Moving Towards Chapter Three

Okay, everyone knows that the Net is changing everything . . . that's old news. The savvy companies are already asking themselves: what comes next? Chapter Two of the Internet will be about the mass proliferation of e-services.

—The Hewlett-Packard Company

Today, much of the world economy is dominated by the service sector. In the U.S., approximately 78% of the labor force, 73% of the GDP, 45% of an average family's budget, and 32% of exports are accounted for by services (Bateson and Hoffman, 1999). One of the changes driving service economy growth has been the phenomenal advance in computer technology and the Internet. Sometime around 1996, the commercial obsession with the Internet began (Turban, King, Lee and Viehland, 2004). Thousands of businesses, customers, employees and partners were connected to one another and began conducting business processes together online. Hewlett Packard refers to this period as "Chapter One" of the Internet (Galbreath and Hoffman, 2001), during which the foundation for growth was established by building infrastructure and providing access and capabilities to facilitate further evolution. In this initial chapter of Internet evolution, users were socialized to the processes of:

• Do-it-yourself
• At your desk
• On a PC
• Tapping into Web storefronts
• Using monolithic applications
• Where Information Technology is viewed as an asset

"Chapter Two" of the Internet is now being drafted. In contrast to the monolithic do-it-yourself functionality of early Internet use, the current phase of Internet evolution is about what the Internet can do for customers, via the proliferation of e-services. In comparison to common user expectations during the previous phase of Internet evolution, Chapter Two of the Internet concerns technology working for the users, who expect the processes of:

• Do-it-for-me
• While I am living my life
• On PCs, devices, and things
• Through the use of automated e-services
• Using modular e-services
• Where Information Technology is viewed as a service

Essentially, the utility of the Internet is evolving from an asset-based economic model to a service-based model (Pitt, Berthon and Watson, 1999), as Internet functionality evolves to provide on-the-go utility to ever more demanding and sophisticated users. Consequently, e-services have burgeoned in the past few years as major players and small businesses alike rush to engage in this new economic model of e-commerce.

E-services are electronic offerings available via the Internet that complete tasks, solve problems, or conduct transactions. They can be used by both consumers and businesses. E-services offerings can use personal data to simplify aspects of consumers' lives that involve information, or they can simply serve as "functionality for hire" for corporate IT departments (LaMonica, 2001). On the provider side, companies can develop e-services to improve relationships with customers, as well as generate revenue. For customers seeking on-demand functionality, e-services can greatly reduce the cost of IT operations. From this viewpoint, an e-service is any asset that is made available via the Internet that creates new efficiencies and new revenue streams. In an Internet context, the term "asset" can include any software application that is placed on the Internet and made available as an app-on-tap. Short for "application-on-tap," the app-on-tap concept refers to e-services that are immediately available for rent on the Internet.

E-services generally include both the desired user application and the necessary infrastructure to deliver it, so there is also the implication of application support; hence, it may be best to integrate service quality considerations from the marketing literature into the emerging e-services paradigm (Watson, Pitt, and Kavan, 1998). Still, marketers are only now beginning to understand the distinctive nature of service as compared to product offerings, and in the IS field, the assessment of systems and their performance characteristics have generally been made under a product-based conceptualization (Pitt, Watson and Kavan, 1997).

The sheer growth of market opportunities to provide e...