Archive | October 6, 2014

Will Google drive you Home?

An automated car or self-driving car is a one that is able to sense the environment and ride without the need of a human interference. This phenomenon has been tested all early in 19’s, but the first fully automated car was presented in 1950’s by the RCA laboratories. For some years already many companies like Mercedes, BMW and Volvo were testing the possibility to make this a commercially new production line. Now, years later the only thing we have are some cars with some automated features, for example Mercedes and Volvo that have some cars with features like self parking, brake automatically to avoid hitting  and keeping the same speed as the car in front of you. BUT after all this stuff the only legal “full automated” car now in 2014 in the Netherlands are still the Park Shuttles. (Maybe you already took a drive into one by the metro Kralingse Zoom).

parkshuttles rotterdam

I want to emphasis that after years of testing companies still didn’t get the opportunity and trust to make them commercially available.  Nissan goal is to introduce their self-driving car by 2020. Some state in the US (i.e. Nevada, California) already legalized the used of these cars. At this moment my main questions are:  Will we be ready for them by 2020? Are we mentally prepared for self-driving cars in our lives?

It’s a fact that Google is really busy in the process of making a line of those cars commercially available. Google has been developing their Self driving car for some years, but didn’t give and still doesn’t want to give allot of information to the public. One thing is sure they are building and testing the car themselves.

We already know that Google has the potential to combine IT and Technology and create a bright future; in this case it can be that Car.  But do you think these Google car will be trusty? This question is related to the fact that Google is focusing on building the entire car instead of just the software. Do you think Google is able to change the mindset of the people and make the self driving car a disruptive technology?

Personally I would love the idea of this car. Not only the benefits that it may give the population, like less accidents and less traffic jams., but for me it will also be a great social benefit like, eating when I am on my way or just sit and chill on my tablet. Or when I am out with my friends I can drink some extra beers without any worries. I tested the Shuttles by Kralingse Zoom and enjoyed the ride. Maybe with the Google cars it would be a little different, because the cars will have to deal with many other objects and vehicles, and most people will be nervous but I think it will be a matter of getting used to it. On the other side I think it would be nothing for some people, because there are allot of people who see their car as a status or a symbol, for example showing my friends off how good I can drive.

Another possible drawback could be that other parties like auto parts brands or insurance company could take advantage of the uncertainties of the people and raise their premiums, with the result that the total costs of the car would be too expensive. Early this year made “Centraal Beheer” one commercial regarding this topic. This may showed us already in some way how some insurance companies are preparing or thinks of the topic.

Now I want to ask you:  What do you readers think? Is Google trying to help us, by making our live easier? Or is it just marketing and a good boost for the Google maps? Would you buy or take a ride into one of those cars?

References

http://www.marketingboeken.net/reclameklassieker/self-driving-car-van-centraal-beheer/

http://www.theverge.com/2013/5/18/4341656/mercedes-benz-shows-off-self-driving-car-technology

http://connectedcities.eu/showcases/parkshuttle.html

http://www.google.com/about/careers/lifeatgoogle/self-driving-car-test-steve-mahan.html

http://www.bbc.com/news/technology-27587558

Is Facebook entering the financial market?

Recently a security researcher discovered the existents of a possibility to transfer money via Facebook messenger. The feature isn’t yet visible for the public, but by examining the code of the messenger app it could already be fFacebook Payments Select Methodound inside the app.

Assuming that this is real, this could be the next market Facebook wants to conquer. There is only one important detail found in the code, so far there is no fee charged for transferring money. This fact makes you think if conquering a new market is really what Facebook wants.

Another, and maybe a better, reason for Facebook to enable to transfer money via their app is to make their app more attracting to users. There is a big worldwide competition going on among the different chat apps and Facebook is eager to make their messenger app one of the big players.

As a first step they separated Facebook messenger into a separate app and forced every mobile Facebook user to download it. Still it’s a tough job to compete with Whatsapp and Facebook messenger is not winning at the moment. So a next step could be this money transfer feature. By triggering the user to use the app on a more day to day base, it could possibly make the user more familiar with the app. This could result in more messages going through the app. So by introducing an feature which is totally different from the normal purpose of the app, maybe it could make the app a winner in the market.

http://techcrunch.com/2014/10/05/pay-with-facebook-messenger/

Big data; the solution to increase safety in your neighbourhood, or a threat for your privacy

google_glass.jpg.size.xxlarge.letterbox“Big data is like teenage sex: everyone talks about it, nobody knows how to do it, everyone thinks everyone else is doing it, so everyone claims they are doing it.” A quote of Dan Ariely, and it looks like that this comment is valid for one of the latest projects of the Dutch government (frankwatching,2014).

The Dutch government cooperate with several companies to maintain their computers and software. One of them is PinkRoccade, a company that supports and advices Dutch municipalities in the field of IT. One of their future projects is quite remarkable. They have a vision how to make neighbourhoods safer by collecting data through wearables in 2020. The company is probably right in assuming that a lot of Dutch citizens will wear wearables. However, are citizens willing to share all the data wearables collect?

