eBay - Staying Online - Always

Technology Contd...

The company replaced a C++¹⁵ object framework that required a lot of structural programming. Though the C++ environment was more flexible than Cobol, it couldn't compete with J2EE, which was becoming the de facto application development framework. J2EE's objects could handle a much higher level of abstraction than C++. The new applications were more widely distributed, running across multiple machines (both Windows and Solaris) and relied on data-dependent routing, which utilized server cache¹⁶ more efficiently. The V3 deployment was phased in slowly. It began during the fourth quarter of 2001 and was to be completed over the next 18 months. By December 2001, eBay's IT infrastructure had not only become flexible enough to handle instant recoding but also sturdy enough to process more than 800,000 transactions every minute.

Reaping the Benefits

The fact that auctions were relatively static events (until the final few minutes when lot of bids could often put a major hit on its servers and apps) was the biggest challenge for eBay. According to industry experts, eBay's decision to opt for a more distributed application infrastructure had reduced the load on its infrastructure. Besides, the software developers had more flexibility to change the codes without affecting the entire application. According to an analyst,¹⁷ eBay's 99 percent uptime was in line with other consumer sites like Amazon.com and Yahoo. However, it was more important for eBay to ensure zero outages than other consumer sites. Todd said, "If Yahoo! goes down, I can't get news or e-mail for 20 minutes or an hour, but if eBay goes down, I might miss out on a $1,000 auction that I am running my business on."

The company's efforts seemed to have paid off, as it did not face any major outages after the January 2001 episode. The company posted a handsome growth in earnings and net profits in 2001 despite a global slowdown in the information technology industry. Webb said, "Analysts in our industry were asking, 'Can eBay scale to meet increased demands? Can eBay support its growth?' We do not get those questions any more."

Exhibits

Exhibit I: eBay's Auction Process
Exhibit II: Consolidated Statements of Income

15] C++ is the programming language for graphical applications, running on Windows and Macintosh environments.
16] A special high-speed storage mechanism which can be either a reserved section of main memory or an independent high-speed storage device. Two types of caching are commonly used in personal computers: memory caching and disk caching.
17] Daniel Todd, chief technologist at Keynote Systems, an organization which measures a website's uptime and responsiveness.

Case Details

Case Code : ITSY015
Themes: Internet Companies
Case Length : 08 Pages
Period : 1995-2001
Organization : eBay
Pub Date : 2002
Teaching Note : Available
Countries : USA
Industry : Information Technology

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