Virtual Vineyards taps into real-time, online wine sales
Combining a knowledge of spirits and high technology, the company's founders took their business online four years ago with a shopping-cart model that lets customers see what's actually in stock when they place an order.
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| ZDNet's Internet X-Ray™ provides an interactive and revealing look at Virtual Vineyards'
e-commerce infrastructure. From order to delivery, see how all the products and services work together to make the site run.
(Macromedia Flash required; free download.) Company/product index: Same info as the X-Ray, but the format's not nearly as cool. |
"This is not just a catalog on the Web; we allocate wine to an order," said Cyrus Khoshnevisan, director of engineering for Virtual Vineyards in Palo Alto, Calif. "Once you sell out of a vintage of wine, it is gone, so we have to have a real-time inventory."
This use of real-time inventory at an e-commerce site is fairly unique, according to International Data Corp. "It's more indicative of companies who are on the cutting edge," said Juliana Nelson, a senior analyst with IDC in Mountain View, Calif. A recent IDC report on the top 100 e-commerce vendors revealed that only two-thirds of these market leaders operate back-end systems that are integrated with a Web front end, allowing such features as real-time inventory tracking.
In January 1995, Virtual Vineyards started its e-commerce site with the purchase of a Sun Solaris-based Web server to host its Web pages internally. The firm developed an ordering system based on Oracle Corp.'s Oracle8 database software and outsourced credit-card verification to CyberCash Inc.
Legal issues involved in selling alcohol, including which states it can be shipped to, encouraged Virtual Vineyards to keep distribution in-house. "We facilitate the sale through legal channels so people can purchase wine," Khoshnevisan said. To ensure that the purchaser is of the legal age to buy alcohol, the company requires an adult signature when the wine is delivered by UPS, FedEx or other service.
Toasting the host
In time, however, the popularity of the Web site made outsourcing it more appealing. In December, the Virtual Vineyards site handled 223,000 unique visitors, according to Media Metrix Inc. As those Christmas season sales taxed the single T-1 line coming into on-site Web servers, Virtual Vineyards opted to have Frontier GlobalCenter of Sunnyvale, Calif., host its Web site.
"Originally, we were on a single T-1 with a single point of sale, but that was not enough bandwidth," said Khoshnevisan. From a cost perspective, outsourcing Web hosting bought additional reliability, performance and security at the same price as purchasing the additional bandwidth would have.
Virtual Vineyards now spends between $5,000 and $10,000 a month to host its Web services with Frontier GlobalCenter. "If we had bought a fractional T-3 for the bandwidth, it would cost the same amount, but bring the headache of maintaining the network infrastructure," said Khoshnevisan.
Instead, Frontier GlobalCenter provides the 24-by-7 network management and operations. "We have a number of facilities around the country … that are high-spec, hardened facilities with on-site network operations and on-site technicians working around the clock," said Matt Parnell, vice president of data product management for Frontier GlobalCenter, a Frontier Corp. company.
The backbone that ties these Frontier "media centers" together is comprised of two OC-48 connections with a bandwidth capacity of 5G bps. This backbone services some of the largest Web sites in the world, including Yahoo! and The Washington Post. Multiple points of presence make it possible for Frontier to mirror its customers' sites and connect Internet users to the geographically closest server. Although Virtual Vineyards hasn't opted to mirror its sites yet, the company still benefits from Frontier's well-established infrastructure.
"Virtual Vineyards is sitting in these same buildings and getting the same advantages as other customers," said Parnell. "Since this is our business, we build networks to a much higher level than any individual company could," he said.
Monthly hosting charges can range from $3,000 to tens of thousands of dollars, depending on the amount of bandwidth and space required.
As it grew in size, Virtual Vineyards also changed its credit authorization service supplier from CyberCash to Signio Inc. (formerly PaymentNet Inc.). Virtual Vineyards decided to make the switch because it viewed Signio as an up-and-coming company with good customer service.