With wearables, PinkRoccade can track data like your heart rate, perspiration and your location. All this data will be collected and shared with the municipality so that they can anticipate when danger lurks.

Take as an example that you’re walking through a seedy neighbourhood. Suddenly, you get clammy hands and your heart rate increases. The police receive this information through your smartwatch, immediately localize you through GPS and connects with your smartglasses, to check your current situation. Based on the data received, they conclude that two strangers with a violent criminal record are walking nearby. The department contacts the nearest officer, sends him over to you, and when possible sends warning messages to the strangers.

The municipality and PinkRoccade believes that in this way, your sense of security will increase and that they can warrant safety in neighbourhoods (Bright,2014).

In my opinion, this way of sharing information is not efficient. What is going to happen when I’m just running through a park, or when I’m just feeling ill? In this way the municipality will receive a lot of unnecessary data and to filter all that kind of data is quite inefficient.

Another solution to increase safety in neighbourhoods is the predictive policing program in the United States. The database of this program is extensive. It has plenty of historical crime information, like data that’s been used for years to identify clusters known as “hotspots” where crimes have occurred in the past. But also information about disturbance calls and calls regarding suspicious persons. Based on all information, the municipality and IT specialists are working on technology to generate crime maps that highlight neighbourhoods of the city that might soon be at risk of an uptick in crime. With algorithms they are even able to quickly narrow down people who have a high likelihood of being involved in violence. However, are these kind of predictive policing experiments worth the invasions of privacy they might cause and the unfair profiling they could blatantly encourage (theverge,2014)? As Hanni Fakhoury an attorney at the Electroning Frontier Foundation states: “ My fear is that these programs are creating an environment where police can show up at anyone’s door at any time for any reason.”

Of course, Big Data has a lot of potential for municipalities. However, governments should ask themselves if tracking everything of everyone is really the solution to increase safety of their citizens. At the moment, the chance that predictive systems will ensure that the police will show up at your door for nothing is higher, than that they prevent problems within your neighbourhood (theverge, 2014).

In my opinion the developments of these programs are positive, however before the government is not able yet to use Big Data efficient, my advice to them would be to first respect the privacy of their citizens and critically reconsider how they can use Big Data efficiently to increase safety.

What is your opinion; do you think that this way of sharing information and predicting data management can secure your safety? Or do you have better suggestions for companies like PinkRoccade?

 

References

Joosten, P. (2014, Juli 2). Big data bij de overheid: einde van de beleidsambtenaar? Retrieved October 4, 2014 from frankwatching: http://www.frankwatching.com/archive/2014/07/02/big-data-bij-de-overheid-einde-van-de-beleidsambtenaar/

Poort, F. (2014, October 3). Onze gadgets maken gemeentes gulzig naar informatie. Retrieved October 4, 2014 from Bright: http://bright.nl/onze-gadgets-maken-gemeentes-gulzig-naar-informatie

Stroud, M. (2014, February 19). Chicago’s new police computer predicts crimes, but is it racist? Retrieved October 4, 2014 from The Verge: http://www.theverge.com/2014/2/19/5419854/the-minority-report-this-computer-predicts-crime-but-is-it-racist

Grab some popcorn because it’s Popcorntime!

The movie industry has been battling the illegal sharing of movie content for quite some time now. It seems they face a multitude of groups and technologies that are sharing their movies illegally. In the beginning you could download these movies easily from a number of websites. Then people started downloading content trough BitTorrent protocol which basically means that you download the content from peers who also own a copy. This helped the websites to minimizing storage and upload capacity requirements. The website just provides a sharing service and an infamous example of a BitTorrent website is the Pirate Bay. The websites do not directly distribute the content but merely facilitate the sharing between peers. This makes them not liable in some countries, even when they are forced to shut down they can open up under a less regulated country.

Up until now you still had to download the movie in order to watch it, which took time and adding subtitles to a downloaded movie is always difficult and time consuming. There was no big mainstream platform that facilitated watching movies. You first had to know a good movie or look at recent movie releases before you had to look up a good BitTorrent link to download them.

But that has changed with the introduction of the website Popcorntime which allows user to chose movies and watch them directly via a streaming based platform on a BitTorent like protocol without downloading them. Users can choose from the latest movies in a Netflix kind of environment with or without subtitles from different languages. Watching movies from Popcorntime is entirely free and the site makes money on advertisements. The software is entirely open source and readily available for anyone who aspires beginning a illegal streaming platform. The movie industry pressured the initial company to quite, which they did, only to be restarted by someone else who was not intimidated. The platform is growing quickly and the company states that they have been installed on over 1.3 million devices and have 100.000 daily users in the Netherlands alone.
This type of innovation, although clearly illegal, is definitely one of the most disruptive to the industry. Although legal alternatives like on demand and Netflix are still more popular, the Dutch newspaper De Volkskrant questioned if the user friendly platform ‘could be the end of Netflix’.

