If you’re like me you don’t buy into hypes. It took me close to three years after most my friends had Facebook to finally create an account. Basically it comes down to being skeptical about (social) trends and therefore extra critical. Nowadays big data is everywhere, you can’t open a tech magazine or visit a tech website without reading something about it. But what is big data really? And will we need to adjust our view on the possibilities or should we all just jump on the bandwagon and go with the flow.
Let’s start at the beginning namely what is big data? A simple google search yields a number of varying results:
“Big data is an evolving term that describes any voluminous amount of structured, semi-structured and unstructured data that has the potential to be mined for information”. – Margaret Rouse
“Big data is just another name for the same old data marketers have always used, and it’s not all that big, and it’s something we should be embracing, not fearing”. – Lisa Arthur
“Big data is a buzzword, or catch-phrase, used to describe a massive volume of both structured and unstructured data that is so large that it’s difficult to process using traditional database and software techniques”. – Vangie Beal
Interestingly enough big data as the name implies has less to do with acquiring vast amounts of data than it has to do with how businesses analyze that data to get the most out of it. Businesses have been gathering vast amounts of data for quite some time, it is only now that the analytics behind the scenes (data) is improving to a point that these vast amounts can be turned into meaningful insights. But even then companies need to ask themselves if they are fully ready and able to turn those insights into useful decisions.
Market research firm Gartner has studied the effect of hyped trends and has predicted big data is on or close to the peak. This has withheld certain companies from adopting the “new” technology says Frank Palermo, senior vice president, Global Technical Solutions Group, Virtusa. Instead they are going to wait and see if the technology can reach the so called ‘plateau of productivity’ and truly live up to its expectations and deliver. So for my fellow Bimmers out there when that time comes to choose you’re electives, you may want to stop and reconsider. Big Data may not be the next big thing, so unless you’re willing to take the risk or better yet be the deciding factor in making Big Data work then go for it!
When most people think of video games they think of Xbox, Playstation, and the Wii (Consoles). For the last 20 years Microsoft, Sony Entertainment, and Nintendo have attracted millions of users and thousands of game developers to drive demand for video games and build a large customer base. Although the differentiated features of each platform keep it from a “winner take all” structure, the big players are battling for dominance with the newest platforms: Xbox One, PS4, and Wii-U.
A fourth platform that takes a unique approach is largely overlooked: Steam, the video game platform on personal computers. In this post I will examine the general network effects of the Steam network and the role an open platform strategy plays in it.
Steam has almost the same network rolls as the Xbox and PS4:
Demand Side User: End Users
Supply Side User: Game developers
Platform Provider: Steam
Platform Sponsor: Valve
Its difference lies primarily in the pricing structure of the platform.
Subsidy Side: The gamers make up the subsidy side as they do on the consoles. The most important difference between Steam and the Consoles is that Steam users typically do not require additional hardware. Steam is an application provided freely on the internet, and there are free to play games available for download. This is a significant subsidy afforded to users that already have a personal computer.
Money Side: The game developers make up the subsidy side as they do on the consoles. The largest difference here is the reduced distribution costs to participate in the network. While recent Consoles have started to promote digital distribution, most gamers use physical disks. In the UK, 74% of console gamers exclusively buy disks. Steam, on the other hand, operates purely digital downloads. As information goods have negligible reproduction costs, the capital investment required to join the steam platform is much lower than on consoles. As a result, there is a significant number of independent game developers in the Steam network that cannot afford the console network.
Cross-Side Network effects:
The gaming industry has very strong positive cross-side network effects. Gamers want access to the best games, and game developers want access to the most gamers. Because the homing costs is so low, the user base of Steam has grown rapidly. It currently has 100 million active users (Valve 2014), compared to Xbox at 76 million and PlayStation at 110 (PlayStation figures account for PlayStation Network, which includes PS2, PS3, and PS4 – 10 years of console iterations). This user base has certainly attracted game developers. Most console developers have their games on Steam, and there are hundreds of independent developers whose games are not on consoles but available on steam.
Same-Side Network effects:
The same-side positive network effects for gamers on Steam are similar to Consoles. Users want to play with friends, and can do this through the steam network.
More interesting is the same-side positive network effects for independent developers. A large restriction on indie developers is marketing and advertising budgets. They typically invest most capital into the game and hope it gains traction through online media. Steam, however, has a portal dedicated to indie games where users can interact with developers and contribute to their development through pre-orders. As more high quality independent games are available on Steam, users demand for indie games rises and Steam becomes more attractive to independent developers. As there is significant variety in game genres there is low negative same-side network effect for developers.
In conclusion, the heavy subsidy for the gaming side and the relatively lower costs for game developers has created an incredibly successful gaming platform set aside from traditional gaming consoles. As technology continues to develop and personal computers continue to outmatch technical specifications of gaming consoles Steam may very well envelop the console networks.
