Technology has always been an important part of festivals. How else are thousands of visitors able to hear the music that a band is playing on a big stage? Last years, however, some major innovations have taken place in the music festival industry, and these innovations are mainly focused on improving the visitors’ experience of the festival.
Nowadays, every music festival has its own app. These apps, consisting of information about performing artists and a map to indicate where all the stages are, seem to replace the traditional small booklet distributed at the entrance. Furthermore, the number of other apps that are concerned with the visitors of music festivals is rising. Visitors can use apps like ‘Tent Finder’ to find their tents in the middle of the night, or apps like ‘Festvl’ to create your own line-up of the acts you’re dying to see.
Another innovation is the digital festival wristbands. With the help of NFC (Near Field Communication) technology, we can pay with our smartphones or wristbands. More and more festivals are integrating a payment chip in their wristbands in order to increase the efficiency of buying food or drinks at a food truck at their festival. Another advantage of this innovation is that it increases the safety at festivals, since no cash is going over the counter.
There are also some trends that show the fear for technological innovations. One of them is the fact that people like to use a selfie stick to take a selfie with their friends at a concert of their favourite bands. This innovation, however, can lead to irritations to other visitors of the festival. This is exactly why festivals like Coachella, Lollapalooza, Pinkpop and Lowlands don’t permit these selfie sticks. Another innovation that can have some negative effects is the use of apps like ‘Periscope’ or ‘Meerkat’. Whit these apps, visitors can stream live video of the concerts they visit to share it with their friends. This can lead to serious copyright issues.
Concluding, most technological innovations improve visitors’ experiences of the music festival, and we have to continue to try to improve this even more. But we must be careful that these innovations don’t lead to new issues or problems.
de Hooge, M. (2015) “Technologie tijdens festivals” [online] Available at: http://iq.intel.nl/technologie-tijdens-festivals/ [Accessed at: 18-10-2015]
van Iersel, F. (2015) “Festivals verbieden selfie sticks” [online] Available at: http://leijp.nl/festivals-verbieden-selfie-sticks/ [Accessed at: 18-10-2015]
Williams, R. (2015) “The 10 best festival apps” [online] Available at: http://www.telegraph.co.uk/technology/news/11680861/The-10-best-festival-apps.html [Accessed at: 18-10-2015]
Matthew van Cooten – 359947
Looking at supermarkets nowadays, we see many new developments when it comes to doing grocery shopping. Doing your groceries just isn’t the same as it used to be anymore. New innovations (made possible by new technology), enable us as consumers to experience grocery shopping in a whole new way, all of it to make grocery shopping easier, more efficient and more convenient.
Albert Heijn, for example, provides customers with the option of self-scanning (with a hand scanner or mobile phone app) and self-check outs. In the AH To Go’s the self-checkout service is already offered, as well as in other AH supermarkets.
Recently, however, AH decided to take the self-scanning concept to a major store and has opened its first fully self-scan (and pin) supermarket in Amsterdam. Customer can choose out of three options: self-scanning using the hand scanner, using the Appie app on one’s smartphone or the self-scan checkouts. Customers pay the bill without the intervention of the cashiers anymore. Scrapping the old-fashioned checkouts also means an increase in amount of space availability for products (DutchNews, 2015).
Ahold says the self-scan supermarket is not intended to cut cost and the self-scan supermarket has just the same amount of staff as like the similar supermarkets with old-fashioned cash registers. Staff, like cashiers, are getting a different role and are on hand to answer questions from customers, and to help customers with self-scanning. Another feature of this supermarket is that customers cannot pay by cash anymore, but can only pin.
First of all, I think this is a very interesting concept, especially an interesting approach AH has taken to open a fully self-scan supermarket. Nevertheless, there are a few things I am wondering about. They say the number of staff has not reduced, although, will this still be the case in the future? Cashiers perform a whole different kind of job now, walking through the store, helping customers with questions about self-scanning… how will this kind of job end up like based on the long-run? After a while, customers are probably going to need less help with self-scanning and the need for (the same amount of) employees is most likely going to drop in the future. So what kind of effect does this change have on the job market according to you?
Second of all, there is no option to pay with cash, which I find a bit inconvenient as well. I assume most people pay by debit card anyway nowadays, but there should still be the option to pay with cash, for example for small groceries. The fact that AH only provides payment by debit card (pin) is most likely going to help them with marketing and/or data collection as well. They are able to track consumer behavior even more now by only providing aforementioned payment option.
Third, the idea of a fully automated kind of supermarket just makes me feel like there’s definitely going to be less customer interaction. Technological advances drive us even further away from actual human interaction. So what is the future going to be like for these kinds of supermarkets?
AH is very curious as to how customers will react, and so am I. I wonder if this really is the future for supermarkets. I doubt it, but I would love to hear some of your thought about this recent development!
Linda Tram – 355313
DutchNews, (2015), “Albert Heijn opens supermarket with self-scan check-outs only”, DutchNews.nl, accessed at: http://www.dutchnews.nl/news/archives/2015/10/albert-heijn-opens-supermarket-with-self-scan-check-outs-only/
Emerce, (2015), “Albert Heijn opent volledige zelfscan supermarkt”, Emerce.nl, accessed at: http://www.emerce.nl/nieuws/albert-heijn-opent-volledige-zelfscan-supermarkt
Two masked man break open a window and pursue to climb inside. Before they can set their feet inside the house a bright light blinds them and they hear the words being yelled ‘Freeze!’. A police offer prevents a burglary before the man can even enter the house. The scenario may suggest a coincidence of the officer being in the right place at the right time, in reality they were guided by a software program that predicted the crime.
Although predictions shouldn’t be taken as an absolute reality, the hypermodern technique to predict the time and location of future crimes using sophisticated computer models and algorithms is becoming a more widespread police system. The goal is to transform policing from a reactive process to a proactive process. An important side note is to view the technique as complementary to police knowledge, experience and judgment of possible relevant information (Greengard, 2012).
Key is to use a Data Warehouse encompassing data of criminal activities and linking relevant data to it (Willems and Doeleman, 2014) Although it is essential to keep the model simple, otherwise the model might wind up saying nothing definitive, over time other variables could be added in the model, such as epidemiology data, climate and weather, economic factors and even spatial geography and census data (Greengard 2012). To find additional patterns that the human eye would fail to see, data mining is being used. Crime will always have a significant stochastic or random component, however the non-random component that crime has is being exploited (Greengard, 2012).
For example the Amsterdam Police has implemented the system Criminal Anticipation System (CAS). High-impact crimes (burglary, robbery) are predicted by creating heat maps with territories that span 125 meter by 125 meter. Using only the top 3% of territories high risks are given warmer colors than lower probabilities with colder colors. On the basis of this information resources are deployed to timeframes and areas that seem to matter. 40% of all burglaries and 60% of all robberies are predicted by using only 3% of the territories in Amsterdam (Willems and Doeleman, 2014).
The opportunities of the system are obvious, however a possible threat to the system is criminals may anticipate on predictions and alter their behavior. A drop of criminal activity in one hot territory may be only temporal as in this cat-and-mouse game criminals will look for new spots to base their criminal intentions. Privacy issues are also a problem that may concern the system. Following individuals could touch upon privacy issues (Greengard, 2012). Furthermore these techniques may be used to justify greater data collection and more surveillance. Finally a future in which civilians are being corrected by the state before they do something suspicious is not one we root for (Reve, 2015).
Van het Reve, J. ‘De toekomstpolitie’, De volkskrant, 26-9-2015.