Watching and downloading via this platform is illegal according to copyright law which applies in most countries. The Dutch court and the Dutch politicians however do not make a clear case on whether or not it is fully illegal to distribute copyright content or if it is merely condoned. In the past a court has lifted the ban on BitTorrent website the PirateBay because they felt freedom of speech and information was being harmed. The second chamber in the Netherlands also did not let a legislation law pas to make downloading completely illegal. However, the European court of Justice decided last April that this was unacceptable and ruled that illegal sharing of copyright content for the Netherlands isn’t allowed anymore. Meanwhile the BitTorent websites and Popcorntime are still up and running.

It seems like these platforms are here to stay and the movie industry should try and focus on a different business model in order to survive the onslaught that is being caused by this disruptive technology. Netflix for instance is offering a subscription based video streaming service and is very popular. My question to the readers of this blog post is what should the traditional movie industry do to remain profitable? What kind of business model should rivaling firms change to?

Disclaimer: watching and downloading movies without paying for it is still a crime and I am not condoning or encourage readers of this post to do so.

References:
http://nos.nl/artikel/603100-hof-blokkade-pirate-bay-opheffen.html
http://www.nu.nl/tech/3864057/illegale-filmdienst-popcorn-time-groeit-als-kool-in-nederland.html
http://www.androidplanet.nl/106182/popcorn-time/
http://www.nu.nl/binnenland/3748520/downloadverbod-per-direct-van-kracht-in-nederland.html

Facebook stops playing with your emotions (well they promise that their future research will be subjected to greater internal scrutiny at least)

Last June Facebook revealed that it had conducted a psychological research to test whether posts with emotional content are more engaging. This led to a worldwide furor after which the lead researcher at Facebook posted a public apology.

On Facebook people express emotions which are later shown on the news feed of their friends. As people’s Facebook friends often post much more than someone can view in a reasonable time, Facebook filters these posts with a ranking algorithm to determine which posts will be shown or omitted. Every time the average user visits the news feed, Facebook can display about 1,500 stories from friends, people they follow and other Facebook pages, but only approximately 300 are shown based on the ranking algorithm. This algorithm takes hundreds of factors into account, such as how often one comment on a specific friend’s pictures, and whether one always watches posted soccer videos for instance. To improve the ranking, Facebook develops that algorithm on an ongoing basis.

For almost 700,000 randomly selected users, Facebook manipulated that algorithm to influence the number of positive and negative posts they saw during one week in 2012 (January 11–18). This way, the researchers could test whether exposure to emotions led users to change the tone of their posts, especially if their posting behavior was consistent with that exposure.

Facebook tested both positive and negative emotions, by reducing the exposure to friends’ positive respectively negative emotional content in the news feed. Negative / positive emotional posts had a 10 to 90% chance of being omitted (based on the user id). The study did not affect any direct messages sent and all the posts of a friend were available on that friend’s wall or timeline.

Posts were classified as positive or negative if they contained at least one positive or negative word, as defined by Linguistic Inquiry and Word Count Software.  Both experiments had a control condition, in which a comparable percentage of posts in their news deed were omitted at random (so independent of emotional content).

The researchers found that moods were contagious. The users who saw less positive (hence more negative) content in their news feed wrote more negative status updates (a larger percentage of words were negative while the percentage of positive words was lower). Similarly, when negativity was reduced (so they saw more positive posts), the opposite pattern occurred and these users wrote more positive posts. The study also revealed a withdrawal effect. Users who were exposed to fewer emotional posts (positive or negative) in their news feed were less expressive overall on the following days.

As mentioned above, the disclosure of this study caused an outcry in June because Facebook didn’t notify the users up front about the manipulation of their news feeds. Apparently, researchers at Facebook had few constraints while conduct experiments on users and there was no oversight of top managers (research plans were approved by the group leaders).

On the second of October Facebook announced that it has changed the way it conducts experiments on its users. Future research on its users will be subjected to greater internal scrutiny from an internal review panel of senior researchers and top managers. Researchers also need to follow courses on the ethics of such studies. Facebook missed the opportunity to create an external review board to assess research with opposing interests.

Facebook has tightened up their research practices, but is it enough to prevent bad conduct of its researchers and protect its users against it?

Sources:

Albergotti, R. (2014). Facebook Tightens Oversight of Research, The Wall Street Journal, October 2, 2014

Goel, V. (2014a). Facebook Vow on Research Is Short on the Particulars, The New York Times, October 3, 2014, p. B1

Goel, V. (2014b). Facebook Tinkers With Users’ Emotions in News Feed Experiment, Stirring Outcry, The New York Times, June 30, 2014, p. B1

Kramer, A.D.I., Guillory, J.E. & Hancoc, J.T. (2014) Experimental evidence of massive-scale emotional contagion through social networks, Proceedings of the National Academy of Sciences, vol. 111, no. 24: pp. 8788-8790.

https://www.facebook.com/business/news/News-Feed-FYI-A-Window-Into-News-Feed

Next time you travel, workaway!

