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Ecommerce business models | Start web business: low cost infrastructures

In two prior articles we talked about the come-back of Internet based business models - the so called dot com companies-, at least in the US. So far, we have pointed out two factors that would explain this situation: the spectacular increase in advertising revenues and the fact that almost everybody is already connected to the Internet and, increasingly, with broadband connections.

A third factor that supports this new dot com momentum is the spectacular decrease in the infrastructure cost of developing an Internet business compared with the past years. Some years ago the amount of hardware and software investment to start web business was considerable, specially if the business model required a high critical mass of users in the system. Today, the reduction in hardware costs, the existence of open source and free software, and the possibility to access to a full range of software applications in the ASP model, have lead the infrastructure costs of Internet businesses to a fraction of what it used to be.

The same reflection can be done about the cost of supporting a high traffic volume in a website. This was also an important part of the cost of starting web business and maintaining it. Nevertheless, the huge competition among Internet services providers (ISP) and the constant drop in data transfer costs make again that maintaining a high traffic volume site at this moment costs a fraction of what it was some years ago.

Definitively, all this elements configure an scenario where the barriers to start web business have considerably diminished.


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About the Author

Francesc Llobet is an Internet entrepreneur and a strategy business consultant in the fields of innovation, internet marketing and ebusiness.
Based in Barcelona, Catalonia (European Union), he is the founder of Sappiens.com, The Knowledge Community and Founder and CEO of Adverstore.com, Advertising for everyOne!. He maintains InnovationThink, eMarketingThink OnlineAdvertisingThink and A Startup Story, blogs where he writes on Innovation, Internet Marketing, Advertising and Startups. To know more..

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