"They have software on our servers and [after customers establish] SSL-based connections across the Internet, we can do credit-card captures and authorizations," Khoshnevisan said.
E-commerce sites pay for authorized transactions according to the number that come through each month. After a one-time set-up fee of $250, monthly charges range from $49 for 250 transactions to $229 for 2,000 transactions.
Distilling the network infrastructure
Virtual Vineyards' most current e-commerce configuration can be viewed in ZDNet's Internet X-Ray™ (Macromedia Flash required; free download available.)
The setup involves Sun Microsystems Inc.'s Solaris-based Sparc 5 and Sparc 10 servers that run Netscape Communications Corp.'s Enterprise Server to deliver both the external Web site and an internal intranet. Both are connected to a Sun Solaris-based E3000 database server running Oracle's Oracle8i database server software and Signio's credit-card authorization server. All of this is hosted at Frontier's Sunnyvale, Calif., Media Center. To keep traffic evenly balanced between the Sparc 5 and 10, Frontier uses Radware Ltd.'s WSD-Pro load balancer.
The network fabric that underlies Virtual Vineyards' Napa and Palo Alto offices along with Frontier's Sunnyvale Media Center is stitched together via a Pacific Bell T-1 by Cisco Systems Inc.'s 2500, 2600 and 1605 routers, respectively, two of which connect locally to a LAN via a Cisco 2916M XL Fast Ethernet Switch; the third connects via a basic 10BaseT Ethernet hub.
Although Frontier's high-bandwidth connection to the Internet could service all of Virtual Vineyards' internal Internet traffic through the Cisco 1605, the company has chosen to route most of that traffic through a Cisco 2500 router in Palo Alto that connects to the Internet via T-1 to PSINet Inc., the company's ISP. Eventually, Virtual Vineyards intends to push its internal Internet traffic through the 1605 in Sunnyvale once its Cisco IOS Firewall software is updated.
To monitor performance on its Web site, Virtual Vineyards subscribes to Keynote Systems Inc.'s Web site response service, Keynote Perspective. "We use Keynote to make sure we are competitive and as fast as we can be," said Khoshnevisan. Keynote Systems, of San Mateo, Calif., provides its customers with daily reports on how well their Web sites are performing.
As a customer places an order on the Virtual Vineyards Web site, the order is recorded in a transaction table. The payment server detects transactions as they occur and handles credit-card authorization through a secure connection to Signio. The order is then verified and processed by Virtual Vineyards' customer-service department via the company intranet. At that point, the order is sent to the company's warehouse for packing and shipping. Orders placed by 10 a.m. are sent that day. Virtual Vineyards maintains an extranet with Limestone International, its Napa, Calif.-based distribution subsidiary. Through SSL and passwords, data is securely exchanged and orders are filled.
Shipments are automatically monitored using the tracking ID assigned by UPS
or FedEx. Upon verification of delivery, the system notifies customers via e-mail.Spicing up the design
A combination of consultants and in-house HTML writers designed the Virtual Vineyards' Web site, now in its third generation. The result was a template-driven site that is routinely updated using text editors. "One thing about Web design is that it is never-ending," Khoshnevisan said.
For the fourth iteration of its Web pages, Virtual Vineyards is considering using an outside agency for design. "Writing with JavaScript and new HTML takes a certain amount of knowledge that you can't have in just a few people," he said. The new designs will include Java-based pages for the first time and debut before the Christmas holiday, he said.
To gain additional exposure on the Web, Virtual Vineyards uses an affiliate promotion program. Partners that place an icon for virtualvin.com on their site gain 8 percent referral commissions on all sales from that location. The company has also purchased keywords and placed advertisements with the search engine sites Yahoo! and Excite.
"We did take a look at people who say, ‘We promise on searches that you will show up first,' but we did not find one that was reliable to our satisfaction," said Khoshnevisan.
Kristina B. Sullivan can be contacted at kristina_sullivan@zd.com.