Greengard, S. ‘Policing the future’, Communications of the ACM, Vol. 55, no 3, march 2012.
Willems, D., Doeleman, R. ‘Predictive Policing-Wens of Werkelijkheid?’ Het tijdschrift voor de politie, jg 76, no 4, 5, 2014.
Online grocery shopping has changed the way many people do their groceries in the Netherlands. Instead of spending time in the supermarket one simply places the order online and the groceries are delivered after 24 hours right in the kitchen. Online shopping usually appeals to customers doing large orders for the family for the whole week. Despite the appeal of shopping in this way, it doesn’t cater the need of all customers, like business people or students, needing some groceries for the evening. 24 Hours delivery time will be too long if you need something the same evening, delivery costs are relatively high if you order just a few products and you still have to remember and take your time to place an order. These customers are tired after working or studying the whole day and they don’t want to do the groceries anymore.
In our transformation project we therefore proposed a new business model for the largest supermarket chain in the Netherlands, Albert Heijn, to target this group of customers. In our plan the supermarket is brought to them in virtual form to the places where the a lot of time is usually wasted, waiting for public transit at the station (Samsung, 2014). These virtual stores will be formed by posters that look similar to the shelves of a real supermarket. The products will be placed side by side on these virtual shelves and will have a price label underneath them. Customers can ‘grab’ a product from the shelf by scanning the QR code next to the price label with their smartphone. The product will then be placed in a virtual basket. When finished, the customer can checkout the products and pay them using the phone. The virtual stores functions as a reminder to do the grocery shopping and let people quickly grab the products they need while waiting. The orders can then either be picked up at a local supermarket or at special pickup lockers at the same or other station on their way home. The local supermarket can even deliver the order at home within three hours.
This business model is fundamentally different from the current online business model. The current business model uses a small number of regional distribution centers to service an area, where the new business model will leverage the existing network of over 900 local supermarkets to offer this group of customers faster delivery and more pickup options. Using modern technology it combines traditional grocery shopping with modern online grocery shopping.
This model will also create extra visibility for the Albert Heijn brand at high traffic locations and will confirm Albert Heijn’s reputation as an innovative company. It can also create new revenue streams by allowing producers to have their product more prominently presented at the virtual stores.
J.H. Aben – 171724JA
L. Keijzer – 355076LK
K.B.T. Tram – 355313KT
C.K. Nguyen – 361546CN
Samsung (2014), Saai woon-werkverkeer kost Nederlander gemiddeld een week per jaar.
In February 2014, WhatsApp was sold to Facebook for an unbelievable figure – 19 billion dollars. Within the next few weeks, it was all over everybody’s blogs, Facebook statuses, lunch conversations, and even kids in school were talking about it. People could not understand that a company whose only product is a messaging app could be worth that much money.
WhatsApp is not the only messenger out there. Snapchat, Facebook Messenger, LINE, WeChat, and many others are also stakeholders in the industry. They proved to be a cheap alternative to operator-based text messaging via SMS, and they provide many more features that SMS doesn’t have. According to statistics, in August 2015, WhatsApp has an active user number of 800 million, Facebook messenger has 700 million, and WeChat has 600 million. If we just do a simple math and not include all added features that each messenger provides, all chat messengers have a combined valuation of over 200 billion dollars. That’s half of Google or 4 times more than Yahoo!.
Interestingly on the contrary side, all these messaging apps struggled to figure out their revenue model. Evan Spiegel, the co-founder of Snapchat, acknowledged in an interview the extreme difficulty of making a feasible one. Many internet companies are backed by ads revenue. Google, for example, revealed in their multiple annual reports that more than 90% of their revenue comes from ads. One of their many services, Google Adsense, analyzes a web page and provides advertisements that best fit the content of that page. However, most people on messengers send private messages to their friends, and it is impossible to insert any ad into the conversation. Out of privacy concerns, it is also unlikely to run algorithms on user’s messages to provide personalized recommendations.
Realizing this limitation, apps began to expand their service into other communication areas, such as emojis, playing games with friends, sending money, interesting new content, etc. This is a very successful first step. In 2013, LINE reported in their Q2 quarter report, that out of their $100 million quarterly revenue, game purchase and in-game purchase accounted for 53%, and emojis accounted for 27%. Snapchat is piloting the new discovery feature that pushes sponsored content to the user. With the existing ads before playing video revenue model, the company stated that their revenue is estimated at $50 million dollars this year.
In addition to these efforts, LINE and WeChat also aim to build up their own ecosystems. WeChat launched a feature to send money to multiple friends in January 2014. It targets the Chinese tradition of giving monetary gifts to friends and family for auspicious blessings on special occasions. On 2015 Chinese New Year’s Eve, more than 1.5 billion “red envelopes” were sent on a single day. WeChat also keeps a semi-bank account for a user. Besides sending money to friends from the account, the money could also be used to make purchase, refill phone cards, call a taxi, pay utility bills and many more. WeChat has built a successful image within China and it has penetrated into many aspects of people’s life.
In conclusion, the entire messenger ecosystem is very enormous. The user-to-user communication nature allowed exponential growth in the user base. With the vastly and constantly growing user base, companies are able to reach billion dollars valuation within a very short amount of time. The next step, to achieve their billion dollars revenue, companies are experimenting to expand their services into our daily life. LINE and WhatsApp have built up their ecosystem that allows users to call taxis, stream music, order foods, and we can predict soon other companies will have similar strategies to expand their verticals.
PLUS Retail is a Dutch supermarket chain with 255 stores across the Netherlands. The co-operative is run by over 200 independent entrepreneurs and reported approximately €2.1 billion net sales in 2014 (PLUS.nl, 2015). PLUS seeks to align its operations with four strategic pillars it has identified, namely: Attention, Quality, Local and Responsibility. These pillars are reflected both in the types of products and services PLUS chooses to offer, as well as the environmental initiatives it takes.
Currently, the Dutch supermarket industry is growing, especially with regards to the online segment, which grew by 55% in 2014. Despite the industry growth, PLUS has been losing market share, and so is required to implement new strategies to combat this. As the market is shifting away from only traditional retail stores, and towards a multichannel industry, PLUS needs to align its current IT strategy with the main market trends and consumer preferences.
In recent years, PLUS has realized the potential of optimizing its value chain through the use of information and communications technology (ICT). In 2013, it launched the “IT Excellence” program, with the goal of improving the IT infrastructure and optimizing processes. However, as changes are only being implemented now, it can be stated that PLUS is lagging behind with regards to its competition.
We believe that PLUS should develop a sophisticated mobile application, which will include a store locator, a product finder and an order management system. It will also enable PLUS to offer tailored promotions to its customers, based on their purchasing habits. There are many advantages expected from the implementation of this solution and the supermarket chain cannot afford to miss out on this opportunity and needs to be innovative in its digital strategy. The app will not cannibalize the offline communication but improve processes and make them more efficient. There will be a high impact on the core organization but rather a low impact on the core strategy.
There are numerous benefits to using this solution. As the online grocery market is expected to double in size over the next 2 years, totaling €1 billion by the end of 2016 (Syndy, 2015), PLUS is expected to greatly profit from this growth with the implementation of this solution. This is mainly due to a higher service level provided and a larger customer base reached via the app. In addition, online customers tend to spend an average of 20% more than offline customers (Ahold, 2014). All these factors would result in a 52.5% increase in online sales and 35% growth in online market share, in the first year after implementation. The second year could result in an even greater increase, with 85.3% sales boost and 48% market growth, resulting in an additional €15 and €30 million in revenues, respectively.
