DD Phan/Information Management 40(2003)581-590 of the 128-bit encryption technology a necessary step applications in the value chain model at Intel are to trust Intels e-business system, especially in nations presented in Fig 3. Major successes are where e-business is relatively new Intel moved uSs 1 billion dollars in revenue to its with the 128-bit encryption model resolved, the project moved forward to deploy the pilot system on-line e-business system in the first 15 days, During the first month of deployment, Intel found that surpassing the companys initial goal of doing this rypted file transfer was very sensitive to packet los in the first 3 months when using SSL security. When packet loss rate The company was able to eliminate most faxes to its exceeded 15%0, the download times for encrypted customers worldwide. For value chain partners in pages skyrocketed. It was critical for Intel to reduce Taiwan alone, this eliminated 45,000 faxes per the packet loss rate to successfully deliver its e-busi- quarter. This produced significant cost savings for ness system. In addition, most of the transmission Intel and its value chain partners in reduced inter- problems at customers national long distance phone costs. onnection between customer's workstations to end After the first month of deployment, Intel continued offices and tandem offices of the telephone compani to receive USS i billion value of orders on-line each One solution was to reduce the number of elements month for the rest of 1998 that had to be transferred through the network. this Independent customer surveys rated Intels e-bus ness at a 94% satisfaction level was done by using data compression and redesigning Intel became the eighth most profitable company in the web pages so that only compressed data had to be transferred. Another solution was to improve connec- the us in 1999 and climbed to the fifth in 2000 tion quality and increase bandwidth between custo- Amid the collapse of many dotcoms and click-and- mers sites and the tandem office. with some mortars in recent years and the 2001 recession, Inte incentives, Intel urged all of its value chain partners remains profitable and retained the value of its to upgrade their connections to ISP servers with high equity. For the year 2001, Intels income was bandwidth pipes and high speed network and routers. USS 1.29 billion. At USs 211 billion. Intel was Despite the strong encryption technology that was the seventh largest US company in market capita- used worldwide within Intels value chain of partner lization values at the end of 2001 [1, 16 ship, Intels choice of Pentium servers and windows Many of Intels employees who participated in the perating systems created some security concerns development of the e-business system continue to System security is only as good as the weakest link receive promotions many years after its successf in the security chain. At Intels e-business system, the deployment. Sandra Morris was promoted to the weak links include Microsoft Windows Operating Sys tems and windows nt networks. Problems caused by hackers on windows-based web-servers are common- 3.9. Lessons learned and success factors place. Fortunately, Intel conducts B2B e-commerce mainly among trusted partners via Virtual Private Net Despite thorough planning by Intel's worldwide works(VPN) and thus its security risks are reduced team, the most significant payoff from deploying the e-business solution was what the company learned 3.8. Success Key success factors ranked by level of importance an On 1 July 1998, Intel officially began taking orders tive strategic position in the market: Intel had the from oem and distribution customers using its new right goals, unique product lines, and was able to personalized websites. This system enabled approxi- deliver a value proposition that is equal or better mately 200 of Intel's customers in almost 30 countries than that of its competitors. Thanks to its distinctive to place orders for Intel products, check product trategic positioning, buyers continue to pay a pre availability and inventory status, receive marketin mium price for Pentium products. By building its and sales information, and obtain customer support in B2B system as early as 1998, Intel further strength real-time, 24 h a day, 7 days a week. Prominent ened its strategic position with value chain partnersof the 128-bit encryption technology a necessary step to trust Intel’s e-business system, especially in nations where e-business is relatively new.’’ With the 128-bit encryption model resolved, the project moved forward to deploy the pilot system. During the first month of deployment, Intel found that encrypted file transfer was very sensitive to packet loss when using SSL security. When packet loss rate exceeded 15%, the download times for encrypted pages skyrocketed. It was critical for Intel to reduce the packet loss rate to successfully deliver its e-busi￾ness system. In addition, most of the transmission problems at customers’ sites were located in the connection between customer’s workstations to end￾offices and tandem offices of the telephone companies. One solution was to reduce the number of elements that had to be transferred through the network. This was done by using data compression and redesigning the web pages so that only compressed data had to be transferred. Another solution was to improve connec￾tion quality and increase bandwidth between custo￾mers’ sites and the tandem office. With some incentives, Intel urged all of its value chain partners to upgrade their connections to ISP servers with high bandwidth pipes and high speed network and routers. Despite the strong encryption technology that was used worldwide within Intel’s value chain of partner￾ship, Intel’s choice of Pentium servers and Windows operating systems created some security concerns. System security is only as good as the weakest link in the security chain. At Intel’s e-business system, the weak links include Microsoft Windows Operating Sys￾tems and Windows NT networks. Problems caused by hackers on Windows-based web-servers are common￾place. Fortunately, Intel conducts B2B e-commerce mainly among trusted partners via Virtual Private Net￾works (VPN) and thus its security risks are reduced. 3.8. Success On 1 July 1998, Intel officially began taking orders from OEM and distribution customers using its new personalized websites. This system enabled approxi￾mately 200 of Intel’s customers in almost 30 countries to place orders for Intel products, check product availability and inventory status, receive marketing and sales information, and obtain customer support in real-time, 24 h a day, 7 days a week. Prominent applications in the value chain model at Intel are presented in Fig. 3. Major successes are: Intel moved US$ 1 billion dollars in revenue to its on-line e-business system in the first 15 days, surpassing the company’s initial goal of doing this in the first 3 months. The company was able to eliminate most faxes to its customers worldwide. For value chain partners in Taiwan alone, this eliminated 45,000 faxes per quarter. This produced significant cost savings for Intel and its value chain partners in reduced inter￾national long distance phone costs. After the first month of deployment, Intel continued to receive US$ 1 billion value of orders on-line each month for the rest of 1998. Independent customer surveys rated Intel’s e-busi￾ness at a 94% satisfaction level. Intel became the eighth most profitable company in the US in 1999 and climbed to the fifth in 2000. Amid the collapse of many dotcoms and click-and￾mortars in recent years and the 2001 recession, Intel remains profitable and retained the value of its equity. For the year 2001, Intel’s income was US$ 1.29 billion. At US$ 211 billion, Intel was the seventh largest US company in market capita￾lization values at the end of 2001 [1,16]. Many of Intel’s employees who participated in the development of the e-business system continue to receive promotions many years after its successful deployment. Sandra Morris was promoted to the CIO position. 3.9. Lessons learned and success factors Despite thorough planning by Intel’s worldwide team, the most significant payoff from deploying the e-business solution was what the company learned. Key success factors ranked by level of importance are: Building and continuing to strengthen their distinc￾tive strategic position in the market: Intel had the right goals, unique product lines, and was able to deliver a value proposition that is equal or better than that of its competitors. Thanks to its distinctive strategic positioning, buyers continue to pay a pre￾mium price for Pentium products. By building its B2B system as early as 1998, Intel further strength￾ened its strategic position with value chain partners. D.D. Phan / Information & Management 40 (2003) 581–590 587