For Virtual Vineyards, selling wine not just when it's time but in real time is an online business that's growing 20 percent a month.
|
| ZDNet's Internet X-Ray™ provides an interactive and revealing look at Virtual Vineyards'
e-commerce infrastructure. From order to delivery, see how all the products and services work together to make the site run.
(Macromedia Flash required; free download.) Company/product index: Same info as the X-Ray, but the format's not nearly as cool. |
Combining a knowledge of spirits and high technology, the company's founders took their business online four years ago with a shopping-cart model that lets customers see what's actually in stock when they place an order.
"This is not just a catalog on the Web; we allocate wine to an order," said Cyrus Khoshnevisan, director of engineering for Virtual Vineyards in Palo Alto, Calif. "Once you sell out of a vintage of wine, it is gone, so we have to have a real-time inventory."
This use of real-time inventory at an e-commerce site is fairly unique, according to International Data Corp. "It's more indicative of companies who are on the cutting edge," said Juliana Nelson, a senior analyst with IDC in Mountain View, Calif. A recent IDC report on the top 100 e-commerce vendors revealed that only two-thirds of these market leaders operate back-end systems that are integrated with a Web front end, allowing such features as real-time inventory tracking.
In January 1995, Virtual Vineyards started its e-commerce site with the purchase of a Sun Solaris-based Web server to host its Web pages internally. The firm developed an ordering system based on Oracle Corp.'s Oracle8 database software and outsourced credit-card verification to CyberCash Inc.
Legal issues involved in selling alcohol, including which states it can be shipped to, encouraged Virtual Vineyards to keep distribution in-house. "We facilitate the sale through legal channels so people can purchase wine," Khoshnevisan said. To ensure that the purchaser is of the legal age to buy alcohol, the company requires an adult signature when the wine is delivered by UPS, FedEx or other service.
Toasting the host
In time, however, the popularity of the Web site made outsourcing it more appealing. In December, the Virtual Vineyards site handled 223,000 unique visitors, according to Media Metrix Inc. As those Christmas season sales taxed the single T-1 line coming into on-site Web servers, Virtual Vineyards opted to have Frontier GlobalCenter of Sunnyvale, Calif., host its Web site.
"Originally, we were on a single T-1 with a single point of sale, but that was not enough bandwidth," said Khoshnevisan. From a cost perspective, outsourcing Web hosting bought additional reliability, performance and security at the same price as purchasing the additional bandwidth would have.
Virtual Vineyards now spends between $5,000 and $10,000 a month to host its Web services with Frontier GlobalCenter. "If we had bought a fractional T-3 for the bandwidth, it would cost the same amount, but bring the headache of maintaining the network infrastructure," said Khoshnevisan.
Instead, Frontier GlobalCenter provides the 24-by-7 network management and operations. "We have a number of facilities around the country … that are high-spec, hardened facilities with on-site network operations and on-site technicians working around the clock," said Matt Parnell, vice president of data product management for Frontier GlobalCenter, a Frontier Corp. company.
The backbone that ties these Frontier "media centers" together is comprised of two OC-48 connections with a bandwidth capacity of 5G bps. This backbone services some of the largest Web sites in the world, including Yahoo! and The Washington Post. Multiple points of presence make it possible for Frontier to mirror its customers' sites and connect Internet users to the geographically closest server. Although Virtual Vineyards hasn't opted to mirror its sites yet, the company still benefits from Frontier's well-established infrastructure.
"Virtual Vineyards is sitting in these same buildings and getting the same advantages as other customers," said Parnell. "Since this is our business, we build networks to a much higher level than any individual company could," he said.
Monthly hosting charges can range from $3,000 to tens of thousands of dollars, depending on the amount of bandwidth and space required.
As it grew in size, Virtual Vineyards also changed its credit authorization service supplier from CyberCash to Signio Inc. (formerly PaymentNet Inc.). Virtual Vineyards decided to make the switch because it viewed Signio as an up-and-coming company with good customer service.
