research programs and new technology providers will be very important in ensuring that we develop interoperable technical solutions; the alternative is the development of proprietary point solutions that are globally inefficient and unreliable for both people and their information systems. Industry/government partnerships such as this ATP Focused Program are particularly important to encourage the development of new technologies that may involve very high risk.

TECHNICAL AND BUSINESS SCOPE

Activities that may be supported by ATP include:

• The development of technologies leading to their implementations as infrastructure services to provide security and privacy; information and meta-information (e.g., ontology) storage, search, and retrieval; filtering, organizing, and summarizing; migration of legacy information; and business-to-business and consumer-to-business operations.
• The development of tests and critical demonstrations of technologies and their implementations as efficient services.
• The development of a trusted technical and organizational infrastructure to provide security-related services such as the distribution of public keys and smart cards.
• The development of a trusted technical and organizational infrastructure to provide interoperability-related services such as testing and certification.
• The development of industry consortia and other fora for cooperative requirements analysis, research, development, testing, and demonstration.⁽⁵⁸⁾

Activities that will not be supported by ATP include:

• The development of point solutions (e.g., a proprietary markup language).
• The development of information infrastructure components that are rapidly advancing independently of this program (e.g., basic technologies for communication among networks, database systems, etc.).

Project proposals must clearly establish that the technical goals are critical to interoperable electronic commerce and are unlikely to be accomplished in a timely manner without ATP support.

Endnotes

1. The Advanced Technology Program would like to thank Dr. David K. Jefferson for his thoughtful and substantial contribution to this White Paper.

2. "Automotive Extended Enterprise: Making the Case for Electronic Commerce," Jack White, Director, Center for Electronic Commerce, ITI, Defining the Advanced Technology Challenges of the Electronic Commerce Marketplace, March 9-10, 1998, NIST, Gaithersburg, MD. See http://www.atp.nist.gov/elec-com/bus-mod/whitendx.htm

3. See http://www.fedex.com

4. "FedEx: Using the World Wide Web Worldwide," Sanjay Gupta, Managing Director, Electronic Commerce & Logistics Marketing, FedEx, Defining the Advanced Technology Challenges of the Electronic Commerce Marketplace, March 9-10, 1998, NIST, Gaithersburg, MD.

5. "The New Economics of Information," Howard Frank, Dean, University of Maryland Business School, Defining the Advanced Technology Challenges of the Electronic Commerce Marketplace, March 9-10, 1998, NIST, Gaithersburg, MD.

6. Refer to a NIST report, "Computer Integrated Knowledge System (CIKS) for Construction Materials, Components, and Systems: Proposed Framework" for a discussion of some of the construction industry's requirements.  See http://www.ciks.nist.gov

7. "Web's Vastness Foils Even Best Search Engines," The Wall Street Journal, Friday, April 3, 1998, p. B1.

8. Industry White Papers are discussed in the section on Strong Commitment of Industry.

9. See http://www.atp.nist.gov/elec-com/giga/gigandx.htm

10. Giga IdeaBytes, Doc. No. 091819-ER98, 03/12/98

11. http://www.atp.nist.gov/

12. See http://www.atp.nist.gov/elec-com/ec_off.htm

13. See http://www.atp.nist.gov/atp/conf/03-98ecc.htm

14. See http://www.atp.nist.gov/elec-com/cnet/cnet001/jslide65.htm

15. "Bank Mergers' Hidden Engine: Technology," The Wall Street Journal, Thursday, April 23, 1998, p. B1.

16. "Market failure" is a term which describes the theoretical reasons for an under investment of private capital relative to the potential national benefit possible with a larger investment.

17. Some of the applications may involve sensitive information of a non-commercial nature. For example, John Silva, Defense Advanced Research Projects Agency, made the point in his presentation at the workshop that electronic commerce technologies are needed in clinical trials. See http://www.atp.nist.gov/elec-com/interop/silvandx.htm.

18. Prof. Venkatesh Shankar, University of Maryland, made the point in his presentation at the Changing Business Models Track that, for most companies, the "Web site is a digital replica of the marketing department"; the objective is "An enterprise wide focus on being customer-centric." See http://www.atp.nist.gov/elec-com/bus-mod/shankndx.htm.

