An E-commerce Success story
by Dennis Tenney
Linux is critical to America's largest comic book dealer's e-commerce operation. Mile High Comics President Chuck Rozanski doesn't think of it that way, though. He thinks of providing his customers with a reliable, scalable, rock-solid source for their funny books He provides an e-commerce source that consistently delivers value, selection, service and community.
Mile High Comics, Inc. is a fully-diversified, entertainment products company dealing primarily in comic books and related collectibles. Founded in 1969 by sole stockholder and company president Chuck Rozanski, the company has grown from a very small mail order and flea market operation to be the largest retailer of comic books and related products in America.
The current operations of the company include six retail stores, the largest mail order subscription company for comic books, and a rapidly growing e-commerce business. The e-commerce end of the business offers both new and older comics, action figures, cards, toys, Disney collectibles, Star Wars/Star Trek collectibles, movie posters, and a plethora of related products. The collector side of this business is backed by an inventory unsurpassed in the comics industry, with over 6 million back issue comics in stock, plus tens of thousands of other items. The total market value of this inventory exceeds $20,000,000.
During 1999 the company plans to focus all of its energies on growth of its e-commerce operations. E-commerce sales in 1997 were approximately $30,000. E-commerce sales increased to $800,000 in 1998, and are projected at $5,000,000 in 1999. Sales from retail stores and subscriptions are expected to rise slightly to about $4,000,000 in 1999, primarily because of the positive benefits provided by the twice-weekly mass e-mail sent to the company's guest book mailing list. Current overall company employment is at 65 staff members, with growth to 100 staff members anticipated during 1999. Almost all of the new positions created will be in e-commerce fulfillment operations or corporate staff. The company is also planning to consolidate corporate operations, warehouse operations, e-commerce fulfillment and its largest retail store into a single building during 1999. A search is presently underway in the north Denver metropolitan area for an appropriate structure of approximately 80,000 square feet.
Milehighcomics.com depends on people and technology proven in the arena of full contact capitalism. Responsibility for the site is split between Mile High (resting on Chuck and Lynne MacAfee, web operations manager), Algoryte systems (providing IT support for their Alpha Micro legacy system) and Interactive Internet. David Bluestein and his team from Interactive Internet provide engineering design and construction support. Co-hosting for milehighcomics.com is contracted to Rocky Mountain Internet.
Internet Interactive is the key technology partner providing all of Mile High Comics' web site engineering design and construction. David Bluestein, Internet Interactive President and Lead Developer, is a valued member of Mile High's IT team. He provides engineering that keeps pace with Chuck's vision. Keeping up with that vision is quite a race as the revenue figures above demonstrate.
Interactive Internet's business partner approach to providing technology is the key to their relationship with Mile High Comics. Their customer commitment is to "Make the Internet Work for Your Business" by providing robust interactive elements that add value and/or save money for business web sites. As a member of each customer's IT team, they select technology and provide training that enables their customers to maintain these interactive elements without continued need for assistance.
Interactive Internet develops online systems for electronic trading/commerce, searchable membership databases, web-based conferencing systems, and other dynamic Internet-based systems. The projects, much like Interactive Internet's clients, vary in size and complexity. Each project makes a website more dynamic and provides easy access to information. Recent projects range from large searchable databases in excess of 100,000 records to a single dynamically generated HTML page which enables clients to keep the content of their websites updated with ease.
Dave Bluestein founded Interactive Internet in 1994. Initially he did straight technology work without much e-commerce. The business side of the web was just starting to take off and industrial strength programming tools weren't yet available. Today he leads a successful company with a core staff of four people and relationships with a team of contractors.
Linux and FreeBSD played a role in the business from the start. Beginning in 1995, Dave saw Linux really take off. FreeBSD has had a declining role since then.
Today, Dave deploys Linux for his customers as a low cost robust operating systems for web servers. While he feels Linux is more intensive to set up than Windows NT, the reduction in maintenance costs and hardware costs provide real advantage for his customers. Linux's low cost over the life-time of an installation is the key. Key selling points include no cost for software licenses and performance capable of running a decent web site on a 386.
In his experience, Dave has not found big differences in the direct operating and personal costs for Linux vs. NT solutions. About the same staffing levels are required for a business web site independent of the operating system technology. Linux's remote administration capabilities do make a big difference for travel costs. With SSH and secure connections, a complete re-install can be accomplished without traveling to a customer's site. Interactive Internet has customers as far away as Africa. Dave wouldn't attempt to serve a customer that far away using NT.
Operating roles for content creation, fulfillment links and other business functions don't seem to change much between Linux and NT. Those roles are determined by the business each web site represents. A gravel company needs about the same staff regardless of the operating system selected for their web site. However, Linux can make those roles easier to accomplish.
For example, the command line and scripting capabilities in a Linux environment make automation easier. Mile High loads data from their legacy system to milehighcomics.com on a regular basis. With a Linux-based site, they can quickly script the process using ftp. With an NT site, they would probably have to use an NT GUI interface to complete the upload.