Through the application, PLUS would be able to leverage its current status of being a competitive supermarket in the Netherlands in terms of its customer service while reinforcing its four pillars of ‘attention’, ‘responsibility’, ‘quality’ and ‘local’. The risks association with its development and implementation such as the ambiguity of the accompanying costs can be mitigated through thorough planning and proper staff training, which is undoubtedly within the skill set of PLUS’ experienced management board. Should the proposed digital transformation be a successful one, PLUS will be on its way to becoming a strong adversary in the online grocery retail space.
Syndy, (2015). The State of Online Grocery Retail in Europe. [online] Amstelveen: Syndy. Available at:
http://www.syndy.com/report-the-state-of-online-grocery-retail-2015/ [Accessed 15 Sep. 2015].
PLUS.nl, (2015). PLUS retail – PLUS als organisatie | PLUS . [online] Available at:
https://www.PLUS.nl/info-over-PLUS/organisatie/PLUS-retail [Accessed 18 Sep. 2015].
Ahold, (2014). Ahold Annual Report 2014. [online] Available at: https://www.ahold.com/Financialinformation/
Annual-reports/Annual-Report-2014.htm [Accessed 17 Sep. 2015].
Martin Kayser 353884mk
Benedikt Kolbert 353958bk
Kiki Huang 354902kh
Michal Floss 356166mf
Thomas Gratzmuller 357457tg
PostNL is the largest and best-known post and parcel distributor in the Netherlands. For a long time, PostNL was able to operate in a relative “safe” environment, as it had the privilege of being the sole organization that was allowed to distribute post in the Netherlands (originally, PostNL was state-owned). However, in the current environment PostNL is facing certain challenges which forces the organization to adapt. More specifically, the current market is digitising, e-commerce is growing, competition is getting fiercer, and the regulatory landscape is shifting. PostNL aims to differentiate itself by being customer focused, rethinking services and solutions, and by focusing on trusted delivery. These value-drivers are based on three pillars, being people, IT infrastructure, and a strong network. The workforce of PostNL is perceived to be their most important assets, as in the end, it is them who are creating value to the customer, and thus making revenue.
HR is the primary department that is focusing on managing the workforce. Within HR, a cloud-based solution, SuccessFactors, is introduced to streamline certain HR practices, including performance management and PostNL academy (training module). For the project at hand, we focused on the performance management process.
In order to improve the existing process, we recommended PostNL to introduce a digital portfolio, connected to the existing information technology. By doing so, the performance appraisal cycle will become become bottom-up, data driven, continuous, and interactive, instead of the current top-down, slow, and not-data driven manner. Employees will be asked regularly to give feedback to the peers they have met within the organisation. Thereby, data can be tracked continuously and from a wide variety of angles. This data can be used to facilitate the performance appraisal conversations with the given employees.
However, there are certain risks involved, when choosing to implement such a system. For example, the employees within the organisation may be reluctant to download an application that would facilitate the feedback-option. The adoptation rate is highly essential, as objective feedback requires much imput, instead of just a few ratings. Furthermore, by asking peers to give feedback to peers, there is a social desirability bias involved. individuals may either give overly positive feedback to peers they do like, or overly negative feedback to peers they do not like, or to those they have had an affective conflict with recently. In order to overcome such challenges, PostNL should clearly communicate what the exact value of the novel system is, and emphasize that in the end, the employees will benefit as it is their development that is at stake. Furthermore, it could provide trainings to show how the novel feedback system works, so that the individual employees may better see the value. Consequently, they will more likely to adopt the new way of performance management, and might be using it more objectively.
Eventually, the development of employees will enable PostNL to execute their strategy in a more effective manner; such a change in HR will enable the organisation as a whole to better reach their strategic goals.
On Tuesday 13 October Etihad signed a deal with IBM for services that include security and infrastructure. The agreement is signed for 10 years. IBM will deliver these services to enable Etihad Airways to transform the IT infrastructure to have a better service level for customers and employees. One of the most important plan in this agreement is the usage of cloud-based platforms.
This is a good example of Porters view on IT: “Companies should not have internet as a strategy, but integrate it into their strategy.” The core value activities should not be affected by IT. This is the case at Etihad as their strategy is based on giving quality to customers. There is an alignment between Information Strategy and Business Strategy.
Why is Etihad so successful?
There are a few reasons that Etihad is successful. The most important reason is the partnerships they have made. Where there is usually an alliance (there are three major alliances: SkyTeam, Oneworld and Star Alliance), Etihad codeshares(same flight with different flightnumbers) with any airline that makes financial sense. As Etihad is not involved in an alliance, it is free to do this with any airline it wants. Etihad codeshares with AirBerlin (Oneworld) and Air France/KLM(SkyTeam) which are in the same region.
This is not the only thing Etihad does so well, they unique strategy they have is taking financial stakes in close partners. For example: Jet Airways, Aer Lingus, Air Seychelles, AirBerlin. According to Hogan (CEO Etihad) these equity investments allow partners to achieve a scale that has cost benefits, not just revenue benefits which are not found in codesharing partnerships or alliances.
Back to the deal, there are a lot of things that are being covered. For example the airline’s infrastructure will go to the cloud with a data centre in Abu Dhabi. Another part of the deal is a joint technology and innovation council which will take care of development of more personalized travel solutions.
Have you ever felt sick and googled your symptoms? You probably found that you were having a n incurable decease and would die within a short period of time. Soon this problem might be over. Thanks to the use of social media healthcare professionals and patients can be connected. Social media can be used for several goals. It can improve or enhance professional networking and education, organizational promotion but for (potential) patients it can improve care and education.
The use of the term social media refers to ‘Internet-based tools that allow individuals and communities to gather and communicate; to share information, ideas, personal messages, images and other content; and, in some cases, to collaborate with other users in real time.
For online interaction with patients is a growing interest. Some physiciants try to enhance the communication with patients by the use of social media. Twitter and Facebook are the main channels. A study found that approximately 60% of physicians were in favor of interacting with patients through social media fort the purpose of providing patient education, health monitoring, for encouraging behavioral changes and drug adherence. They hope that these efforts will result in ‘better education, increased compliance and better outcomes.’
If patients have contact with their physicians via social media this can result in a better awareness of the advice. It can increase the time spent communicating with patients and therefore answering more questions, improving patient satisfaction. In addition, social media can be used for reminders, scheduling appointments, diagnostic test results, prescription notifications and answering general questions.
Messaging can be used to improve doctor patient contact particularly focus on patients with chronic, rare or fatal diseases. It would also be beneficial for questions about maternal or infant care.
Next to patient care and communications, patient education can also be increased by the use of social media. The distribution of credible information has been proved to motivate observable behavioral changes within social networks. Patients could access these platforms for health care information and other educational resources. Via social media patients can join virtual communities, participate in research, receive financial or moral support, set goals and track personal progress.
Physicians can tweet, make blog posts, record videos and participate in discussion forums. All these channels provide opportunities to distribute evidence-based information to counter inaccurate material on the Internet. This will make sure we don’t find at every symptom we Google we might die.
Observational learning by social media can be used for health care purposes. Showing on Facebook profiles if someone is an organ-donor can stimulate other to do so as well. Donate Life America experienced a 23-fold surge in donor pledges the week after Facebook allowed users to post their organ-donor status in their profile.
