Open Source and Open Standards in E-Commerce - Essay Example

OPEN SOURCE AND OPEN STANDARDS IN ECOMMERCE The paper intends to provide a critical evaluation on two concepts that have enormous impact on the manner electronic commerce is currently and will likely be handled in the future: open source and open standards. The paper also aims to explain typical misconceptions and clarify fundamental terms that are instrumental in the further understanding of the subject. The exponential growth of information and communications technology (ICT) is giving rise to new questions and potential challenges regarding its effect to electronic commerce that eventually directly affect not just the simple consumers, but also the governmental and industrial sectors. The commonness of digital technology and devices, computers and networking is rapidly and drastically changing lifestyles, cultures and societies as a whole. Currently there is a heavy reliance on computer networks, computers and fully-functional information structures by both small and major businesses. Generally speaking, a majority of the population has become dependent on the use of digitally enabled devices like mobile phones, personal digital assistants (PDAs), computers/laptops, digital music players and more importantly the internet in their daily schedules and work. The digital revolution that today's population are experiencing will have a lasting and major consequence on the evolution of future societies, since the management of knowledge and information systems are and will continue to be handles by computers and digital devices. The emergence of concepts like open standards and open sources also force other issues like intellectual property, resource sharing and control, software standards, hardware standards and network standards to also surface. It is imperative to identify the two concepts being discussed in order to assess their direct impact in terms of electronic commerce. Open standards and OSS represents a departure from the usual model followed by companies that handles proprietary software as it is a paradigm shift towards opening innovations through shared knowledge and information between software developers and consumers (Committee for Economic Development (CED) 2006) INTRODUCTION WHAT IS ELECTRONIC COMMERCE Electronic commerce (ecommerce or EC) by and largely center on the means and resources needed or required in order to trade product and services using the internet as a standard or location for exchanges and business transactions (CED 2006). Similarly, electronic business (EB) normally pursue similar goals and structures, the only difference is its tendency to concentrate more on the internal processes taking place in the business and its various components within the enterprise. Both are targets by many software and information sellers and companies, developing specific commercial systems that will manage and further enhance the type of business process (CED 2006).. A definitive example of a business entity that uses efficient and straightforward ecommerce processes is Amazon.com, which allows a good representation of the particular shopping experience by presenting to the customers a good selection of what is on offer within the site (through its catalogue-style interface), online cart and purchase transaction and its option to view the progress and status of the process (CED 2006).. OPEN STANDARDS AND OPEN SOURCE: A DEFINITION Open standards refer to the set standards that knowledge/information systems and services require. These standards enable diverse companies to produce compatible and transposable products and devices. This "openness" is influential in boosting healthy competition, better commerce and eventually better consumer satisfaction. TCP/IP, HTML and ANSI C are some of the examples of devices that represent open standards. But the definition of the concept also varies and subject to varying interpretations. Therefore there is a need to standardize and update the concept of open standards (CED 2006). On the other hand, open source is a method or system that directly impacts the management and the way software is distributed. Unlike proprietary software, open source software allows users to freely access the program's source code, alter it based on specific needs or specifications and redistribute the improved version of the program (Weber 2004). In one aspect, open source software (OSS) is comparable if not equal to free software, only with a different motivation. Many developers consider OSS as a more appealing approach than proprietary software because it addresses significant aspects of ecommerce: OSS is more pliable technically and cost-effective. A good example of open source software currently used in the market is Linux (Weber 2004). However, it is important not to confuse that the two concepts are one and the same, although have similar facets. Open standards are more concerned on the principles that affect ICT and ecommerce whereas OSS is centered on the distribution approach of software. Like OSS, open standards lessens the dependence or confinement of consumers to proprietary software and ultimately level the software market. Open standards is also vital in the promotion of the interchangeability of OSS and proprietary programs, current and legacy, harnessing the efficiency of a mixed information/systems technology milieu (CED 2006). THE IMPACT OF OPEN STANDARDS Many studies have concluded that the remuneration and overall benefits acquired are numerous if organizations follow, procure and implement electronic commerce processes that are based on open standards. Many companies and organizations realize that the possibility of being confined or cooped up with a vendor or a particular technology. Because of open standards' open specifications, it is always feasible to obtain the services and technological know-how of one party to employ and execute the resolutions that adhere to the specific principles being followed (CED 2006). Another important benefit is the interoperability and intercommunication of different systems that are produced by different vendors with one another, resulting in a streamlines and efficient swapping and exchange of data (CED 2006). Significantly, it is no longer important to use the same program or a specific software from a particular seller to interpret