19. Robert Neches, USC/ISI made the point in his workshop presentation on "The ISI Distributed Collaborative Enterprises Group: Information Overload Issues" that the real objective of agile resource management is "support for the configuration process, not just the search"; see http://www.atp.nist.gov/elec-com/overload/nechndx.htm.

20. Business Week, March 16, 1998, pp. 98-102.

21. Robert O'Harrow Jr. and John Schwartz note in "A Case of Taken Identity: Thieves With a Penchant for Spending Are Stealing Consumers' Good Names," The Washington Post, May 26, 1998 that "Online information brokers and credit services, for example, make it easier than ever to obtain once-private details about people. At the same time, Social Security numbers, birth dates, maiden names and other personal details are increasingly used to verify the identities of people who bank, buy things and conduct other personal business over the telephone and on computer networks."

22. For international comments on security and privacy by the Organization for Economic Cooperation and Development see http://www.oecd.org/dsti/sti/it/secur/index.htm.

23. "Automotive Extended Enterprise: Making the Case for Electronic Commerce," Jack White, Director, Center for Electronic Commerce, ITI, Defining the Advanced Technology Challenges of the Electronic Commerce Marketplace, March 9-10, 1998, NIST, Gaithersburg, MD. See http://www.atp.nist.gov/elec-com/bus-mod/whitendx.htm

24. For example, the DoD has established a Joint Electronic Commerce Program Office; see http://www.acq.osd.mil/ec/

25. A service is an interface that provides data and/or performs some function in response to specific requests; a service may operate continuously (e.g., an alert) or when specifically invoked. A service may be provided by any combination of data, software, computer hardware, other types of hardware, media, people, etc.

26. See http://www.atp.nist.gov/elec-com/sec-pay/koop.htm for a workshop presentation by Dwight Koop, Chief Operating Officer, SigNet Assurance Company, on automated adjudication.

27. In his keynote address at the workshop, Phil Mellinger, Vice President, Public Key Technology, First Data Corp, identified salable crypto-algorithms as the #1 technical challenge in electronic commerce. See http://www.atp.nist.gov/elec-com/firstdat/fdatandx.htm

28. "Technology Perspectives for Information Overload," Erik Mettala, Vice President, Advanced Programs, Microelectronics and Computer Technology Corporation, Defining the Advanced Technology Challenges of the Electronic Commerce Marketplace, March 9-10, 1998, NIST, Gaithersburg, MD.

29. See http://www.atp.nist.gov/elec-com/overload/yeshndx.htm

30. Cory Casanave, President, Data Access Technologies, emphasized the importance of component integration in his presentation on "OMG Business Object Component Architecture" at the workshop. See http://www.atp.nist.gov/elec-com/interop/coryndx.htm

31. "Security and Payment Technologies," Anup K. Ghosh, Research Scientist, Reliable Software Technologies, Defining the Advanced Technology Challenges of the Electronic Commerce Marketplace, March 9-10, 1998, NIST, Gaithersburg, MD.

32. See the Changing Business Models Summary, http://www.atp.nist.gov/elec-com/bus-mod/comndx.htm

33. "Advanced Technology Challenges in Electronic Commerce," Phil Mellinger, Vice President, Public Key Technology, First Data Corp, Defining the Advanced Technology Challenges of the Electronic Commerce Marketplace, March 9-10, 1998, NIST, Gaithersburg, MD.

34. Robert O'Harrow Jr. and John Schwartz note that "Online information brokers and credit services, for example, make it easier than ever to obtain once-private details about people. At the same time, Social Security numbers, birth dates, maiden names and other personal details are increasingly used to verify the identities of people who bank, buy things and conduct other personal business over the telephone and on computer networks." 'A Case of Taken Identity: Thieves With a Penchant for Spending Are Stealing Consumers' Good Names,' The Washington Post, May 26, 1998.

35. An ontology provides the context and semantics of terms and their interrelationships.

36. Ontology research and the study of meaning were discussed at the NIST-hosted "Terminology and Related Topics in Data and Knowledge Sharing Workshop," July 29, 1997. Context and semantics are required to understand meaning; a Web browser's lack of context can produce results that are very amusing to people, but not very good for automating a business.

37. "Agents on the Move," Patricia Morreale, IEEE Spectrum, April 1998, Volume 35, Number 4, pp34-41.