Social media offers the potential to improve healthcare, especially patient care. Having more possibilities to ask questions and find researched-based information will result in a better understanding of the patient’s own disease and this without having to leave the house. But would you like to hear via Facebook whether or not you’re having a fatal disease?
Ventola, C.L., (2014) ‘Social media and health care professionals: Benefits, risks and best practices’ Pharmacy and Therapeutics, 39(7), pp. 491-499
The Nederlandse Energie Maatschappij (NLE) is a Dutch energy supplier located in Rotterdam. It was founded in 2005 following the opening of the Dutch energy supply market in July 2004. It has since established itself as one of the main competitors of the more traditional companies such as Eneco and Essent. NLE tries to distinguish itself from its competitors by offering purely ‘green’ energy, as well as offering energy at a lower price than its competitors.
The main issue for the Nederlandse Energie Maatschappij is the slow exchange of information between the company and its customers. In the current situation the company asks its customers to send their energy levels once a year, from which they calculate the customer’s energy consumption. However to prevent customers from having to pay a large amount of money at once, NLE charges customers a monthly fee based on the customer’s energy consumption from the previous 3 years. The drawback of this method is that at the end of the year the amount the customers have paid, and the amount of energy they have consumed hardly ever lines up. This results in either customers having to pay extra, or NLE having to transfer money back towards its customers. This leads to unnecessary transaction costs which conflict with NLE’s low cost strategy.
We propose for NLE to embed a technology called Crownstone into their business model. Crownstone is a device which customers can install in their homes, which essentially transfers their houses into ‘smart homes’. What this means is that NLE can access real-time information about their customer’s energy usage, and thus bill them accordingly. By implementing this technology we predict that NLE’s transaction costs will decline, therefore allowing them to further lower their prices, and thus increasing value for their customers.
A video introducing the Crownstone Technology
Babet van der Giesen 363995 B.G.
Yorick van de Riet 357297 Y.R.
Maikel Ooms 341182 M.O.
Mathijs Daalderop 360013 M.D.
Sjoerd Poppelaars 361339 S.P.
“I am here to announce that we are building Iron Man.” This is what President Obama told the media at an innovation summit last year. “This has been a secret project we have been working on for a long time. Not really. Maybe. It’s classified.”
The US military is closer than ever to putting Iron Man on the front lines of the US army. Or at least, something that closely mirrors the superhero’s suit of armor. It is developing an advanced military suit: TALOS, or Tactical Assault Light Operator Suit. It is designed to protect the lives of soldiers on the fron lines, especially those who lead the army in a mission.
The idea came from Adm. Bill McRaven, when a US soldier under his command died during a raid in Afghanistan, after the soldier kicked in a door. The top commander vowed to prevent similar tragedies in the future. Gen. Joseph Votel, head of the US Special Operations took over the TALOS program that was launched by Adm. McRaven. The goal: “To give that operator the advantage when he is most vulnerable” (Votel).
Compared to Tony Stark’s suit, TALOS is a liquid armor that can soldify when it is hit by a bullet. However, it will not be able to fly or be guided by JARVIS, although the in-helmet technologies improve visibility and provide better communication with the troop. Nanotechnology was applied to produce this adaptive liquid material. The suit also monitors the wearer’s health, such as heart rate and body temperature.
The TALOS program has churned out several prototypes, it is aiming to deliver a first-generation suit by August, 2018.
How much will this cool tech eventually cost? A 2014 article by Defense Tech reports a budget of $80 million into R&D of TALOS, but it may cost even hundreds of millions more dollars to perfect the technology before it is used on the battlefield.
One of the most important deals in the tech business this year is that Dell is purchasing the cloud- and data storage company EMC for about 67 billion dollars, which is around 24 dollars per share for the EMC shareholders. The merger of the two companies will allow Michael Dell to remain CEO and more importantly will allow for the diversification of Dell, which is essential for the company’s long term strategy, because the PC market is not as strong as it used to be, to put it mildly.
According to Business Insider the same merger could have happened in 2002, but Michael Dell personally stopped the acquisition talks; he was afraid of an acquisition so large right after the burst of the internet bubble, despite EMC being valued at around 16 billion dollars back then. However, at the time Dell’s strategy was focused on manufacturing as many PCs as possible at an extremely high profit margin, utilizing its economies of scale that was practically unmatchable at the time.
EMC may not be as widely known as Dell, but it is actually a very large company with more 70 thousand employees worldwide, providing very popular cloud- and data storage services. The company also owns the RSA digital security software analysis company and the major part of Vmware, which is a software virtualization company. According to leaked information about the details of the merger, Dell has agreed to keep Vmware as an independently operating company.
According to Daniel Ives, who is the Managing Director in the technology, media and telecom research group of the enterprise software company FBR Capital Markets & Co., FBRC, this is just the tip of the iceberg and many acquisitions will follow from large, traditional tech companies. He also mentions some actual examples that could potentially happen in the foreseeable future: 1. Cisco and NetApp, 2. Cisco and FireEye, 3. IBM and Splunk, 4. IBM and Tableau, 5. HP and Fortinet, 6. Microsoft and Salesforce, 7.Oracle and Netsuite.
Do you think that the Dell-EMC deal will have a long lasting effect on the tech industry? Will it motivate other large, traditional tech companies to engage in large scale M&A deals that will significantly change the tech landscape? And more importantly, is it beneficial for the tech industry? What is your opinion on the matter?
A deeper look into Khan Academy
Multiple blog posts have addresses subjects like MOOC’s (massive online open courses), the need for learning programming and so on. I wanted to delve deeper into Khan Academy. Khan Academy is a free online place where everyone can learn. How is it different from MOOC’s? Well, Khan Academy does not offer courses; it merely provides the opportunity to learn from a wide range of subjects. You cannot earn an official certificate or degree from Khan Academy. However, Khan Academy is free and open for everyone. Any day and any time people can make use of the content on Khan academy. There is also an unofficial application so you can learn while being offline.
Background; Salman Khan founded Khan Academy in 2006. Khan Academy is a free online educational website. Khan Academy covers all sorts of subjects through Youtube videos and hands on practice. There are over 100,000 interactive exercises. The level of the subjects ranges from kindergarten to university. Over 32 million people have joined Khan Academy already. Since a few years Khan Academy encourages users by making use of gamification. Users can earn badges by completing exercises, watching instruction videos and so on. Some badges are easy to earn while others require a lot of work. The end goal is to earn all ‘mastery’ badges, which mean you completed (master) all parts of a subject.
Khan Academy is free and relies on donations to cover costs they make. However, they also need the crowd to improve their content. Users are encouraged to discuss the subjects, and when mistakes are spotted Khan Academy will fix their videos and other content. Khan Academy also makes use of the crowd for worth-of-mouth to advertise the experiences of users and to get new people to join.
In short the benefits of Khan Academy are:
- Khan Academy is completely free
- You can use it any time any day
- They cover subjects in: Math, Science, Economics & Finance, Arts & Humanities, Computing, Test Prep
- Provide help with College admissions and talks & interviews
- It is a helpful tool for coaches
- They are partners with institutions such as museums, MIT and NASA
- You can earn badges
Have you joined the community of Khan Academy yet? If not, why? And if yes, what do you like most about Khan Academy? What is your favorite subject?
Recent hype about DRM
Recently, in Brussels an unusual committee session was held. JPEG committee discussed, whether DRM (Digital Rights Management) protection should be added to digital images. In case of the DRM approval (luckily, this proposal was refused), it may happen that you won’t be longer able to set your favorite album cover picture as a wallpaper, because it may be DRM protected.