In the 6th lecture on Information goods of the Information Strategy Course, the example of Radiohead’s album was given; the album they sold with the Name Your Own Price mechanism. Next to it being an innovative pricing strategy, especially at that time, an interesting observation that was made about the sales of this album in subsequent research was about the impact of those online sales on offline sales of the album (Bourreau, Dogan and Hong, 2013). Apparently, even though the online sales had been really successful, the offline sales remained unaffected by all of this.
This got me thinking about the possible effect of online sales on offline sales in a related area, namely musical instruments. The effects of digitization and the use of internet have been mentioned throughout the course, and some of those I will discuss in relation to this topic of musical instrument stores (MIS).
First of all, the reach of traditional brick-and-mortar MIS has increased, because of the possibility of online sales and the ease by which they can get to the customer and the customer to them through the internet. For a certain part of the goods MIS offer this has a positive effect; take for example guitar strings: I usually buy the same pack of guitar strings whenever I need them, so there is no need for me to go to the store, I could just order them online and have them delivered right to my home.
A threat to the brick-and-mortar MIS is the fully online MIS, which does not have the costs of a physical store, has the same reach online, and because it does not need a warehouse in close proximity to the customer, it could stock products in a low-cost area. In the guitar string example: I now am able to search online for the store that offers the guitar strings I am looking for at the lowest price, and still have them delivered right to my home.
Going to the physical store is not a requirement anymore to purchase goods from that store, which at first glance seems like a big advantage for customers, like it would be for many types of stores. However, one very important aspect of musical instruments is that you play on them, meaning a requirement for a physical connection. Even though the internet has many powers, it does not allow you to physically hold the instrument you are looking for, and exactly that physical connection is needed for the customer to determine product quality.
So this is a big advantage for offline stores, right? Again, at first glance it might seem so, but I think the offline store is still at a loss here. What I myself usually do when I am looking for a guitar or related products, is that I go to the offline store, test the product out as long as they will let me, and then look online where I can get it for a good price. Here, the offline store sort of helps the online store, without getting anything in return. The offline store provides service, it lets you test all their products, but it has no actual guarantee of a return.
When I searched on Google for research similar to the one done about Radiohead’s album, on this topic of MIS, I got no relevant results. It might be interesting to find out how (much) those online MIS actually influence offline sales, and how the actual dynamics of service and physical connection play out.
Ling, T. (2014). Information Strategy Session 2: Information Strategy.
Ling, T. (2014). Information Strategy Session 6: Information Goods.
Bourreau, M; Dogan, P. and Hong, S. (2013). Making money by giving it for free: Radiohead’s pre-release strategy for In Rainbows.
In this blog we discuss Xbox one strengths, weaknesses, opportunities and threats (platform mediated networks). What do you think about this analyses?
Large user base:
Microsoft previous console Xbox360 has sold almost 85 million units. Xbox is well known brand in the gaming industry so it is easier to introduce a new product to the market. There is lots of potential for the product.
Microsoft first introduced Xbox Live in 2002. It was first console online service in the market. Many critics have stated that it’s still the best online experience in the console market. This is the service how Microsoft can differentiate from its competitors.
Most of the Xbox One sales come from USA. USA is really big market area but it’s still too small market to get enough money to cover all the cost that designing and marketing new gaming device take. Also every new feature that comes to the Xbox One is firstly launched in USA. Maybe after year or so the same feature comes to the European market. There are 500 million consumers in the Europe (ec.europa.eu, 2014) so there is a really huge market opportunity.
After 14 years china removed their console ban and Xbox One had first-mover advantage (http://www.digitaltrends.com, 2014). They were first company that start selling video game consoles (Xbox One) after that ban. $13 billion Chinese gaming market (www.digitaltrends.com, 2014) has lot of future potential and first-mover advantage is really big opportunity to any gaming company. Microsoft also has some brand visibility in China due to their other non-gaming products.
Xbox Live unite players all around the world. With this service Microsoft can also start selling games and other products directly to the customer. In the future they can change console markets and cut all middlemen and start providing different products only this way – digitally.
PS4 is a major competitor for Xbox One. PS4 have same target group and they release similar games for their system. If PS4 wins majority of the market it is possible that game developers start to release games mainly on PS4 and gamers choose PS4 platform. It is really important to grow Xbox One install base at the beginning of the life cycle and beat PS4 in the major markets.
Consoles are only one platform to play games. People are moving to play games with different devices like tablets and mobile phones. The change is already seen in handheld markets and it’s only a matter of time when people find cheaper and not so time consuming ways to play games.
On September 30, during a preview event for that operating system, Microsoft officials revealed its new name, which is Windows 10. During the Microsoft planning and early development process, Windows 10 was codenamed “Threshold”, which like a number of recent Microsoft ones, came from Microsoft’s Halo franchise.
Because the last version of Microsoft’s Windows platform was named Windows 8, many assumed the next release would be Windows 9. Many inside and outside the company used “Threshold” and “Windows 9” interchangeably when discussing the up-coming Windows release. There have been rumors that Microsoft might name Threshold as “Windows X,” “Windows 365,” just plain “Windows” or “Windows One.”