and write data files. For instance, if a multinational corporation calls for its worldwide offices to use applications that can access and create files using a form of an open document format, i.e. open document format - XML-based file, it is allowing its various individual offices to have the option to be flexible in choosing a program that is tailored for the unit's needs while concurrently maintaining the same standards and inoperability within the other units in the enterprise (Hoe 2006). The use of open standards also provides better security of the information stored in its data files as it is shielded from being obsolete unlike the usual proprietary programs that are subject to be outdated within a specific time. Also, using open software mitigate the possibility of data conversion to a more updated format if the data files were created using proprietary software. Using open data formats supported by open standards allow the user to be able to use legacy data using open systems or make the conversion of the data easier (Hoe 2006). Adhering to open standards stimulate better ecommerce and traditional trading because more choices can be developed and be made available into which could be participated in by various sellers/vendors thus presenting the most cost-effective solutions that could be customized based on the current needs of an organization. The pursuance of open standards also promises the benefit of easier transference from one platform to another because the basic execution and procedures follow standard guidelines, rules and interfaces. In contrast, proprietary software and accompanying proprietary standards give insufficient information (Hoe 2006). The benefits that could be gained using open formats are particularly huge. For example, national or federal governments may end up paying an exorbitant amount in to transfer or upgrade its electronic data files that it wanted to be made available to the public online. If the organization has adopted an open-standard approach in managing the enormous amount of data available electronically, it will avoid migratory expenses, lessening operational expenses in its file archives (Hoe 2006). From another standpoint, the adoption of open standards by private and government institutions is highly encouraged by many. In the current digital revolution, institutions and organizations necessitate the need for sufficient and dependable information to effectively administer its ecommerce productivity. It is crucial that the implementation of the ecommerce process make use/utilize open standards approaches as much as possible (Hoe 2006). If there are bigger and widespread participation of firms, particularly the technology-driven consumers, the more probable that the open standards encourage market competition. It is also imperative that policy-makers should also get involved, particularly in the areas where there are questions regarding the involvement of privacy and security issues. The more involved the policy-making bodies are, the greater the possibilities of the prevailing standards reflect the needs of the market and the end-users. This involvement may also fuel the standardization that will reflect the needs and requirements of a broader set and eventually be facilitated by the Internet and boost electronic commerce (Hoe 2006). However, there are certain dilemmas and challenges ahead. Adopting open standards will also increase potential delays and hindrances in reaching an accord. The exchange linking open standards and the time requisites in order to arrive at suitable agreement is principally troublesome in episodes of fast technological advancements, wherein standards may be obsolete by the time they are implemented. Many of foremost innovations have suffered under this scenario, notable examples are the C# and Java platforms developed by Microsoft and Sun Microsystems respectively (Hoe 2006). Since open standards assist in market competition among vendors and developers alike by minimizing hindrances in access, most customers who wish not to be tied to proprietary licenses, products and services from one controlling proprietary firm, there is a threat that the proprietary firm may opt not to join an accord supporting open standards pertaining to a particular technology, choosing instead to avail of an exit mechanism or simply go out of business (Hoe 2006). Furthermore, there are also techno sellers that are more attracted to proprietary standards that open standards, particularly if they think that the economic returns are greater. An example of this is de facto standards that are patterned after proprietary technology. De facto standards are more attracted to some because their benefits and have already had been certified as revenue generating by existing market standards (Hoe 2006). A great example is the extensive use of the Word format as a format that allows many users to exchange word processing data, thus establishing its overall success in this market and product segment. This success and establishment as a de facto standard have made other would-be participants wary to develop a similar product that is based on open standards because Microsoft may further exploit its position against them (Hoe 2006). RECOMMENDATIONS Establishing open standards is vital in the organization of better electronic commerce, fostering neutrality and a significant reduction in the cost of integration in the enterprise side while instilling further acceptance in the market on the vendor side (CED 2006). But since there are existing problems in adopting open standards, i.e. uncertainty, connectivity/ linkages of existing standards and the time hindrances in reaching a conformity/accord (CED 2006). It is important to take into consideration that interoperability should be prioritized more over conformity. To resolve these gaps, it is imperative to homogenize open standards by opening specifications and functionality Policy-giving bodies should encourage rather than dictate open standards, notably in fast-growing technologies and infrastructure because of its extensive effect in stimulating economic and market competition. In addition, these institutions should help in the disclosure and assertion of intellectual property issues in order to facilitate advancements and innovation. Adding incentives and limiting the filing of damages