It reminds the situation with the banknotes. If you try to scan euros or dollars, the software of your scanner will recognize that it is a banknote and refuse to scan it <LINK>. Imagine what will be the consequences once DRM-protected pictures become widespread.
Defective by design
The dissatisfaction with DRM can be traced back even 10 years ago. For example, Free Software Foundation, NGO supporting the spur of free software, organized an initiative against DRM called “Defective by design” in 2006. The name of the initiative reflected the view at DRM.
Why do they think that DRM is so inefficient? The most common arguments are:
- What is the sense of punishing those who has already bought content? As only legal content can be DRM protected, this way the companies impose restrictions on those who really bought it.
- DRM locks in users on a particular platform. You may for example no longer be copy your e-book on your new device, if the previous device brand doesn’t match that of new.
- Locking in of users on one platform causes monopolization. Once switch costs from on platform to another got so high, you will no longer be able to negotiate price to the extent you could. It is applicable both for users and independent publishers.
- DRM software may cause lags. DRM-protected software works smoothly in most use cases, however, when you try to do something unusual as text-to-speech, the system will freeze.
Is DRM good for companies?
Tom Refenes, Super Meat Boy developer, claims that DRM causes more harm on a firm profitability than piracy does. He states that in the current market conditions there is no way to fight piracy. It simply exists and you cannot do anything with it.
Let’s take an example. You bought “Fifty shades of gray” for Amazon Kindle and it happened to be DRM-enabled. Let us assume, you Kindle broke, but you still have your old Pocketbook e-reader. You try to copy it over there and read, but you cannot. DRM-protection of Amazon allows you to read only on the devices operated by the major operation systems, which is not the case of Pocketbook.
I have to underline, you are the one who legally bought the content. Will you be stressed in this situation? Will you buy DRM-protected content again, when you can download almost any book in few clicks for free illegally?
Therefore, companies risk to lose their sales from those customers who willingly paid in the past.
Bearing in mind, that piracy is really hard to beat today and DRM adds additional pressure on the users who are already paying decreasing their willingness to pay, it is rather evil than good.
Founded by 4 ex-Makerbot employees, Voodoo Manufacturing is a Brooklyn based 3D printing shop which offers people and businesses the opportunity to print their design cheaply and quickly, ranging from small to large batches (Biggs, 2015).
With its offering, Voodoo Manufacturing positions itself to become an outsourcing marketplace for small and medium sized businesses. With the potential to accommodate for large batches up to 10000 units, Voodoo aims at building a service which would be available to companies whose operations would not legitimize the contracting of large scale commercial printingservices (Zaleski, 2015).
The differentiating factor for Voodoo as opposed to other 3D printing services stems from the company’s use of a substantial amount (127) of desktop printers. Albeit the fact that some consider these unreliable, CEO Max Friefeld claims that at “1/10 if the cost of traditional printers, [the company] can grow [its] factory effortlessly to meet additional demand”, entailing speed and scale of operations. Essentially making the factory into a printer farm, the machines are all operated through a single proprietary software, which is at the core of the company (Grunewald, 2015).
On the Voodoo Manufacturing web interface, customers are encouraged to drag and drop 3D files in order to receive an instant quote for their products. Furthermore, orders for prototypes and small batches benefit from priority printing and are consistently shipped the next day, giving the company a speed of execution on small orders, which is matched by few if any (Zaleski, 2015).
With its ambition to become an outsourcing partner for end parts, Voodoo also offers production via API. This entails that partners could integrate Voodoo into their “application or service and automatically route orders to be manufactured, packaged, and shipped” (Voodoo Manufacturing, 2015).
As concluding remarks, it is interesting to recognize that this new model of 3D printing services could lead to operational advantages and enhancements for SMEs. With the developments to 3D printing services and possibilities, one can speculate about how entire supply chains could be redesigned towards one single supplier manufacturing most of the end parts required for businesses. On the other hand, it is questionable whether the model of Voodoo Manufacturing with small desktop 3D printer farms is truly scalable.
What do you believe is 3D printing’s impact going to be on traditional business processes?
Biggs, J. (2015). Voodoo Manufacturing Taps The Power Of 3D Printing To Make Things On Demand. [online] TechCrunch. Available at: http://techcrunch.com/2015/10/06/voodoo-manufacturing-taps-the-power-of-3d-printing-to-make-things-on-demand/ [Accessed 18 Oct. 2015].
Grunewald, S. (2015). Former MakerBot Team Launches Voodoo Manufacturing 3D Printing Service Bureau. [online] 3DPrint.com. Available at: http://3dprint.com/99194/voodoo-3d-printing-bureau/ [Accessed 18 Oct. 2015].
Voodoo Manufacturing, (2015). Voodoo Manufacturing: Fast, Affordable, Scalable 3D Printing. [online] Available at: https://www.voodoomfg.com/ [Accessed 18 Oct. 2015].
Zaleski, A. (2015). This MakerBot spin-off just launched a commercial 3D-printing service. [online] Fortune. Available at: http://fortune.com/2015/10/14/voodoo-manufacturing-commercial-3d-printing-service/ [Accessed 18 Oct. 2015].
Ralph Lauren recently launched their new sportswear collection, and it is not the pretty style that made me write a blog post about it. Their new collection can best be described as smart workout wear. The collection integrates IT wearables into their clothing. The smart workout wear could well become the newest trend in the sports industry. The clothes can keep track of many body functions like heart rate or calories burned. The Ralph Lauren PoloTech™ shirt for example works with an IPhone and monitors your heart rate, stress level, and balance. The IPhone app not only monitors these functions, but also includes adaptive workout sessions. Other companies which offer these smart workout clothes include Athos or OMsignal, which also offer an app on which you can track your progress in real time.
These workout clothes are handy for people who need to keep track of their performance, like professional athletes. But I think the market is especially attractive for amateur athletes. Professionals might not mind the looks of their wearables and aim more for quality, since it is necessary for them to always improve their performances. However regular customers might enjoy the wearables even more, because they can now keep track of their performances and look stylish in the gym. Especially with brands like Ralph Lauren adopting the trend, that will not only aim for quality wearables, but also for good looks.
There can however also be some concerns that stem from this technology. The accuracy of these wearables might not always be correct, and any medical conclusions can probably not be taken from the data. Furthermore there might be some privacy concerns, for example when the apps which communicate with these clothes would be hacked and all that the app has kept track of can be seen.
Wishbone is a new app that allows you to poll your friends, which in turn helps them to make decisions. It works by first downloading the app from the app store, either Apple & Google Play. Once registered, you can take two pictures, which you upload to the Wishbone network. The network can then vote on the two choices. As a result, you can see which picture has received better feedback, which should help you to make a decision (Wishbone, 2015; Kosoff, 2015).
However, this is not the only thing the app offers. Wishbone also offers the possibility to vote on “hot or not” topics, such as humor, fashion, celebrities, sports, music, etc. In order to keep its users active, the app provides a daily & nightly dozen, i.e. 12 most popular questions pushed daily, which people can then vote on (Wishbone, 2015; Kosoff, 2015).