But Microsoft picked with Windows 10 instead because they wanted to signify that the coming Windows release would be the last “major” Windows update. Going forward, Microsoft is planning to only make regular, smaller updates to the Windows 10 codebase, rather than pushing out new major updates. Windows 10 will have a common codebase across multiple screen sizes, with the UI tailored to work on those devices.
When it comes to the so-called “major” version update of “minor” version, the Semantic Versioning 2.0 Introduction (SemVer) clearly states that the point of versioning is to help manage dependencies. It specifies that a product should be versioned as follows:
MAJOR version when you make incompatible API changes.
MINOR version when you add functionality in a backward-compatible manner.
PATCH version when you make backward-compatible bug fixes.
But for operating systems, things do not always follow this rule. Apple’s OS X is a case in point. Version 10.10 indeed contains breaking API changes from 10.9.
Each year Apple releases a major version of iOS but only a minor version of OS X, this is because iOS is young and needs to mature, but OS X is at Version 10 and needs to stop growing. Moreover, Apple increments the major iOS version number even when there is little discernible change in the operating system. For example, the move from iOS 6 to 7 was visually appreciable, while from iOS 7 to 8 the change is not that significant.
Another point worth to be mentioned is that Apple no longer uses number to name its OS X operating systems, instead they use animals like “Snow Leopard”, “Mountain Lion” and this year a place “Yosemite” to name the operating systems. This strategy allows the version to also serve as brands. The rationale behind is that people hate to remember those useless and meaningless version numbers, and cool version names can attract public attention, but of course there are no standard on such an arbitrary strategy and it’s hard to evaluate it.
Software versioning is an interesting topic, what do you thing about it ?
Pundits have long called for transformation of news media that will bring new business models better fitted for the digital age. It is still common that publishers offer separate subscriptions for online and offline channels or expensive bundles for mobile access. Efforts to breath new life into the publishing business came not only from publishers and media companies but also technology companies such as Apple, Google, Microsoft. Apple’s Newsstand app, which was introduced in 2011 as a hallmark feature of iOS 5, allowed publishers to recreate and publish their magazines on the iOS platform. Magazines published in the Newsstand app behaved differently from regular apps and had more rights that ought to make them more attractive for publishers and subscribers. Apple provided the tools for publishers to offer free and paid subscriptions and the possibility to push new content to subscribers. Similar solutions were also created by companies such as Samsung and Google. Large and small publishers saw this as an opportunity to reach new customers, with news/magazine apps that stood out from other apps.
Marco Arment, one of the first employees at Tumblr and creator of Instapaper, took on the challenge to create a magazine native to the digital age and perfectly suited for the capabilities of mobile devices. the result was The Magazine.
Introduced, in 2012, the Magazine was a Newsstand app that released weekly issues. Because there are many freelance writers who produce content for their own websites, Marco figured he could attract those writers to produce content for The Magazine. For writers it was attractive to write for The Magazine, since the company allowed all contributors to retain ownership of their content and let them publish it on their own sites two months after it was published in The Magazine. Marco believed that the new tools created a new category for magazines such as The Magazine:
But just as the App Store has given software developers a great new option for accepting direct payment, Newsstand has given publishers an even bigger opportunity with subscription billing and prominent placement. Yet most publishers aren’t experimenting with radical changes.
There’s room for another category between individuals and major publishers, and that’s where The Magazine sits. It’s a multi-author, truly modern digital magazine that can appeal to an audience bigger than a niche but smaller than the readership of The New York Times. This is what a modern magazine can be, not a 300 MB stack of static page images laid out manually by 100 people.
On the money side, The Magazine relied on paid subscriptions from readers and individual issue sales. This revenue was used to pay writers (the subsidy side),editing, illustration, proofreading, design, and programming for each issue.
Although The Magazine was fairly popular and highly profitable according to the owners, the company recently announced that it is shutting down.
Why did it fail?
Apple’s Newsstand is also partially to blame. Because all apps created for the Newsstand are locked into the Newsstand app, they are no longer visible on the homescreen. And because the average mobile device already has dozens of apps fighting for attention, out of sight means out of mind for apps locked in folders. Furthermore, these apps also often faced download issues, causing frustration for subscribers. But unfortunately, the main reason for shutting down is the lack of subscribers. The Magazine did not have a high enough retention rate and was losing subscribers faster than it was gaining them.
What are the possibilities?
The Magazine has shown that it is possible apply a new business model for news media. However, just applying the newest technologies and building a high-quality app was not enough. Publishers already have the writers, they need to find a way to gain and retain as much subscribers as possible.
Do you think large publishing houses should take example?
Do you want to make a lot of money on YouTube? This is your solution: Start a MCN!
Since the launch of YouTube in 2005 everyone became able to easily upload, view and share content on the Internet. Nowadays, nine years later, YouTube shows incredible stats. Each month, more than 1 billion unique users visit the website and over 6 billion hours of video are watched. Every minute, 100 hours of video are uploaded to YouTube. At the moment, YouTube is localized 61 countries and across 61 languages. And, millions of subscriptions happen each day, the number of daily subscriptions is up more than 4x since last year.