Whether you want to travel leisurely and just get to know another culture, take some time off but not feel completely lazy, or any other reason you want to travel for that matter, workaway.info is a great site to check out! Workaway is a platform that connects travelers, that is volunteers, with hosts, providing  them a way to exchange (leisure) work and travel, all over the world.

Specifically, hosts, that can be either individuals, families or other groups, can offer accommodation and food to travelers, i.e. volunteers, i.e. workawayers, in exchange for a few hours of their day in helping the host with any work they need done at the moment. This can include a variety of tasks, from babysitting, to teaching their native language, fixing up a summer house, looking after a farm, or even working at the front desk of a hostel. The platform is supported by the sponsorship of the workawayers, the demand side users, who pay a fixed subscription fee in order to see the complete list of offers. Hosts, supply sde users, do not have to pay a subscription fee.

Both groups benefit in various ways from this exchange. Those travelling get to, well, travel and get to know a new culture. Seeing as the work demanded is usually not very time intensive, they are provided enough time to invest in their cultural experience. On the other hand you have the hosts who obviously benefit from getting their work done for almost free (except for the extra food and accommodation efforts). Both parties also get to know each other’s cultural backgrounds and exchange their languages and traditions.

If you have some time off and are looking for a way to grow culturally and have a fun, unforgettable experience, consider becoming a workawayer!

http://www.workaway.info/

The bigger the better!

We already learned that bigger screens have a higher click-trough-rate (CTR), but data now shows that users also spend more time on applications when they have a larger screen. With Apple introducing a 5.5 inch iPhone and phablets becoming more popular, developers might want to focus more on applications for the big screened mobile devices.

A study by Localytics shows that people with a large screen spend 34% more time in applications than people with a small screen. Localytics based their study on more than 50 million Android and iPhone devices. As shown in the chart below, especially music and game applications show a big increase when having a screen bigger than 5 inch.

time_in_app_increase

It is easy to understand why games show an increase. Most games require quick finger movements, which obviously is easier on a large screen. Graphics are also better on large screened phones. On the other hand,  the researchers were surprised by the increase in music applications.  They suggest that this increase might come from the possibility to share, comment and like music.

As said before, big screens are getting more and more popular. When searching for smart phones with a screen of 5 inch or larger I found 315 results (!) for android phones only. With Apple joining the large screen market, we might all be having a large screen in the near future. Ten million copies of the iPhone 6 (4,7 inch) and iPhone 6 plus (5,5 inch) were sold in the first weekend only. And after only two weeks, Forbes states that Apple may have sold over 21 million iPhone 6 already, from which 4 million are the iPhone plus; so roughly 20% chose for the large 5.5 inch screen. I personally think this number is huge.

Do you think that the size of a phablet or 5.5 inch phone is a problem, or that people will get used to the big screens?

Sources:
http://www.forbes.com/sites/ewanspence/2014/10/06/users-prefer-phablet-applications/
http://info.localytics.com/blog/large-screen-devices-show-34-more-time-in-app?
http://www.91mobiles.com/list-of-phones/5-inch-android-phones
http://www.forbes.com/sites/chuckjones/2014/09/22/tim-cook-does-it-again-with-over-10-million-iphone-6-sales/

 

Big Data for World Cup and Sports

Germany’s winning at the World Cup has been often analyzed and the World Cup itself attracts a lot of viewers. Yet, there is something that many people might not be aware of.

The German Football Association (or in other words DBF) worked together with the German software company SAP to develop an application called Match Insights. This application analyses data about the German team members and their opponents with the help of data derived from their on-field performance. The resulting simulations can be viewed on tablet or smartphones, and can be used during pre-match preparations to increase the performance of players.

So, how does it work? Every player has a unique identifier and their movements are tracked digitally using cameras, while the pitch itself is transformed into a grid. Data derived this way can be transformed into key performance indicators, like movement speed, directional changes, number of touches etc. For instance, the German team knew it had to increase its passing speed prior to the game if it wanted to win. Players’ biometric data and the opponents’ play history with tactics were analyzed.Germany’s team was one of the first ones to understand the value that can be derived from aggregating Big Data.

The DBF is using SAP Match in an early adoption phase, but SAP plans to open up its app to other clubs and football federations later on as well. Traditionally, SAP specializes in making business operations more efficient.

Indeed, in The Huffington post R. Attias writes: ‘According to head coach Joachim Loew, this analysis was instrumental in Germany’s World Cup triumph.’ So, in a way we can say that the data revolution is also affecting sports, and is replacing more traditional analysis, like drawing out tactics on paper. Players can now use only their smartphones or ipads and basically train at any time and anywhere.