Within 4 months the app grew to become part of the top 10 downloaded social networking apps in the iOS App Store in 4 major English-speaking countries, i.e. US, UK, Canada and Australia (App Annie, 2015). Ranking between apps such as Facebook and Instagram, the question arises how this is even possible? The app currently enjoys a “viral pickup” in popularity, because it makes use of social media trends, such as shifting social media usage towards teenagers and a female dominance in visual oriented platforms (Kosoff, 2015; Lenhart, 2015). Moreover, popular Instagram users post and promote the app to their audience, which is mostly comprised of teen girls – combining both major aforementioned trends (App Annie, 2015; Kosoff, 2015). Last but not least, posts are sharable across platforms, such as Instagram, Twitter, Facebook, Weibo, Pinterest, Whatsapp, Messenger, iMessage, which again helps to increase brand awareness (Wishbone, 2015).
What is so interesting about Wishbone is that it allows brands to use it as a research and marketing tool by offering them a possibility to let users’ vote on a set of products, e.g. two pairs of shoes – one being purple, the other one pink. By receiving immediate feedback by a user base of 3 million active users, and more than 40 million voters every day, brands can use this as a strong tool to test market acceptance of their products (Wishbone, 2015; Kosoff, 2015; Wagner, 2015).
Let’s see whether this is just a recent growth trend, or if Wishbone manages to defend its position in the long run.
App Annie. (2015, April 14). App Annie Index: Market Q1 2015. Retrieved October 14, 2015, from App Annie Blog: http://blog.appannie.com/app-annie-index-market-q1-2015/
Kosoff, M. (2015, September 30). There’s a 4-month-old app that lets you poll your friends — and 3 million teen girls already love it. Retrieved October 17, 2015, from Business Insider UK: http://uk.businessinsider.com/what-is-wishbone-app-for-comparing-anything-2015-9?r=US&IR=T
Lenhart, A. (2015, April 8). Teens, Social Media & Technology Overview 2015. (. Retrieved October 18, 2015, from PewResearchCenter: http://www.pewinternet.org/2015/04/09/teens-social-media-technology-2015/
Wagner, K. (2015, October 3). Wishbone App Hopes the ‘Hot or Not’ Business Model Isn’t Done Just Yet. Retrieved October 17, 2015, from ReCode: http://recode.net/2015/10/03/wishbone-app-hopes-the-hot-or-not-business-model-isnt-done-just-yet/
Wishbone. (2015). Wishbone. Retrieved October 17, 2015, from http://www.getwishboneapp.com/
When talking about microprocessors, the first name that comes to mind is probably Intel, the world’s largest and highest valued semiconductor chip makers. Intel’s dominance in the computer and laptop CPU market is unparalleled and no competitor is even close to be considered a rival. So why is Intel such a dominant force in this market? Bill Holt, the general manager of Intel’s Technology and Manufacturing Group, pointed out that Intel is three-and-a half years ahead of its nearest competitor in the fabrication of three-dimensional features, an transistor architectural adaptation necessary to reduce the size of the microprocessors (Forbes, 2014). This is crucial for manufacturers to stay competitive as smaller space translates directly in, less power usage, lower cost and most importantly greater performance. In addition, as the the silicon manufacturing process becomes more complex, the cost of a silicon fabric has increased from roughly $3 billion to $12 billion, forcing competing players out of the market. The number of players operating with silicon manufacturing process has declined significantly.
To further emphasize the dominance of Intel, the nearest competitor in the CPU market, Advanced Micro Devices (AMD), has around 17% market share and has been declining every year since 2009. The primary reason that AMD still has this percent mark is due to their exclusive partnerships with players in the console industry, providing processors to the Xbox One and PlayStation 4. However, when looking at the PC desktop and laptop market, Intel’s unit share hit over 95% of the total industry sales in the last 4 quarters.
Unlike Microsoft, known for their monopoly practices in the computer software industry which involved numerous high-profile antitrust lawsuits, Intel has been dominating the microprocessor market almost completely under the radar besides a major dispute in 2009 with AMD. How is this possible? Well there is an old controversial story in the history of microprocessors involving the two above mentioned parties and goes like this. To stay out of the potential antitrust lawsuits from the regulatory authorities, Intel has deliberately kept AMD in the business by licensing them the x86 processors design. After one decade, AMD has grown into a small but reasonable competitor. And around the time Microsoft was sued by competitors, the United States and even the European Union, Intel could simply point out and say that they do have a legitimate competitor and is not a monopolist in the CPU industry. So whenever AMD is doing well, as in the mid 2000’s with almost 20% market share, Intel would just take back their share by aggressive pricing. And whenever AMD fell under the 5%, they would let AMD breath again, just enough to survive. Of course this is just a rumor and there is no hard evidence to be found, however the numbers don’t lie as AMD’s market share went up and down so many times that have to start wondering that there must be some truth to this story.
1. Kay R. Forbes Welcome. Forbescom. 2015. Available at: http://www.forbes.com/sites/rogerkay/2014/11/25/intel-and-amd-the-juggernaut-vs-the-squid/. Accessed October 18, 2015.
2. Cunningham C. The rise and fall of AMD: How an underdog stuck it to Intel. Ars Technica. 2013. Available at: http://arstechnica.com/business/2013/04/the-rise-and-fall-of-amd-how-an-underdog-stuck-it-to-intel/3/. Accessed October 18, 2015.
3. Stevenson D. AMD vs Intel: which you should buy. PC Advisor. 2015. Available at: http://www.pcadvisor.co.uk/feature/pc-components/amd-vs-intel-3528212/. Accessed October 18, 2015.
We all love music, but when comes to paying for it, sorry no. That works especially true for the Chinese music industry.
I will start this blog with some boring figures. 471 millions of Chinese users listen to music online, however only a fraction of the services have been paid. According to IFPI, the online music had a revenue for only $91 million in 2014, that gives to $0.19 per user annually — almost nothing. To put it in comparison with the western market, Spotify had an active user base around 75 millions and reported an annual revenue of 1.2 billion last year.
If you ever saw the combination of “intellectual goods” and “China” in the news media, you will certainly understand this is a really less regulated market for intellectual property. The reason is that Chinese consumers are used to getting their music for free, thanks to over a hundred pirate sites in the territory. Music? Why should I pay for music? That is just the sad reality for music industry. Average users just don’t have any incentive to pay for music, given the fact they can get high quality music for free pretty much easily.
But still given the size of the market, it is arguably the market with a great growing potential. It is just like a golden goose which is not laying any eggs, yet. The music industry basically now gives away music to audience and then make money from other revenue channels like concert, fans meeting, ringtones or other idol related products (like t-shirts).
Will Apple music be a game changer?
Apple started to provide its subscription music service to the Chinese market, with an astonishingly cheap price — 10 RMB ($1.57) per month for individual users and 15 RMB for family users. Additionally users can enjoy the 3-month trial period for free. Considering about Apple’s dominant popularity in China’s high-end mobile market, this close to free music service is deadly attractive to its users.
In my opinion, Apple music will grow fast in the Chinese market by using the current pricing strategy. Comparing its main (legal) competitors such as QQ music, Xiami Music or Wangyi Yun Music, Apple have offered a more advanced recommendation system which will attract lots of users. Additionally, it can benefit to a great extent from its own ecosystem. For instance, the Apple music service is also connected with Siri and iTunes, which makes it extremely user-friendly.
Maybe someday in the future, with the slowly changing IP laws in China, the users have to pay for music.
Feng.com,. ‘Apple Music来了: 用还是不用这是一个问题 Apple Music,中国区,音乐,苹果 _威锋网’. N.p., 2015. Web. 18 Oct. 2015.
Chan, Eric. ‘Apple Music 和 Itunes 电影今天正式在中国大陆推出’. Engadget 中国版. N.p., 2015. Web. 18 Oct. 2015.