The last few years, the number of MCNs is rising. With all the content out there, MCNs are a key element in the professionalization of YouTube.
What are Multi Channel Networks?
Multi-Channel Networks are entities that work with multiple YouTube channels. Most of the time to offer content creators who run their own channels assistance in areas. These areas can be product, programming, funding, cross-promotion, partner management, digital right management, monetization/sales, and audience development. The multi network channels provide production, traffic, monetization and rights management services to content creators and brands, what means that they are closing a gap in YouTube’s ecosystem. They offer trusted environments with higher quality content and monetization standards. In exchange they receive a percentage of the AdSense revenue from the channel.
MCNs operating on YouTube are facing a big interest from financial strategic investors. Many MCNs are already sold to these companies. For example, Awesomeness TV (launched in June 2012) is sold in April 2013 for $33 million to DreamWorks. And, Maker Studios is sold in 2014 to Disney for $500 million.
If you want to work in a big money business, I advise you to start your own MCN. It is not that difficult, and there are a lot of good examples out there. MCNs are becoming more and more valuable. Who knows when the top is reached?
In the end of 2000s and start of 2010s a new cultural trend became increasingly evident. Nearly everyone has heard about it. Hipsters. Some think, that it is the culturally aware part of society that favors counter-culture, progressive politics,an appreciation of art while others despise the phenomena as being “essentially people who think of themselves as being cooler than the world.” The definition I personally like the most is not a real definition: “Hipsters can’t be defined because then they’d fit in a category, and thus be too mainstream.”
But where did those anti-mainstream skinny jeans wearing people come from? Believe it or not, the field of Information Strategy might help us to answer the question. So there we go.
In 2006, the professor of Massachusetts Institute of Technology, Eric Clemons introduced The Long Tail phenomena – a concept that describes that, in the presence of IT enabled business models , retailers have greatly increased the set of choices available to consumers, and that more and more consumers are selecting items from among the least popular elements of the set. The change in consumer purchasing behavior is about trading out (seeking for better fit products), and it is about being better for each customer. Informedness allows consumers to know everything they want to know about products and services of interest to them. Producers and retailers know at least as much as consumers and this allows them to make an important interference to tailor to exact needs of the consumers.
So now that we know a bit about both of the sides lets answer the main question: who’s the mother of hipster? Shortly, it’s the information enabled business model. Just think about it. Whatever the hipsters consume, it has to be non-mainstream, unique, one of a kind. Only recently the technology has enabled for masses to actually gain access to unique products. A hipster needs a book about that 19th century gay community in Paris? He goes amazon.com A hipster wants to find listen to that band, that does not exist yet. Sound Cloud. A tailored wooden bow-tie made by teenage artist from Latvia? Etsy. Customized frame for one of a kind totally-not-mainstream fixie bike. Ebay will do the magic. Never before had the consumers have the possibility to actually find out what is that weird stuff they like and then buy it with a click.
Here you go guys. It’s the information technology that has turned the more curious and individuality seeking part of society into hipsters. One could say: yeah, but I could just go to boutique shops or designers and order my stuff! Yes, that is indeed possible, however such business models could never provide the scale and variety necessary for hipsters to actually turn into a globally present contemporary subculture.
So what’s the new definition of hipster? It’s the consumer, that conscientiously engages in long tail purchases.
The idea about IT enabled business models associated with hipsters raises more questions about the industry. As we know, the one thing hipsters hate the most, is being mainstream. This is also the reason why they are so hard to identify. Now, with the emergence of technology, hipster movement itself becomes so huge, that one could assign hipsters to mainstream subculture. Obviously, hipsters will seek for ways how to dis identify themselves with a particular subculture. So, what are the possible scenarios of cultural changes and how should the IT enabled businesses react to these changes?
A new trend is taking over the way E-Retailers are doing business. Nowadays, 24-hour delivery services are simply not fast enough as on-demand; same day delivery services are exponentially growing across Europe, US and Asia. Tech titans such as Amazon and Google and eBay aim to offer customers door-to-door delivery within the hour of their convenience.
This on-demand service boom in the E-retail industry was catalyzed by the transformational change in strategy by e-commerce leader, Amazon. The firm decided to shift away from placing warehouse in cheap, remote locations but rather build its centers next to heavily populated metropolitan centers. This strategy enabled it to offer same day delivery at the cheapest price, or even for free. Firms such as Google and eBay have soon followed Amazons footsteps.
Traditional, brick -and-click stores possessed a major advantage in this respect as corporations such as Sears and Walmart, “have inventory within five miles of 95 percent of the American population,” (Michael Hart, 2014). This places such physical stores at a major advantage than their online-competitors whom possess their warehouses in remote, state-based distribution centers.
The new trend in same-day delivery has raised an initial skepticism among consumers. The ability to deliver items as cheap as pens or accessories to the customers door within a few hours at a mere price of $5 seems illogical from a business perspective. Considering transportation costs, search costs and transportation costs, there is a clear loss on the side of the company. The raised skepticism is in fact for good reason, yet for a reason highly beneficial for the consumers.