I think it is an interesting way of being able to use so many data on each player in the team and also about the opponents. So many data points can be combined, and apparently it can be quite useful as the German example suggests.

SAP1 SAP2

In addition, you can use this technology not only for better trainings, but you can even make this information available to sports journalism and the fans. One example of this is the stats.nba.com (The NBA’s statistics site), which got over 20 million views. Here, you can for instance find information on points, steals or the shooting percentage of Kevin Durant to that of Milwaukee Bucks, and the type of pass a player uses most. Though, that is only a supplement and it is not the main focus of the technology.

Nevertheless, sport stays the same, and in order to win you have to train and work hard!!! Indeed, there is no substitute for hard work in my opinion, but now with SAP teams can work also smart to become the best they can be.
What is your take on this issue? Let me know.

————-

Sources:
http://www.huffingtonpost.com/richard-attias/big-data-the-next-revolut_b_5800342.html
http://www.telegraph.co.uk/technology/news/10959864/Germanys-World-Cup-tactics-shaped-by-data.html?utm_content=bufferc8df5&utm_medium=social&utm_source=facebook.com&utm_campaign=buffer
http://www.bdlive.co.za/businesstimes/2014/07/27/big-data-a-winner-in-the-world-cup

Digitalisation in healthcare

plaatje post 2

Once a while everybody visits a doctor, whether is it about a regular consult, a control consult or collecting the results of a test. Actually, going to a doctor demands time, of both the patient and the doctor. In terms of efficiency, a popularized word nowadays, there is a lot to be gained in healthcare.

Together with FocusCura, the Dutch ‘Artsenvereniging VvAA’ is developing an application for a virtual consulting room, named PatientHub.

How does it work?
Due to a video connection between patient and doctor the more simple consults, like results, control and measurements, can be done. The only thing a patient needs is a device with internet connection.  The doctor takes the initiative and sends an invite to a patient. This is an e-mail with a corresponding link in it. As soon as the patient clicks on the link, a website with a virtual waiting room will appear. This means, you will have to wait until it is your turn to enter the doctors room. When it is time for your appointment, a video connection will open on your computer screen. During a consult a third-person, like a family member,  can join the conversation as well and photo’s and MRI results can be shared among the members.

Downside
A lot of doctors and patients are quite sceptical regarding digitalisation of the healthcare industry. They do not trust the internet and all its accompanying features. Especially the elderly are suspicious about the digitalisation. To attract this group of people, the application must be extremely simple and undemanding. Otherwise, this group will quit using it.

Benefit
Implementing this application will lead to less patients physically visiting a doctor and a reduction of the time needed per customer per consult. Eventually, this results in more efficient work time. Basically, the phrase we all wanted to hear.

Is it safe?
According to FocusCura the application will be safe. This is due to the fact that the patient will only be recognizable by the doctor and no sensitive information will be saved and stored. Besides this, the connection will be directly between doctor and patient, thereby controlling the content of the conversation. For this connection a specialized firm will develop a bespoke technology.

So my question is, will this application actually increase uptime? Will patients indeed choose visiting a virtual doctor or do they prefer the traditional consults and benefit from the face-to-face time with the doctor? And what about the elderly? I mean, we are living in a society with an increasing ageing problem.

Sources
Changinghealthcare.nl, (2014). Veilige virtuele consults met huisarts via app | changinghealthcare.nl. [online] Available at: http://www.changinghealthcare.nl/veilige-virtuele-consults-met-huisarts-via-app/ [Accessed 6 Oct. 2014].

de Winter, B. (2014). Duizend huisartsen openen virtuele spreekkamer. [online] NU.nl. Available at: http://www.nu.nl/internet/3876343/duizend-huisartsen-openen-virtuele-spreekkamer-.html [Accessed 6 Oct. 2014].

Patientrewardshub.com, (2014). [online] Available at: http://www.patientrewardshub.com/ [Accessed 6 Oct. 2014].

Beacons beckon. Interact with your surroundings (and get discounts)

Your interaction with the world just entered phase 2.0. Estimote, a Polish start-up, is revolutionizing the mobile world as we know it. The idea is simple.

Beacons are a low-cost piece of hardware — small enough to attach to a wall or countertop — that use battery-friendly, low-energy Bluetooth connections to transmit messages or prompts directly to a smartphone or tablet.

beacon

Just imagine the possibilities beacons can offer. When going to a store you can find out which products are on sale at a given time, watch videos of the products or even browse product reviews on demand. When at a music festival you could quickly access the concert lineup, check which stages artists will be playing on and much more. How about your companies’ supply chain? If the company decided to change to a demand pull strategy it could implement beacons to control the inventory/stock levels of products at given warehouses or in transit. And these are only the business perspectives!

I believe that beacons will be successful based on 3 key facts:

  1. Over 40% of shoppers look for offers on their mobile devices while they’re in store
  2. Only 5% of in-store shoppers have a retailer’s mobile app installed on their phone
  3. By 2017, roughly half of all in-store transactions will be completed via mobile devices

BI Intelligence conducted some research to find out whether and how Beacons were living up to their expectations. Do they have the power to transform businesses? Some of the more interesting findings are presented below.

