Traffic Building

Learning by doing - includes related articles on retailing on the World Wide Web - electronic commerce quickly growing and becoming more manageable -

The IS pros who man the big Web storefronts aren't waiting for business-school case studies to tell them how much server capacity to assign.

In an era of rampant Internet hype, a recent Forbes ASAP article put it best when it asked, "Does Amazon.com Really Matter?" Is the company, the author asks, "just a freak of commerce?"

It's the spark for an interesting debate. Although most online enterprises have yet to distinguish themselves by turning profits, there's no denying that E-commerce has been doing so well that retailers ca t keep up with the sales volumes. And the market projections indicate that in just about every retail category, sales growth is exploding.

Case in point: At Recreational Equipment Inc. (REI), a 60-year old outdoor equipment mail-order company with 50 retail stores and more than 1.2 million cooperative members, Web site sales increase at least 30% a month, and sometimes as much as 100% from month to month.

For the IS departments behind those inviting electronic storefronts, it's a huge straggle to keep up with such staggering demand. They've got to ensure that demand doesn't outstrip server capacity or available bandwidth. They must make sure that spike loads generated by sales specials don't crash the system. They have to find the programming staff to customize their online shop windows and transaction packages, and much more. Running enough server power to handle myriad page hits and online transactions isn't easy -- "it's almost a full-time job just upgrading," says Matt Hyde, REI online store manager. Seattle-based REI, which like most online retailers ventured into electronic commerce cautiously and made hardware choices prudently, had to upgrade its IBM RS/6000 Unix servers three times in the first year of business alone.

Frequency of upgrades is also a big concern at $406 million New England Circuit Sales Inc. (NECX). Based in Peabody, Mass., NECX is the largest independent buyer and seller of electronic components, computer products, and networking equipment worldwide. On average, 20,000 people visit the site each day to look at some of the 200 million products offered, all of which have realtime prices tracked. So NECX is very careful about keeping tabs on its hardware, while forecasting usage. In general, "we like to keep everything at 50% below capacity -- or actually 20% or 30% -- and as we see things growing we make necessary changes," says Judy Ashley, the reseller's director of IS. Her team members have to walk in the business managers' shoes, since deals between today's online companies can easily create a spike in traffic just one week later. Unless it's in the thick of things, IS just can't respond fast enough.

Companies such as NECX, which claims to have created the first online E-commerce system in 1993, and REI, whose online store was honored this spring by the Smithsonian Institution and inducted into its permanent IT Innovation collection, provide valuable insight into how to run an E-commerce business, because they're not relying on any established business model. "The only way you can learn is by doing it. There's no Harvard Business School case study that says, 'This is how you're an E-commerce business,'" notes Brian Marley, general manager of NECX Online Exchange.

That doesn't mean that IS staffers are deaf to outside input. "I go a lot of places, from Forrester Research to the Gartner Group to listening to our own business development people. I subscribe to a lot of electronic newsletters; I watch our competitors. There's no one single source," says Ashley of NECX. Gut feelings get a lot of attention in this business.

So too does raw data on the site itself. The basic requirement for a Web site is to know exactly what's happening on it; all information is important. "We monitor everything down to referrer statistics (any partnerships we have), how many unique users we're getting, how many unique pages they're getting. We monitor our T1 lines on a regular basis. And the unique host hits, so we don't have any surprises," notes Ashley. With rising numbers of page hits, NECX recently added a third T1 line.

At NECX, every system has an alarm that is triggered if the system goes beyond a certain capacity. Although 50% capacity is the general alarm point, the figure is even lower for aspects such as processing power and bandwidth.

The decision to upgrade can't be made on the spur of the moment. When it comes time to install a new Sun box running Netscape SuiteSpot, it isn't quite plug-and-play. "The network guys would like to think it's that easy," notes Ashley. Even if it's not a piece of cake, NECX can have a new server up and running in 24 hours -- less if it's onsite. NECX currently has three Sun servers, and if there's one thing that's surprised Ashley, it's that "server capacity continues to be lower than what we in IS thought