The availability of information strategy is quickly changing consumer behavior and the means in which companies shape their strategy. Nowadays, the cost of communicating with customers is substantially lower due to the increased availability of information. Online search mechanisms have increased product and price informedness and enabled customers to easily switch between competitors. This has increased the need for differentiation and resonance marketing where products and services are delivered in aim of a favorable response from the targeted consumer. Thus E-retailers are swiftly eliminating their rigid schedules, to offer a more adaptive, hyperdifferntiated services that fit the customer’s busy lives better than ever before.
Therefore, tech giants such as Amazon, Google and eBay offer these express delivery services not in aim of making money, but rather as to collect information on its millions of potential consumers. Through collecting information by means of search engines, customer queries and registrations, companies can exploit big data and analytics and can thereafter gain further consumer insights to more accurately predict future trends.
Crook, J. (2014). WunWun Slashes Pricing To Compete With Other On-Demand Delivery Services | TechCrunch. TechCrunch. Retrieved 21 October 2014, from http://techcrunch.com/2014/07/15/wunwun-slashes-pricing-to-compete-with-other-on-demand-delivery-services/?ncid=rss&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+Techcrunch+%28TechCrunch%29
Econsultancy,. (2014). Q&A: Tom Allason on e-commerce delivery startup Shutl. Retrieved 21 October 2014, from https://econsultancy.com/blog/5092-tom-allason-on-e-commerce-delivery-startup-shutl#i.rnotnqrzgfaxx1
The Verge,. (2013). Door-to-door war: how Amazon ignited a boom in same-day delivery services. Retrieved 21 October 2014, from http://www.theverge.com/2013/10/10/4824014/the-dream-of-the-90s-is-alive-in-america-why-on-demand-delivery
Li, T., Kauffman, R.J., van Heck, E., Vervest, P., and Dellaert, B. 2014. Consumer Informedness and Firm Information Strategy. Information Systems Research 25(2) 345-363.
The U.S. Federal Aviation Administration predicts that 7,500 drones will be operating in the U.S. by 2018. But there are a lot of concerns regarding the safety of people and property on the ground. For now, the FAA prohibits the commercial use of drones but they are working on regulation to integrate civil unmanned aircraft systems safe into the national airspace system.
Maybe Airware, a drone start up, can be of great help. Airware’s main business is selling control software and hardware to drone manufacturers and operators. They already have worked together with the FAA to anticipate regulatory needs. Now, they are working with NASA on a project exploring how to manage the swarms of commercial drones expected to start appearing in U.S. skies. This project will take four years and during those years several prototypes of air traffic management systems will be developed.
The first prototype will be an Internet-based system. The company who owns the drone needs to file a flight plan for approval. The system looks up the information about other drones in the area, weather forecasts and obstacles such as big buildings and radio masts, to give the go-ahead.
In later phases of the project, they will build more advanced systems that can actively manage drone traffic by sending out commands to drones in flight. That could mean directing them to spread out when drones from multiple operators are flying in the same area, or land on a safe place when an operator has lost contact with the drone. This commands could vary depending on the situation, for example, in a crowded area, it is not safe to immediately land the drone. For this advanced systems, Airware believes that equipping drones with cellular data connections would be the best option. The cellular infrastructure already exists, which is a plus. But at the same time, cell networks don’t have complete coverage over all the country. This can be a problem for remote areas that are popular for drone photography. Ultimately, NASA wants its system to do things like automatically steer drones out of the way of a crewed helicopter that unexpectedly passes through.
Airware. (2014) Airware Partners with NASA to Develop a UAS Traffic Management System . Available: http://www.airware.com/news. Last accessed 21-10-2014.
Federal Aviation Administration (2014) Press Release – FAA Statement. Available: http://www.faa.gov/news/press_releases/news_story.cfm?newsId=15894. Last accessed 21-10-2014.
McCormick, R. (2014) NASA is building an air traffic control system for drones . Available: http://www.theverge.com/2014/9/1/6095379/nasa-is-building-an-air-traffic-control-system-for-drones. Last accessed 21-10-2014.
Simonite, T. (2014) Air Traffic Control for Drones. Available: http://www.technologyreview.com/news/531811/air-traffic-control-for-drones/. Last accessed 21-10-2014.
If you have turned on your television or if you have read a newspaper in the last few weeks, you probably cannot have missed it: the smartwatch.
Apple, for instance, will launch its smartwatch – the Apple Watch – somewhere in early 2015.
As usual with new “revolutionary” devices, the first models are often still struggling with shortcomings. This is also the case with the smartwatches.
People reviewing the Apple Watch tell us, for example, the screen is too crowded with tiny icons (representing the applications), making it look chaotic and cumbersome to navigate through the menus.
“How do you make a watch bigger without actually making it bigger?” asks Gierad Laput, a PhD student at Carnegie Mellon in the Future Interfaces Group. His answer? Turn your arm into an extension of the watch.
Consequently, Skin Buttons was born!
Skin Buttons, tiny laser projectors integrated into the smartwatch to render icons on the user’s skin, seems an interesting idea!