  • Beacons could speed up the checkout process with a completely contactless payments system.
  • Consumers would be willing to try out beacons as a mean of automating their homes. Walk into a room with you smartphone and the light turns on. You don’t even have to clap twice anymore…
  • It’s more tricky than expected. You have to have Bluetooth turned on when using Beacons (and we know how fast that kills battery life), you have to accept location services and agree to receiving notifications. The topic is still sticky legally.

The beacon competitive landscape is gaining traction. Apple will most likely soon announce their iBeacons, for which they already have a trademark, Paypall is considering entering the market and small first-movers (including Estimote) are trying to hang on and challenge the giants.

In my opinion beacons will enter our daily lives in the near future. When comparing the low cost of implementation with the big potential benefits it is quite clear that companies will jump at the opportunity to have these products. The only consideration is: will this not be too intrusive into our daily lives? Even more of our data and information will be available to giant corporations…


References:

http://www.businessinsider.com/beacons-and-ibeacons-create-a-new-market-2013-12

http://estimote.com/

http://en.wikipedia.org/wiki/IBeacon

http://www.futureplatforms.com/newsletter/2013/11/28/beacons-set-to-revolutionise-mobile/

Software-as-a-Service Pricing Strategies

I’d like to extent the discussion on pricing strategies for businesses that operate on a Software-as-a-Service (SaaS) basis.

What is SaaS? 

Software that is rented rather than purchased. Instead of buying software and paying for periodic upgrades, SaaS is subscription based, and all upgrades are provided during the term of the subscription. When the subscription period expires, the software is no longer valid.

SaaS can be implemented with local applications that expire after a certain time, but it is ideally suited for cloud computing in the Internet and Web browser-based applications, which can run in any desktop or mobile device, no matter the operating system. In this model, the applications are maintained in the service provider’s datacenter, and every time users launch their browsers and log on, they get the latest version. In addition, the data can also be stored in the provider’s datacenter. (PCmag.com Encyclopedia)

Why does pricing matter?

As mentioned during the lecture, pricing matters not only because it creates the opportunity to differentiate your customer base based on their needs, but also because pricing has a certain psychological effect inherited in it. In the microwave example from our lecture the buyer decisions had significant differences when choosing from two options or three options. For SaaS companies this matters because they are able to deploy different types of products or possibilities based on their customer needs. For example, software can be licensed against a certain price depending on variables such as usage, users, products offered or (extra) services offered to name a few.

In a blog post from priceintelligently.com the pricing strategy of The New York Times. The NY Times has difficulties -as many newspapers do- in adjusting to the digital age. Although not exactly a SaaS company, the case does offer insights into the pricing difficulties of online subscription services. The NY Times has different pricing plans based on the type of subscription you prefer. Without even mentioning the specific prices, here’s an overview of their options:

Screen Shot 2014-10-06 at 12.45.20

Quite a lot of options, hey?

The main proposition that is being made in the priceintelligently article is simplicity: 

“If consumers understand exactly what value they’re receiving at a given price, they’re more likely to make the purchase.”

Since there is no “one size fits all” strategy in SaaS due to the diversity of customers, a good step to eliminate complexity in pricing is a value-based pricing strategy. In order to do so, one can follow a set of steps that will help you define the right pricing for your products: (read the blog article for a more detailed description on how to achieve these steps)

  1. Identify the target customers
  2. Quantify the value the service provides for your target customers
  3. Determine willingness to pay
  4. Determine the operational costs to deliver value

So basically it all boils down to figure out what value you offer, and how much a customer is willing to pay for this.

Examples

Let’s look at a few different pricing strategies to see what this comes down to in practice (examples from Kissmetrics.com:

Salesforce

Salesforce has chosen to provide five options to its potential customers. All options offer a free trial and every option provides all features from the cheaper options + additional features.

Screen Shot 2014-10-06 at 12.10.16

HubSpot

HubSpot offers a two step pricing strategy. First, three packages are offered that are differentiated based on the type of client (from small businesses to marketing teams in large companies). The second step is to choose the amount of contacts you would like to manage in your CRM. These two together determine your monthly price.

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HasOffers

HasOffers uses a three option pricing scheme, however the interesting part is that their third option is not a static price point but invites the potential customer to get in touch. This offers the advantage that in the price range above enterprise ($799/month) they can provide customised deals to customers that have high needs. This makes sense because (a) the value of these type of contracts is high enough to dedicate a sales person to make the deal (b) they can cater to specific needs that these enterprises have.

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What do you all think? Any preferences for specific pricing models when buying subscriptions? Personally I’m a big fan of simplicity; not too many options but a clear vision on how the product offers value for its price. HasOffers’s extra option to get in touch can be very beneficial in markets where there’s opportunity for high value contracts on top of the standard options, but the decision on doing so should make sense in a business sense; Salesforce chose five options and feels like this is enough for their product range without offering customised deals.