Forbes.com,. ‘Forbes Welcome’. N.p., 2015. Web. 18 Oct. 2015.
Ifpi.org,. ‘China — IFPI — Representing The Recording Industry Worldwide’. N.p., 2015. Web. 18 Oct. 2015.
You have studied abroad and had to struggle with high transfer fees?
How does it work?
You go to the company’s website https://transferwise.com/ and find a currency calculator, where you can type in the amount you would like to transfer. Once you choose a currency, you can see a detailed explanation on the breakdown of the fees being charged. Then you will have to enter a few personal details before filling in the receiver’s data. You can then choose if you would like to pay by bank transfer or debit card. If you go for the latter, it works similarly to other online payment transactions. If you choose to pay by bank transfer you will be provided with TransferWise’s account details. Now you have to make your transaction (Price, 2015).
How is this possible?
TransferWise helps its customers to circumvent the traditional banking system by making use of a peer-to-peer system, in which a money transaction from a different customer that goes into the opposite direction is matched up against your payment at the mid-market exchange rate (Olson, 2015). This means that your money actually stays in the country, where it is sent from (Price, 2015). By doing so, TransferWise manages to undercut fees of traditional banks by up to 90%. In particular, TransferWise’s fee amounts to 0.5%, while traditional banks’ on average charge 5%. The company differentiates itself by stating that they do not charge any hidden fees as banks (Olson, 2015).
So go and …
How does the competitive landscape look like?
TransferWise faces competitors, such as Dublin-based CurrencyFair, the UK’s Azimo, and WorldRemit (O’Hear, 2015). However, this did not impede TransferWise from strong growth. What is more, having raised $58 million in venture capital funding in January, the company became part of the “Unicorn” club because of its close to $1 billion valuation (Price, 2015b).
How does the global banking industry look like?
Compared with other industries, the banking industry has seen less technological disruptions in the last twenty years (Price, 2015b). Since the last financial crisis however, new technologies have emerged and have started to disrupt traditional banking (Deloitte, 2014). Let’s see how Apple Pay, Google Wallet or other mobile payment services will revolutionize global banking (Marks, 2015).
Deloitte, 2014. 2014 Banking Industry Outlook. Retrieved October 16, 2015, from http://deloitte.wsj.com/cio/2014/02/12/2014-banking-industry-outlook/
Marks, G. (2015, January 1). Why Is Almost No One Using Apple Pay? Retrieved October 16, 2015, from Forbes: http://www.forbes.com/sites/quickerbettertech/2015/06/01/why-is-almost-no-one-using-apple-pay/
O’Hear, S. (2015, February 17). Backed By A16Z, London-Based Money Transfer Startup TransferWise Finally Launches In The U.S. Retrieved October 17, 2015, from TechCrunch: http://techcrunch.com/2015/02/17/crossing-the-money-pond/#.sh9lvz:n1qD
Olson, P. (2015, January 26). Banks Beware: TransferWise Raises $58 Million To Go Global. Retrieved October 16, 2015, from Forbes Tech: http://www.forbes.com/sites/parmyolson/2015/01/26/transferwise-funding-andreessen-banks/
Price, R. (2015, January 26). Here’s How $1 Billion TransferWise Actually Works. Retrieved October 16, 2015, from Business Insider UK: http://uk.businessinsider.com/how-transferwise-works-2015-1
Price, R. (2015b, January 26). Why TransferWise’s $1 Billion Valuation Will Terrify The Banks. Retrieved October 17, 2015, from Business Insider UK: http://uk.businessinsider.com/transferwise-1-billion-fintech-revolution-banks-2015-1
TransferWise. (2015). The clever new way to beat bank fees. Retrieved October 16, 2015, from TransferWise: https://transferwise.com/
Author: 439328kn – Melanie
In decision-making are recommendation systems important. Customers are able to provide their suggestions to other customers, but also to inform firms about their opinions. This is useful for firms, because firms are able to understand their customers better. This could also lead to more profit, but this is depending on several factors. Is it possible that the recommender systems manipulate the customers? In the articles related to this topic, there is already spoken about word-of-mouth and observational learning. Those could lead to an increase in sales. Recommendation systems will provide customers information about opinions of other customers; this will give them an expectation of how well they will like the product or service. People will be influenced by certain events in their environment when they make a choice. This is related to Word-of-mouth and observational learning. Customers do belief that the recommendation system will provide them the best alternative; therefore they will choose what the recommendation system gives them. This could be useful for firms, because they are able to stimulate the sales of certain products or services. Is it possible to manipulate this? I don’t think so. If customers don’t like products or service, they are nowadays able to let everybody out there now it! Of course, the reliability of the system is important as well. If the system is not known or seen as reliable, the ratings will not be accurate. Therefore this will also been noticed by customers, therefore they will not even belief the ratings.
Adomavicius, Gediminas, Jesse Bockstedt, Shawn Curley, and Jingjng Zhang. Do Recommender Systems Manipulate Consumer Preferences? A Study Of Anchoring Effects. SSRN Electronic Journal.
Chen, Y., Wang, Q., and Xie, J. 2011. Online Social Interactions: A Natural Experiment on Word of Mouth versus Observational Learning. Journal of Marketing Research 48(2) 238-254.
Cosley, D., S. Lam, J. Konstanz, and J. Riedl. 2003. Is Seeing Believing? How Recommender Interfaces Affect Users’ Opinions. CHI 2003 Conference, Fort Lauderdale FL (ACM, New York), 585–592.
Social media companies have always struggled with monetizing the big user base that they have. Especially Twitter, the social media platform that lets users send out 140-character messages, has been operating on investment money instead of profit. At the time of their IPO, Twitter was making $500 million dollars in revenue but did not make any profit.
Although Twitter is not profitable, it still had a valuation of $24.9 billion at the time of IPO. But, if there isn’t any profit, what is that valuation based on? The answer is innovation and the prospect of monetization. Many big companies have been outcompeted by startups that applied innovative business models. For instance, Blockbuster got replaced by Netflix and Barns & Noble got replaced by Amazon.
Social media are replacing our old ways of communicating. The reach and influence of Twitter has become enormous but profits are lacking behind. Still, Twitter is valued highly because investors predict that Twitter will find a way to monetize on their influential position in the social media world.
That moment of monetization might just be upon us now. Twitter is introducing their ‘’Buy Now’’ functionality. In September 2014, Twitter started testing a way to buy products directly from their site and app. Together with payment-startup Stripe, they have developed the Buy button. This button enables retailers to turn their Twitter account into a web shop. Consumers just add their credit card details to their account and click the Buy button whenever they see a product they like on Twitter. Of course, part of this revenue will go to Twitter.
Twitter is a great example of the value of the network effect. First, they created an enormous network of people relying on Twitter to stay up-to-date. Only after the massive user base was established does Twitter introduce ways to turn that network into large revenue.
The monetization will not end with the Buy button. Recently, a MKM Partners Internet analysist stated that Twitter can reach a $100 billion valuation if they find more ways to monetize and improve user experience. That statement alone made Twitter stocks rise significantly and Twitter will work hard to reach the ‘’unicorn status’’ that is a $100 billion valuation.
Although Twitter is finally monetizing, many still call Twitter and other startups overvalued. Do you think that Twitter is overvalued or not? Share your thoughts in the comments!
Microsofts is entering forbidden terrain
Microsoft is currently surprising friend and foe by producing their own hardware in the form an expensive laptop. The firm is more flexible than everyone expected.