The projected icons can be made touch sensitive, resulting in an expanded region to interact with, without increasing the physical device.
How does this exactly work?
The four laser diodes integrated in the watch are covered with a static piece of film that projects fixed icons. The watch is able to tell when a user touches an icon, by using infrared proximity sensors. This information is then communicated to the smart watch, which reacts as though you touched the screen directly.
While this expansion of the field of interaction is awesome and can be developed for a lot of practical applications (e.g. people with sight problems: the icons can be made as big as needed), what’s really interesting is when you consider products like Skin Buttons as stepping stones for improving (or replacing) screens.
Allow me to elaborate on that.
Chris Harrison, an assistant professor at Carnegie Mellon and head of the Future Interfaces Group, says: “it’s only a matter of time before components are small enough and cheap enough that we can use LCDs to create dynamic buttons that change form and color”.
Of course, we are still a long way from there. But imagine the possibilities when we don’t need a screen anymore! We can just project our devices on walls, tables et cetera, you name it!
I can’t wait for the snowball effect to take off. In that case, I might have already one application for the technology from one of my favorite movies:
In 2003 the Dutch government announced an Internet identity management platform, which Dutch government agencies can use to verify the identity of Dutch citizens on the Internet. For example, citizens can submit their tax forms electronically through their DigID’s. Since the introduction of this system there have been various complaints of Dutch citizens about the safety of this platform. The government still guarantees the safety of this platform, but exactly how safe is it, and how long will we still use our DigID?
To register for your DigID you just have to visit digid.nl. You can choose your own username and password. Later on you will receive an activation code and here you go, you have your own electronic passport! For most of the features that are offered by Dutch agencies you will only need the username and password to enter. This is called the ‘low safety assurance’. For the features that contain somewhat more privacy information of you, also an activation key is sent to your mobile phone. This is called ‘medium safety assurance’. You would expect there is also ‘high safety assurance’, but this feature has not yet been rolled out, what is somewhat strange. You would expect the highest form of safety when it’s about your personal information?
Problems with DigID
Since the full introduction of DigID in the Netherlands there have been a lot of problems with the platform. In 2013 for example, DigID was the target of hackers who were interested in stealing the personal information of thousands of citizens. 150 citizens even got hacked and an identity fraud was the result. Social benefits of 6 people were booked over to different accounts of frauds.
Future of DigID
In 2013 the minister of the Interior & Kingdom Relations admitted that the DigID was a not safe enough platform to use as a digital passport. The government is at this moment working on a new digital identity, namely eID. This new platform should be launched in 2015. This new platform should be much more safe than DigID. It gets a ‘high safety assurance’ feature, which can better guarantee the safety of your personal information. Also to acquire a login name and password for this platform you need to go to your local town hall. It is also possible that grocery stores use this eID to be sure of your age, and that you can’t buy alcohol under the age of 18. The introduction of this new platform will cost a lot of money, and I am afraid that in a few years hackers will already find a new way to fraud with this system. And how about our privacy? Is it at stake if even the grocery stores can look us up in their system?
Today’s tech giants are in a battle to become the platform of the future.
- Facebook is extending beyond being a social media website by adding features in groups to increase work productivity, exploring virtual reality with their acquisition of Oculus Rift
- Apple introduces Apple Pay and makes a serious move into the payments industry
- Google acquired Waze in 2013.
- Yahoo! acquires basically everything
All of these firms continuously make acquisitions, for different reasons. I’d like to analyze the Waze acquisition by Google with you because it has a perfect fit for the course material of the last week concerning platform envelopment.
Waze is a GPS-based geographical navigation application program for smartphones with GPS support and display screens which provides turn-by-turn information and user-submitted travel times and route details, downloading location-dependent information over the mobile telephone network. It was developed by the Israeli start-up Waze Mobile, which was acquired by Google in 2013. 
What’s Platform Envelopment?
Envelopment can occur when platforms providers who serve separate markets are sharing users and/or components.  These two images from the lecture will clarify envelopment:
Waze offered a similar product to Google Maps, however has successfully differentiated itself from competitors by excelling in user-engagement; user-submitted travel times, map improvements and other datapoints enabled Waze to offer real-time traffic information and rerouting in case of accidents/traffic.
The mechanism of envelopment is bundling:
- Efficiency gains: transaction and production cost savings, improved user experience
- Price discrimination: reduces heterogeneity in consumers ́ aggregate valuations
- Strategic advantages: extend market power into complement market; protect core market by
foreclosing rivals’ access to key complement
When looking at Google and Waze, the acquisition may have one of the four (main)reasons:
- Waze’s user engagement: As mentioned earlier; Waze has a lot of user engagement which Google can use to try and implement this same effect at its own navigation app.
- Keep Waze away from competitors: Some acquisitions are made with more defensive reasoning; by acquiring Waze, Google has kept its technology and employees away from companies such as Facebook and Apple. Apple has been making steps in the navigation market and Facebook might consider following suit.