Let me know what you all think about different pricing strategies!

References:

http://www.pcmag.com/encyclopedia/term/56112/saas
https://blog.kissmetrics.com/saasy-pricing-strategies/
http://www.nytimes.com/content/help/account/purchases/subscriptions-and-purchases.html

Where did you get that smile?

My friend always eat great food and have beautiful smiles. I always aks myself: where do those guys go for dinner, who is their dentist? Now, there is an app who reveals their secrets: WhoWeUse. So: ‘Sit back, relax and know that the search is over.’ (WhoWeUse, 2014).

WhoWeUse is the recommendation app for local services. It imports your contacts and scans them for services in your area. After organizing your contacts, the WhoWeUse application will sort the local services into different categories like the restaurants where my friends go or the dentist treats my friends (Techcrunch, 2014).

Screenshot

Why?

Of course there are other recommendation services such as Yelp or Angie’s list, but these are all based on reviews from anonymous users (Techcrunch, 2014). With WhoWeUse, you are finally able to use recommendations from the ones you trust, your friends and family.

Furthermore, the concept was already happening. Every one of you must have had given restaurant advice or even advice for a doctor when having a suspicious itch. Now, there’s an app for that!

How?

Like I already mentioned, the app will have to import your contacts/services from your address book and categorizes them. But they stay somewhat vague regarding how the application will make a distinction between your contact friends and family and your other contacts. I think Facebook integration is the way to do this but this information cannot be found on their iTunes preview page (iTunes, 2014).

Money, money, money.

If recommendations amongst friends and family were already happening without the WhoWeUse app, how are they planning to make money with this app? WhoWeUse assumes that most local services do not have the time, money or (online) knowledge to promote themselves to their local residents. WhoWeUse wants to take over this task and they want to become the intermediate where local services can be reserved and paid within their application (Techcrunch, 2014).

Rowan’s opinion.

I think this app is a great initiative, it is fun to discover restaurants or other local services that your friends or family visited before you. But it also an app that could fall into the pool (or folder) of rarely used apps on your phone. How many times in a year are you looking for a dentist? How many times a year does your car break down? Personally, I think this application will be used at first out of curiosity and after a few months only a few loyal users will remain. And since an app as WhoWeUse needs users to become valuable as an information good, it will be a challenge for them to stay interesting.

Thanks for reading!

Your opinion

can be found in the comments.

Sources:

– http://techcrunch.com/2014/10/02/whoweuse-launches-a-new-app-for-local-service-recommendations/

http://www.whoweuse.net

– https://itunes.apple.com/us/app/whoweuse/id916538375?mt=8

The Need For a Chief Analytics Officer

CAO (IS)

I recently came across an article on CIO.com in which the increasing need for CAOs was suggested. What I found interesting, is that article emphasises the demand for CAOs and their strategic impact on the whole organization.

The role of CAOs

Most organizations desire to turn big data into a valuable strategic asset.  Nowadays, the CAO is finding a home in data-rich industries like healthcare. Although still not as prevalent as two other newish C(hief)-suite roles — the chief digital officer and chief data officer — the CAO may represent an inflection point in the organization’s digitalisation, signalling a tendency from managing data to applying it more strategically across the business.

Often, businesses have deployed analysts and data scientists across several layers in the organization, but they aren’t yet harnessing the collective wisdom or economies of scale. These companies are the prime candidates for a CAO. In order to organize analytics better and be able to justify someone for strategic decisions around data, companies must hire a Chief Analytics Officer.

There seems to be plenty of upside in adopting a more strategic approach to big data and the impact it can have. In a recent study by management consultancy EY, for example, 69% of companies said customer experience was vital to their growth strategies, but just 12% said they take full advantage of analytics to extract customer insights and deliver better customer service.

So, a brief conclusion so far is that in the field of leadership, a point is reached that, from a competitive standpoint, it’s time to dedicate investment and create a standalone, centralized analytics function.

Adding a strategic layer

CAO’s can add two key elements: improving operations and identifying future growth opportunities. It’s an analytics function, not a data function. Ultimately, CAOs need to lead the decision-making, not just the data management component. The CAO’s role as a cross-functional strategist, combined with organizations’ increasing reliance on data to drive business decision-making, supports the suggestion that the title is no flash in the pan.

Companies will rely more and more on data to make decisions and to improve how they interact internally and externally with partners and clients. One important skill for CAOs is their ability to act as a conduit between IT and the rest of the business. For example, bridging the gap between the technology teams and business teams is one of those skills. CAOs turn data into a common language that both business and IT can understand.

So lastly, where does the CAO fit in the organizational box? The article says there is no standard box on the organizational chart for the CAO. According to several interviewed CAOs, they sit in unique spaces within their corporate hierarchy.

Do you agree with the increasing need for CAOs?