38. For the "Agents List and Archive" see http://www.cs.umbc.edu/agentslist.

39. For research papers and a prototype see http://ecommerce.media.mit.edu/.

40. "Region/Industry Economic Development Initiative: Electronic Commerce for Competitive Preeminence," Microelectronics and Computer Technology Corporation, December 24, 1993.

41. "Improved Competitiveness for the U.S. Construction Industry through Advanced Electronic Commerce and Business Integration," Bechtel Corporation on behalf of the Process and Construction Industry for STEP Consortium, December 14, 1993.

42. "Secure Data Interchange System Consortium using 'CommerceNet' as the Enabling Infrastructure," National Semiconductor, December 17,1993.

43. "Technologies for Virtual Enterprises: A proposal for a NIST ATP," National Center for Manufacturing Sciences, July 29, 1994.

44. "AMSE: Agile Manufacturing Systems Engineering," Industrial Technology Institute, July 15, 1994.

45. "ATP Program Idea: Database and World Wide Web Integration," Cartermill, Inc.; Johns Hopkins University; Technology Concepts and Design, Inc.; and Corporate Technology Information Services, Inc., September, 1994.

46. "Developing Critical Infrastructure Elements of an Electronic Marketplace for US Small Businesses and State and Local Governments," Datamatix, Inc., October 11, 1994.

47. "Integrated Knowledge Management," EPRI, January 12, 1995.

48. For a relevant project from the 1997 Information Infrastructure for Healthcare Competition see http://www.atp.nist.gov/www/comps/briefs/97030061.htm (data mining)

49. For relevant projects from the 1997 General Competition see

• http://www.atp.nist.gov/www/comps/briefs/97010087.htm (data mining)
• http://www.atp.nist.gov/www/comps/briefs/97010193.htm ("common sense" knowledge)

50. For relevant projects from the 1997 Component-Based Software Competition see

• http://www.atp.nist.gov/www/comps/briefs/97060005.htm (software security)
• http://www.atp.nist.gov/www/comps/briefs/97060008.htm (business services)
• http://www.atp.nist.gov/www/comps/briefs/97060023.htm (semantic modeling)
• http://www.atp.nist.gov/www/comps/briefs/97060032.htm (business services)

51. For relevant projects from the 1997 Technologies for the Integration of Manufacturing Applications Competition see:

• http://www.atp.nist.gov/www/comps/briefs/97050011.htm (business services)
• http://www.atp.nist.gov/www/comps/briefs/97050018.htm (software agents)
• http://www.atp.nist.gov/www/comps/briefs/97050020.htm (software agents)
• http://www.atp.nist.gov/www/comps/briefs/97050023.htm (software integration)

52. For a relevant project from the 1997 Motor-Vehicle Manufacturing Technology Competition see http://www.atp.nist.gov/www/comps/briefs/97020014.htm (software agents)

53. ATP Focused Program Competition 98-04, Digital Video in Information Networks, U. S. Department of Commerce, Technology Administration, National Institute of Standards and Technology, December 1997.

54. https://www.esa.doc.gov/1998.cfm

55. See http://www.atp.nist.gov/elec-com/bus-mod/mosesndx.htm

56. Jeffrey B. Ritter, Director, ECLIPS, made the point in his workshop presentation on "Facilitating Interoperability and Electronic Commerce" that "Interoperability is a Resisted Force -- Commercial Interests will protect their proprietary advantage and monopoly unless the economic benefit of connecting outweighs the costs of not doing so [or] compelling pressure from sovereign powers threatens a company's franchise."

• See http://www.atp.nist.gov/elec-com/interop/ritter.htm.

57. Summary of the Information Overload Track by Erik Mettala, Vice President, Advanced Programs, Microelectronics and Computer Technology Corporation, Defining the Advanced Technology Challenges of the Electronic Commerce Marketplace, March 9-10, 1998, NIST, Gaithersburg, MD. See http://www.atp.nist.gov/elec-com/overload/iosumndx.htm

58. Cooperative projects may be very valuable to determine what is workable and what is marketable, but they should not unduly restrict choice. Consumers and businesses may want to be able to choose among functionally similar services that offer different costs and risks--e.g., additional processing time to encrypt with a long key may or may not be outweighed by the sensitivity of the protected information.

Date created: February 1998
Last updated: April 11, 2005