- Extra features: Next to the user engagement mentioned in point 1, Waze has features that Google Maps currently lacks; report accidents, police presence, speed cameras and blocked roads. Google could use Waze to integrate these features in its own product.
- Use Waze to replace Google maps: This is a strategy that has been used by Microsoft before when it acquired Skype for $8.5 billion in 2011. According to Globes, ”Microsoft, which had a rival product called Messenger closed it not long afterwards and currently offers Skype as its solutions for both Internet conversations and immediate messages.”. Google could replace its current Maps app by Waze in the long-term. This seems tricky since Google Maps is a highly successful product at the moment and changing that for another product makes the relative switching costs for users lower at that point in time; They have to move to the Waze product or can choose a competitor’s product at that moment (they have to change product anyway).
I believe the fact that this keeps Waze’s technology away from competitors is a nice (extra) benefit, but that Google will use this acquisition to heavily improve its own -already successful- navigation app to create the ‘next generation’ application in GPS-based Geographical Navigation. This feeling is also strengthened by the fact that Google has been investing in self-driving cars for a while now; navigation services are extremely interesting to bundle with these self-driving cars and adding real-time information to that could be a big leap in improving the technology of self-driving cars.
Which of the reasons seems most logical to you?
- T.Li Lecture Week 7
Have you already heard of the concept of ‘self-moving cars’? Currently, developers are working to create cars that can drive without being steered. Such a car has diverse benefits. First of all, developers are trying to make it possible that these self-moving cars can communicate with other self-moving cars (Rohmensen, 2014). As a consequence, there will be less traffic jams. The cars can then communicate with each other and make sure that they will not overload the roads. Furthermore, less traffic accidents will occur, because the cars will be able to communicate with each other and tell each other where they are driving (Rohmensen, 2014). The cars will also have a more positive effect on the environment (Rohmensen, 2014).
At the moment, the laws of testing self-moving cars are very strict. Each part of the car has to be tested and the testing process is very long and stiff. However, there might be a change under the horizon. Minister Schultz van Haegen wants the Netherlands to become a leader in the self-moving cars industry. Therefore, she would like to liberalize the law on testing self-moving cars. The parliament has to vote on this non-government bill (http://www.nu.nl/gadgets/3907621/wetsvoorstel-grootschalige-tests-met-zelfrijdende-autos.html, 2014).
Liberalizing the law on testing self-moving cars will lead to the entering of new entrants in the self-moving cars industry. Changing the law will make large-scale testing of self-moving cars possible in the Netherlands. This will transform the self-moving car industry into a newly vulnerable market (Granados et al., 2008). More companies can enter the market due to the changes in the law. Furthermore, large profits are expected due to the expectations that moving-cars will be a very popular phenomenon in six years (Rohmensen, 2014).
Thus, for everyone who would want to enter a newly vulnerable market, await your chance. Entering the market of self-moving cars will be very beneficial once the parliament has liberalized the law on testing self-moving cars!
Granados, N., Kauffman, R.J., and King, B. 2008. How Has Electronic Travel Distribution Been Transformed? A Test of the Theory of Newly-Vulnerable Markets. Journal of Management Information Systems25(2) 73-96.
Rohmensen, G.J. (2014, October). Nederland moet leidend worden bij zelfrijdende auto. Trouw. Retrieved from http://www.trouw.nl/tr/nl/4492/Nederland/article/detail/3772550/2014/10/20/Nederland-moet-leidend-worden-bij-zelfrijdende-auto.dhtml
Do you want to be rich? Start hacking! The market for zero days is booming business. But what exactly is a so-called ‘zero day’? And why is it so dangerous?
It was when I watched the Tegenlicht (NPO) documentary ‘Zero Days: security leaks for sale’, that I first heard of the term. A zero day is an unknown security leak in either software or a website. Hackers are always searching for these kind of leaks. This never-ending search makes all hackers equal. It is the choice they make what to do with this leaks when they find them that separates them.
Hackers that are able to trace and exploit those leaks have a few options. White hat hackers will function as whistleblowers. They let the particular company know that there is a problem with their software or website. This mostly result in a pat on the shoulder and appreciation, but wont make the hacker rich. Black hat hackers on the other hand, sell their exploits to governments or private parties. The amount of money that transacts in this business is astonishing. In 2012 a hacker received $250.000 from the US government for finding a zero day in iOS. What if this hacker sold his exploit to organized crime? It will only be a matter of time before the white hat hackers will no longer resist the gold rush that is taking place. The scary part in this story is the fact that selling zero day exploits is completely legal.
When hackers sell their exploits to enemy governments (or organized crime as stated before), it can lead to a cyber war. This is where the Department of Defense should step in. Yesterday an article came online at news site nu.nl, that stated the ‘hack-back law’ will pass parliament no sooner than next year. This means that the dutch defense force is still not allowed by law to hack enemy states or parties, even when it is necessary. Do you think this will threaten national security?
Although estimates of the film industry can differ significantly among studies, consultancies and research institutions all predict the same: the global market for movies is ever increasing. E.g. Reuters predicts that the market will reach $139 billion in revenue in 2017 with a CAGR of 4.2% over five years (2012-2017) (Reuters, 2012). If movie production companies say piracy is eating from their revenues, where is that growth coming from?