Sources:

O’Regan, R. (2014) ‘Chief analytics officer: The ultimate big data job?’:  http://www.computerworld.com/article/2688352/chief-analytics-officer-the-ultimate-big-data-job.html#difference

http://en.wikipedia.org/wiki/Chief_analytics_officer, retrieved on 5th of October, last updated on the 1st of June 2014

Recommended For You!

You might also like, Here’s what other people ordered, We think you’ll like this, and last but not least: “Recommended for you!”. They are all highly recognizable phrases to anyone who’s used any internet service or store ever. But how do these recommendations work, why do firms do it and could we go against what’s recommended to us?

Recommended for you

How does it work?

In a 2013 interview, Netflix’s Carlos Gomez-Uribe, VP of product innovation and personalization algorithms and Xavier Amatriain, engineering director explained how they are controlling what you watch. They say that the metadata behind their content allows them to find similarities between movies/shows. Next, they track you, everything you do: what you played, what you’ve searched for, how you’re browsing through their services and even when you’re doing this and on what device. At this point they connect you with content that they either outright predict you will enjoy or content that similar users have already indicated they enjoyed.

Netflix

Why do firms do it?

The answer to this question is fairly obvious and relates to a recent 2014 article by Huang, Zhong and Yao on targeted marketing. The better a firm can analyze and understand their customers and how their products are perceived, the better they can connect the right customer to the right product, thus creating additional value. The customer value resulting from Netflix’s recommendation practices is also well known, not having to spend the time to search for what you want to watch is perceived as pretty valuable by customers. A recent article on Forbes.com they concluded a price increase for Netflix would actually result in significantly higher profits.

Can we go against the recommendations?

Short answer: Yes, but doing so will take more and more effort as time progresses. As Netflix improves their processes, they will understand your preferences even faster while also making their suggestions more automatic, thus alleviating even more of the manual actions you would otherwise have to undertake. So in the extreme event that your personal preferences make a full 180 degree turn, you will have to put in more effort than ever before to change the input Netflix has aggregated on you. Which I assure you will take considerably more time than just changing the TV channel.

Sources:

Wired.com, Netflix Algorithm, as approached on October 5th 2014, http://www.wired.com/2013/08/qq_netflix-algorithm/

Forbes.com, The impact of Netflix’s price rise, as approached on October 6th 2014,http://www.forbes.com/sites/greatspeculations/2014/05/15/the-impact-of-netflixs-price-rise/

Huang, J., Zhong, N., Yao, Y., 2014, A Unified Framework of Targeted Marketing using Customer Preferences, Computational Intelligence, Vol. 30-3 p. 451-472

Uber ethics

The concept of Uber doesn’t require a lot of explanation: Uber directly connects taxi drivers and consumers without using a taxi company. Via web browser or smartphone app, customers can order a taxi using automated software and see how other users have rated the driver.

Uber-valuation

The online ride-sharing app has quickly become a globally operating, successful business and has turned the taxi market upside down with its disruptive concept. On September 30, five years after its initial launch, Uber announced that its services are available in 45 countries, over 200 cities and translated in 22 languages (Uber, 2014). Its global sales and number of taxi rides doubles each six months and according to The Wall Street Journal (2014), the company is valuated at US$18.2 billion.

Legislation

However, despite its rapid growth, more recently the company has collided with local legislation and established taxi companies everywhere. Practically in every country, the introduction of Uber has led to commotion. The firm has been criticised for what some have described as aggressive business practices in cities around the world and therefore in many cities, local cab firms and drivers have staged protests against the service. Barely two months ago, German cities Berlin and Hamburg decided to ban Uber’s app, saying “it needed to protect passengers, Uber’s drivers, and the city’s licensed taxi drivers” (Kell and Smith, 2014).

Controversy

Recently, Uber co-founder Travis Kalanic told the BBC he is not bullying local taxi firms and drivers. “If [consumers] can get a reliable ride that’s half the price of a black cab, shouldn’t they have the choice?” (BBC, 2014)
I personally think it’s unfair competition for Uber and similar ‘private taxi agency’ services to compete with existing licensed taxi companies.

What do you think? Is the introduction of Uber fair to local taxi drivers with licenses?


References

-BBC (2014) Uber boss Travis Kalanick: I’m no bully, http://www.bbc.com/news/technology-29475059, retrieved October 5, 2014.

-Uber (2014) Uber for business now available in 45 countries, http://blog.uber.com/globalbusiness, retrieved October 5, 2014.

-Rusli, E. M. & Macmillan, D. (2014) Uber Gets an Uber-Valuation, http://online.wsj.com/articles/uber-gets-uber-valuation-of-18-2-billion-1402073876, retrieved October 6, 2014.

-Kell, J. & Smith, G. (2014) Berlin bans Uber app, citing passenger safety concerns, http://fortune.com/2014/08/14/uber-berlin-band/, retrieved October 6, 2014.