by claimants. THE IMPACT OF OPEN-SOURCE SOFTWARE The ascending trend of OSS worldwide in terms of development, deployment and popularity has drawn the interest and curiosity of the private and public sectors. This intense scrutiny has also commenced the competition between OSS developers and corporations dealing with proprietary software, enlightening the consumer market with the strengths and weaknesses between the two camps. The competition has also resulted in the refinement and recognition of OSS' presence as an alternative to proprietary software for use in their respective organizations (Weber 2004). OSS is basically from one viewpoint is free software, but not in terms of the financial aspect. It is considered free because it allows the user the liberty of running, altering, improving and redistributing the program based on a configurable source code, the primary precondition of this paradigm (Weber 2004). In simpler terms, open-source software can be explained by this: a software programmer or software developer initiated the development of a base or foundational version of a program and in the process of distributing the said product, the company has also released the source code for the consumers or other developers for customization and modification (Weber 2004). The source code is the fundamental code written in a selected and native programming language before it is compiled into a binary format that is understood by the computers that will run and interpret the program. It is the program that could be interpreted by programmers and developers, a code that would instruct the hardware in executing the program. In contrast to proprietary software, the source code is not distributed for the use of end users (Weber 2004). Contrary to the assumption, the release of the source code also comes with a license that could be obtained from an overseer that will grant the consumer/ buyer specific rights to possess, alter, redistribute and compile the source code. Unlike proprietary licenses, the customer does not have access to the source code and was only being given a proprietary right to use the said software. The software could not be altered nor distributed (Weber 2004). BENEFITS OF OSS This inability to obtain and modify the underlying source code is the primary weakness of proprietary software that is exploited by OSS. The concept of OSS gives the option to bridge the gaps and join together the development efforts of both programmers worldwide and software developers that offer marketable services - i.e. custom-made/tailor-fit systems, product enhancements, fixes and support (Fuggetta 2003). Organizations, whether private or public can take advantage and benefit on the cost-cutting measure and growing, expansive appeal of OSS. An organization which has chosen to use OSS could still have the benefits associated with most users like the internet, use of a talented programmer pool, efficient and reliable testing system, quick development phase, low overhead and operational costs and customer satisfaction (Fuggetta 2003). In the case of the internet, the infrastructure has allowed developers to build OSS systems that contribute and leverage the playing field in the area of electronic commerce. A testament of this is the ability of any FTP/web-based server system to act as a share end, an option that is economical, efficient and fast. Open-source has also added to the betterment of the web architecture. Examples of these are TCP/IP stacks, scripting languages, DNS, to name a few. Without these open-source tools, the development of the Internet would have been severely hindered (Weber 2004). In terms of human resource, the paradigm of open-source attracted an interesting mix of talented programmers and developers whose varied viewpoints and outlooks lead to better software development in the long run. In comparison, proprietary software distribution has led to higher operational costs for many organizations because of the need for experienced programmers (Weber 2004). There is also a high attrition rate for programmers, as many have a dislike for organized or institutional working environments. The use of open-source technology also allowed wider testing under different frameworks or contexts, leading to better program execution. It was also observed that organizations that use OSS can build and fix new software faster because of the option to seek the assistance of outside developers, a definite opportunity gain for the customer (Weber 2004). In terms of finances, an organization which adopted OSS enjoys lower overhead and minimal operational costs because of the infinite availability of talented programmers and possible outsourcing options. The ability of an organization to respond to the immediate needs of the consumers through quick fixes or similar scenarios/issues eventually will result to increased customer satisfaction (Weber 2004). In addition, OSS democratizes and levels the playing field because its use allows smaller organizations to participate in better ecommerce processes/projects and providing the end users with more options and choices to decide on (CED, 2006). However, there are certain challenges that an organization will face if they deemed to use an OSS approach in handling their electronic commerce and enterprise needs. It is important to acknowledge that OSS is a commodity and whatever competitive advantage that an organization can obtain is dependent on the accumulation of other added value to the end user, i.e. prompt and extensive support and distribution channels (Weber 2004). In terms of scalability, an organization harnessing and developing OSS must reflect on the growth projections and action plan in dealing with the influx of demand. An OSS-focused organization can address this challenge though a well developed business plan and thrust, realizable marketing strategies (Weber 2004). Another downside in adopting an OSS system is sustainability. An organization should anticipate the importance of reliable customer support, a vital aspect for the success of any offered product or service. There is also the question of profitability. How can an organization using OSS be profitable Proper planning is always fundamental in ensuring positive profitability levels. To cite an example, Red Hat has been highly profitable and successful in open-source