The traditional path of e-commerce has largely failed during the dot-com crash in 2001. Instead of of this traditional approach organizations must learn to embrace an e-service approach more focused on service an customer satisfaction. This offers new forms of competitive advantage and is part of a broader shift from products to services seen in companies.
by putting the firm in a position that attends to the needs of the customer by providing software service in addition to selling products.
Transformation of physical products to service products
The transformation of physical products to service products is enabled and hasten by electronic networks. For firms to garner long-term customer relationships they must take full advantage of the e-service opportunities that these electronic networks can offer. They predict that product-centered orientated firms that resists the call of the customers for control are not likely to survive in this electronic environment and give the example of record labels.