To start with: not from DVDs. A movie is an information good. The upfront cost is very high, up to millions of dollars before even making any revenue. Thereafter, distribution costs are very low. In the case of a DVD that is only a few cents to produce and distribute (Vapiro & Varian, ?). Therefore, DVDs are considered to be very overpriced. As Vapira & Varian (?) recommend: do not be greedy. If the price for an information good is too high, this attracts new entrants. In this case, piracy websites who earn a significant income through online advertising.
Although movies are downloaded millions of times, that does not mean that those movies would have been bought as a DVD if a download was not available, ‘it does seem fair to assume that not every pirated copy of an audiovisual work represents lost revenue to the content producer’ according to Karsten Strauss from Forbes (2013). Also, a download does not mean the producer loses money. The production costs have already been made and there is no additional cost to the producer that it’s distributed online.
A really large part of the growth will come from unlimited online streaming services like Netflix and Hulu. In 2013, revenue totalled $6.6 billion, but it is estimated to grow to $17.4 billion in 2017 according to a study by PWC (Billboard, 2013). The rise of these streaming services recaptures some users that resorted to piracy, as now there is an instant way to watch a movie or show without illegally downloading it.
Actually, as Reuters (2012) puts it, growth comes from new online and mobile business models in general (including unlimited online streaming services). Take pay per view and video on demand that’s now available via consumer’s own TV subscription and online and mobile websites. In 2016, the revenue of those models will surpass the revenue of physical DVDs and Blu-ray discs in the US (Billboard, 2013).
As a last note, piracy can even help the film industry growth. For example, Game of Thrones, the most downloaded TV show in 2012, strives on the ‘cultural buzz’ it creates: more views on TV and streaming services and increases DVD sales (Forbes, 2013).
Forbes, 2013. TV and Film Piracy: Threatening an Industry? [online] Available at:
<http://www.forbes.com/sites/karstenstrauss/2013/03/06/tv-and-film-piracy-threatening-an-industry/ > [Accessed October 20, 2014]
Reuters, 2012. Research and Markets: Global Movie and Entertainment Industry 2012-2017: Trends, Profits and Forecast Analysis Provides an Overview of the Global Movie and Entertainment Industry. [online] Available at: <http://www.reuters.com/article/2012/07/13/idUS161883+13-Jul-2012+BW20120713> [Accessed October 20, 2014]
Billboard, 2013. Study: Global Entertainment Industry Poised to Top $2 Trillion in 2016. [online] Available at: <http://www.billboard.com/biz/articles/news/global/1565728/study-global-entertainment-industry-poised-to-top-2-trillion-in> [Accessed October 20, 2014]
Shapiro, C., & Varian, H. (1999). Information rules. Boston, Mass.: Harvard Business School Press.
In today’s digital world the term ‘wearable’ has a new meaning. Ten years ago, when someone mentioned the word ‘wearable’, the first thing that came into your mind was an image of a t-shirt or a nice dress. Rather, today it brings up images of accessories such as a smart watch or a fitness tracking device. Wearables are used in many areas and not only for fun. They can be used to keep first responders safe and alive by monitoring their physical conditions and their environment. For example, when the wearable detects a dangerous gas, an alert can be issued: the wearable tells the first responder to put on a gas mask. This way of applying wearables could save lives.
Another popular wearable, maybe as lifesaving, is the fitness tracking device. These devices can, among other things, calculate the number of steps you’ve walked, how many calories you’ve burned, how many floors you’ve climbed, and the number of your active minutes. The use of a fitness tracking device can be motivating and can give more insight in people’s behavior during the day. According to a study on wearable technology from the Centre for Creative and Social Technology at Goldsmiths, University of London, 71% of Americans and 63 of Brits said that wearable tech has improved their health and fitness. Another function of many fitness tracking devices is sleep tracking, which will monitor the quality of your night’s rest and wake you up each morning with a vibrating alarm.
These wearables can also provide us a lot of interesting data. For example, On August 24th at 3.20am, an earthquake of magnitude 6.0 struck Northern California. Many people were awakened by this earthquake. Strikingly, it is possible to identify the epicenter by measuring the disrupted sleep suffered by thousands of people in the area who use a sleep-tracking device made by Jawbone. The company spotted trends in how long it took people to return to their slumber, and noted that 45% of people within 15 miles of the epicenter were unable to go back to sleep at all.
The Economist (2014) Shaking up the wearables. Available: http://www.economist.com/news/business-and-finance/21613925-potential-market-personal-fitness-tracking-devices-over-hyped-shedding-wearables. Last accessed 20-10-2014.
Nusca, A. (2013) 13 eye-opening figures about wearable tech. Available: http://www.zdnet.com/13-eye-opening-figures-about-wearable-tech-7000016421/. Last accessed 20-10-2014.
Sazonov, E. & Neuman, N. R (2014) Wearable Sensors: fundamentals, implementation and applications . Oxford: Elsevier Inc.