distributions (Weber 2004). Manageability is also a serious consideration in migrating to an OSS system. The organization should contemplate on its ability of delivering consistent quality in terms of its ecommerce enterprise. However, this issue is mostly a major concern for start-up companies. Proper reference and documentation that can easily be understood by the average consumer helps manage this possible problem. There is also the principle that since source code is open to everyone, it entails that everybody knows the workarounds and secrets of the program. However it is important to understand that the service and other value additions that will spell the difference with the competitors (Weber 2004). RECOMMENDATIONS It is to the advantage of an OSS-centric organization to consider the possession of the source code as an article for trade and not a competitive plus over the competition. From a business outlook, there is nothing magical or special in having OSS. It is not a cure all but it should not be dismissed either. Rather, the source code can be used as a tool to enhance an organization's electronic commerce process; simply a new way of building, developing, distributing and modifying software to the customized needs of the institution as a whole (Weber 2004).. The paradigm of implementing open-source technology in organizations that realize and recognize the trend and the impacts of the concept in terms of economic, societal and political aspects, the model provide the assurance of better business/commercial survival and the promise to prosper in an increasingly demanding environment of electronic commerce (Weber 2004).. It is therefore advisable and prudent for any organization considering shifting to OSS to weigh its options, identify competitive edge, and assess its current assets (human and other form of resources), target market, current business trend/environment, distribution options, customer service and marketing thrust (Weber 2004)... On the other hand, it is also important to involve policy makers in the development of policies that can enhance the growth of OSS. This need may be addressed by heightening the awareness of policy-making bodies regarding the potential benefits of OSS and the accessibility of market-tested and highly supported OSS applications. Linkages with educational institutions are also a good way of fostering and ensuring a continuous pool of developers and talents and should therefore be encouraged (Weber 2004)... CONCLUSION The overall remuneration and benefits arising from the incorporation of open standards and the use of open-source software are become more evident and is projected to maintain an upward trend as economies, institutions and organizations discover and use the accompanying capabilities associated with up and coming information technologies and advancement. As expected, these technological benefits are continuously testing conventional and straight-forward perception of innovating processes and products and the underlying motivations that stimulate these changes. Open standards and OSS re actively advocating different methods of handling processes based on the prevalent trends in the digital world (CED 2006). The establishment of open standards is vital because of the convergence of ICT, the Internet and commerce. Interoperability is the operative word because there is no singer developer or available technology that can single-handedly supply or provide for all the needs of the market. To achieve an elevated awareness and degree of interoperability, it is essential for developers and producers to stringently follow standards and specification. Open standards are also preferred my groups because of the policies are unbiased, open to changes and non-dependence (CED 2006). In many instances, the linkage between open standards and OSS is unmistakable and in many cases, successful implementations of OSS are based on open standards. The initiatives of many countries towards the localization and the pursuance of OSS are seen as a step in making open standards more accessible in the development and growth of electronic commerce and ICT. The increasing number of private and governmental institutions interested in the area of open standards and OSS are good indications of acceptance of the two concepts (CED 2006). Open-source software, in another aspect gives more freedom to the user. It provides an inverted approach to managing software. Instead of providing control in the hands of the developers/creator of the program, the concept of OSS centered on the right of the consumers and the buyer's right to access, alter/modify, share and redistribute the original source code or customized software developed in using the said source code. OSS aims to share its fundamental code rather than closing its doors to reinvention and the possible enhancements. This is so because unlike traditional, proprietary software that tends to give the creator all the incentives and possibilities to innovate, OSS in contrast believes and is oriented in consequential innovation (Weber 2004). The two concepts of OSS and open standard are complex and produce varying issues, topics and considerations. In the context of open standards, it is important to always consider it as a means of guaranteeing interoperability and smooth exchanges from one system or format to another. Open-source on the other hand promotes liberty from proprietary mechanisms that hinder growth and potential. On a final note, the relationship between these two distinct yet linked concepts are important and is worthy of careful study and consideration and that the openness, liberties and freedoms it advocates stays true and continue to develop in the future (Hoe, 2006). REFERENCES Committee for Economic Development (CED), 2006. Open Standards, Open Source and Open Innovation. Committee for Economic Development: Washington D.C. Fuggetta, A. , 2003. "Open source software: an evaluation". Journal of Systems and Software, Vol. 3, No. 6. Hoe, Nah Soo, 2006, Free Open Source Software and Open Standards, United Nations Development Programme - Asia-Pacific Development: India. United Nations Conference on Trade and Development (UNCTAD), 2003. E-Commerce and Development Report. United Nations: New York. Weber, Steven, 2004. The Success of Open Source. Harvard University Press: Cambridge, MA. Read More