"They have software on our servers and [after customers establish] SSL-based connections across the Internet, we can do credit-card captures and authorizations," Khoshnevisan said.
E-commerce sites pay for authorized transactions according to the number that come through each month. After a one-time set-up fee of $250, monthly charges range from $49 for 250 transactions to $229 for 2,000 transactions.
Distilling the network infrastructure
Virtual Vineyards' most current e-commerce configuration can be viewed in ZDNet's Internet X-Ray™ (Macromedia Flash required; free download available.)
The setup involves Sun Microsystems Inc.'s Solaris-based Sparc 5 and Sparc 10 servers that run Netscape Communications Corp.'s Enterprise Server to deliver both the external Web site and an internal intranet. Both are connected to a Sun Solaris-based E3000 database server running Oracle's Oracle8i database server software and Signio's credit-card authorization server. All of this is hosted at Frontier's Sunnyvale, Calif., Media Center. To keep traffic evenly balanced between the Sparc 5 and 10, Frontier uses Radware Ltd.'s WSD-Pro load balancer.
The network fabric that underlies Virtual Vineyards' Napa and Palo Alto offices along with Frontier's Sunnyvale Media Center is stitched together via a Pacific Bell T-1 by Cisco Systems Inc.'s 2500, 2600 and 1605 routers, respectively, two of which connect locally to a LAN via a Cisco 2916M XL Fast Ethernet Switch; the third connects via a basic 10BaseT Ethernet hub.
Although Frontier's high-bandwidth connection to the Internet could service all of Virtual Vineyards' internal Internet traffic through the Cisco 1605, the company has chosen to route most of that traffic through a Cisco 2500 router in Palo Alto that connects to the Internet via T-1 to PSINet Inc., the company's ISP. Eventually, Virtual Vineyards intends to push its internal Internet traffic through the 1605 in Sunnyvale once its Cisco IOS Firewall software is updated.
To monitor performance on its Web site, Virtual Vineyards subscribes to Keynote Systems Inc.'s Web site response service, Keynote Perspective. "We use Keynote to make sure we are competitive and as fast as we can be," said Khoshnevisan. Keynote Systems, of San Mateo, Calif., provides its customers with daily reports on how well their Web sites are performing.
As a customer places an order on the Virtual Vineyards Web site, the order is recorded in a transaction table. The payment server detects transactions as they occur and handles credit-card authorization through a secure connection to Signio. The order is then verified and processed by Virtual Vineyards' customer-service department via the company intranet. At that point, the order is sent to the company's warehouse for packing and shipping. Orders placed by 10 a.m. are sent that day. Virtual Vineyards maintains an extranet with Limestone International, its Napa, Calif.-based distribution subsidiary. Through SSL and passwords, data is securely exchanged and orders are filled.
Shipments are automatically monitored using the tracking ID assigned by UPS
or FedEx. Upon verification of delivery, the system notifies customers via e-mail.Spicing up the design
A combination of consultants and in-house HTML writers designed the Virtual Vineyards' Web site, now in its third generation. The result was a template-driven site that is routinely updated using text editors. "One thing about Web design is that it is never-ending," Khoshnevisan said.
For the fourth iteration of its Web pages, Virtual Vineyards is considering using an outside agency for design. "Writing with JavaScript and new HTML takes a certain amount of knowledge that you can't have in just a few people," he said. The new designs will include Java-based pages for the first time and debut before the Christmas holiday, he said.
To gain additional exposure on the Web, Virtual Vineyards uses an affiliate promotion program. Partners that place an icon for virtualvin.com on their site gain 8 percent referral commissions on all sales from that location. The company has also purchased keywords and placed advertisements with the search engine sites Yahoo! and Excite.
"We did take a look at people who say, ‘We promise on searches that you will show up first,' but we did not find one that was reliable to our satisfaction," said Khoshnevisan.
Kristina B. Sullivan can be contacted at kristina_sullivan@zd.com.