From Dave's perspective, the only problem with Linux is that people view it as more complex. Training and education are the tools to overcome that attitude.
Tools to Build Web Sites
When building a web site, Interactive Internet uses standard proven tools. For a web server reliability, is paramount. They adopt tools only after they have been proven in use for some time.
For example, Dave hasn't seen a strong demand for Java. As a result of the various extensions to Java, presentation at the browser varies too much today for many businesses Besides, it is much easier and more predictable to have the script run at the server rather than at the client. On the client side, variations in both Java and HTML processing make the presentation harder to prove out.
Not surprisingly, Linux, Apache and Perl are a common combination in the sites Dave builds, including milehighcomics.com. They are mature tools that have proven their reliability in commercial settings.
Tools in the Linux environment that Interactive Internet regularly applies when
building a site include:
· Apache web server
· Cross platform Perl 5 (UNIX/NT/Mac)
· SQL - Primarily PostgreSQL, MySQL and MSQL
The biggest question on Linux now, Dave believes, is what distribution to use. They are all identical from the end user's viewpoint. Interactive Internet chose the Red Hat distribution originally, when they felt it was clearly the best distribution for business applications. Today, however, there are more good choices available.
The role of Linux for Interactive Internet's customers will continue to grow. Some key factors include the availability of Linux on a CD, which improves ease of use and confidence in the product, and the availability of better desktops for Linux. The new KDE and GNOME desktops will open up the door for better acceptance for more applications.
The primary reason the role of Linux continues to grow may be summed up in four words: Confidence, Cost, Scalability and Reliability.
Mile High Comics and Linux
The woodchuck and the penguin clearly were made for each other. Like most business partnerships, the reasons are about trust, service and money.
Most of Interactive Internet's clients do not care what operating system runs on their web server as long as it works.
Their primary interest is running their business, not having to understand the latest technology. Linux gets deployed because it is easy to work with and has an attractive total cost of ownership.
Cost and reliability are the reasons Linux is the right fit for Mile High Comics. Mile High was not concerned about the nature of the software licensing for the operating system. Their site was virtual-hosted on a system running Solaris, another Unix variant, so management was comfortable with a Unix-like alternative.
At a rough estimate, the web site machine was built using Linux for half the cost of an NT-based machine. There was also a high confidence a single Linux machine could handle the load, where an NT solution might have required multiple machines.
Linux was clearly the right choice for Mile High Comics. A year later, they haven't needed to upgrade the machine machine despite an increase in traffic to an average of 60,000 hits per day within a single year.
Linux has also integrated well with the existing IT infrastructure. Supporting applications include database warehousing on an Alpha Micro, content preparation on Macintosh and Windows systems and the fulfillment process across all platforms.
Web service for milehighcomics.com includes an on-line catalog, ordering systems and auctions. Chuck Rozanski sees auctions as one of the most powerful forces in e-commerce. It is all about giving customers more choice and control.
A conservative approach to the use of client side technology has also paid off. WebTV and AOL are very popular choices for Mile High's customers. Pages that show well over a range of platforms, and especially these two, are an important aspect of their customer service.
In addition to web service, Linux is also used to manage the Mile High Comics custom mailing lists. Comic enthusiasts can sign up to literally hundreds of lists tailored to their specific interests. All mailings to each customer are combined into a single e-mail before being sent.
Linux also helped build the solid merchandising operation. Lynne MacAfee, Mile High Comics Internet Operations Manager, operates the primary applications on a daily basis. Interactive Internet's role is to provide modifications to add features, monitor the web site and contribute to long term tactical planning. Mile High Comics staff operate the site, design content, envision new features and team with Interactive Internet to get the technology they need.
The system continually evolves based on demand from Mile High Comics customers. Responding to customer demand builds a system better suited to those customers. There is no need to gamble on customer acceptance of an engineer's ideal system. In addition, the existing system can generate the cash for financing upgrades up-front. Costs are justified based on hard revenue, not soft speculation.
Linux is helping build a different kind of business community. This community is composed of small (less than 100 people) firms participating in partnerships where everyone has a real stake in the success or failure of the venture. Ventures can be undertaken that deploy reliable enterprise-scale technology without relying on big company intellectual property. There are no big company names in this story. No technology is owned by a giant corporation.
This kind of success story was once the exclusive province of companies like IBM and Anderson Consulting. Now, however, companies that cannot afford high consulting fees and software licenses have access to similarly successful technology. They can use this technology to build enterprise e-commerce applications, open source technology that any competent engineer can evolve and apply in their customer's best interests.
My thanks to Captain Woodchuck and Tux.
The Linux Weekly News wishes to thank the people who provided interviews for this article. They are:
Mile High Comics : Chuck Rozanski, Lynne MacAfee, and Rowen Rozanski
Algoryte Systems : Tom Dahlquist
Interactive Internet : David Bluestein