Windows, Office and Outlook, those are the products that we know Microsoft of. These are all software products, but since Microsoft is now manufacturing its own, super fast laptop, the whole business model changes.
Microsoft is from now on a hardware manufacturer with its own game consoles (XBOX), phones, tablets and smart watches. Two weeks ago, a laptop got introduced into the wide array of products that Microsoft produces.
Nobody could’ve seen it coming since the innovational focus was no longer on Microsoft. Microsoft was considered a big and inert company with no ability to innovate in a disruptive way, and therefore, it could develop the Surface Book without the hassle of prying eyes of competitors. Microsoft was considers inert because the corporate software they are developing is considered dull and in the technological revolution that we currently live in, giant players like Apple and Google dominate the market.
However, the Microsoft Surface is not completely new. It got introduced back in 2012 as a substitute for tablets and laptops, since it amalgamated both products’ characteristic into one, ersome tablet with a keyboard that just didn’t work properly. However, it gained some popularity in the corporate sector because of the mobility of the machine.
The Microsoft Surface can cumbbe called some sort of niche, but in 2012, it gained a revenue of roughly 2 billion dollars. This is a revenue that has not been completely unnoticed; Apple is now entering this niche with the iPad pro which has a significantly larger screen, a stylus and an optional keyboard, which is integrated in a cover. When Apple is imitating you, it is a good sign.
Microsoft is now extending its Surface-line with a ‘tabtop’ that is able to lie on your lap, just like a laptop does. However, it remains an amalgamation of a keyboard and a tablet, since both are disconnectable.
The Sufrace Book is entering the market with a very high price. This is an indicator that Microsoft is trying to distinguish itself by delivering high quality products like, for example, Apple. It therefore competes with the MacBook Pro, but also with some cheaper competitors like Lenovo, Acer, HP and Dell. These companies will not be happy that their biggest softwarepartner is now a competitor in the computer hardware side of business.
The traditional divisions between hardware developers, software developers and online services are now diminishing and Microsoft is now increasing its stakes in premium gadgets. Windows is thereby an aid and not a goal in itself. The operating system is now deployed in order to lure users in towards Microsoft’s (online) services, like OneDrive, Office 365 etcetera.
This is from now on the financial substantiation that CEO Satya Nadella is implementing rapidly. However, this did not come without any sacrifice; Microsoft had to layoff over 17000 of its employees in order to habilitate this strategic change.
The overall strategy is to escape the dull image that Microsoft has by showing the world that it is still able to innovate. Therefore, Microsoft’s structure will consist of three pillars from now on: 1) Windows and Hardware (XBOX, Surface, Phones etc.) will be now one entirety under the name: ‘Personal Computing’ 2) ‘Intelligent Cloud’ and 3) ‘Productivity and Business’ (Office and other corporate software).
An overall shift within Microsoft as you can see, but will this be the shift that will enable Microsoft to compete with its biggest rival Apple?
Hijink, M. (2015), Microsoft’s Buigzame Karakter, NRC Next
As part of the Digital Transformation Project, we are proposing the implementation of a pre-ordering smartphone application for McDonalds Netherlands. On the base of our study conducted with university students living in Rotterdam, a pre-ordering application would be very well perceived at a fast-food chain like McDonald’s. Respondents indicated that, even they associated McDonald’s with quick service, they still had to wait up to 10 minutes for their food. The implementation of an app, that would take care of the ordering, as well as the payment in advance, would highly increase time-efficiency at the restaurants for consumers, as well as employees.
This digital transformation would go in line with McDOnald’s business model in terms of a reciprocal relationship since the implementation of a pre-ordering service would increase time-efficiency, which is a big part of McDonald’s business model. Being an IS Innovator (as they typically are one of the first companies to apply new technologies, as it was the case with NFC bank card payment), the prer-ordering app would moreover enable McDonald’s to secure its market leadership through fostering a relatively new type of innovation. Few companies in the industry have already applied such applications, however, more and more are joining the trend. In order to reassure its market position, McDonald’s should join the trend rather sooner than later.
The application is proposed for the Dutch market, where consumers are very much focused on time efficiencies and are very familiar with the use of smartphones, which leads to the assumption that the application will be accepted and anticipated by consumers. According to McDonald’s, the Dutch market furthermore shows great potential for growth, making it the ideal starting point for the introduction of such an application. The conducted survey confirmed these assumptions since a great majority of respondents indicated that they would make use of such an application if this would mean they would not have to wait for their ordered food.
As for any innovation, financial factors are important to be considered. The cost of the application, including the creation costs, the costs oft he IT expert team, the neccessary machines, and the marketing costs in order to raise awareness about this new ordering channel, are estimated to be approximately US$ 4,650,000. However, McDonald’s can be assumed to have enough financial resources to finance the development and implementation of the suggested application. Furthermore, its in-house tech team can decrease the costs for most kinds of technical issues.
In the end, there are also risks associated with the implementation of a new app, primarily stemming from its development, launch, user surface, and technical quality.
Those risks could involve no interest of acceptance by customers, and therefore more losses than revenues financially. There is furthermore the risk that franchisees will go against the company and not want to buy a license and install the use of the application. Finally, problems could surface due to technical issues, feasibility, and ease of use for certain smartphone operating systems and due to the competitors being further along in the innovation process which applications already further developed, which would turn McDonald’s into a laggard for innovation.
However, overall the implementation of such information technology has great potential and should not be offset because of the possible risks. McDonald’s should implement this application in order to not fall behind in the Industry, where other companies are already successfully employing such technology, and to improve their time efficiency, which is a crucial part of their business.
Marketplace companies can eat entire industries. What is a marketplace company? It is a platform that connects buyers and sellers of a specific product or service. These companies have the ability to challenge the status quo of an industry, which can result in great success as well as controversy. AirBnB for example has created an entire new market and is challenging the hotel industry.
Marketplaces work really well at scale. But building a marketplace start-up, it can be a struggle getting to scale. You need both buyers and sellers to create value. This form of positive network externalities happens when there are more users, which attract each other (Li & Pavlou, 2013). If there are buyers but few sellers, the buyers leave. Yet if there are no buyers, what will convince sellers to sign on? This referred to as the network effect (Eisenmann et al., 2006). The platform’s value depends on the number of users on the other side of the platform (Eisenmann et al., 2006). Because of this problem, online marketplaces are not built overnight. It can take years before a break-out takes place.
Five tips for surviving while building your online marketplace:
- Don’t be to quick to pivot
With a SaaS or e-commerce start-up, you should see sings of traction after six to nine months. It this is not the case, it might be wise to reassess your market or model. For marketplace businesses however, you need to establish both buyer and seller communities. Building a two-sided marketplace means you need more time to prove out your business.
It can take years for a marketplace to get going. It takes a while before the network effects start kicking in. Until that moment, stay focused on the core.
- Lower your burn rate
Because you need to give yourself more time to build your online business, you need to lower your burn rate to lengthen your runway as long as possible. Speed cannot be bought when it comes to building an online marketplace.
At the start-up fase there is no need for a big team or fancy offices. Stay focused on two functions your marketplace relies on; building the product (platform) and building both the buyer and seller community.
- Tighten your focus
It is important to narrow the focus of your business efforts. This is because you have limited resources (because you wisely followed the advise of a low burn rate). A way to deal with this is to start small and expand from there. Build traction in smaller verticals before expanding into bigger markets. Start in a niche and grow organically. The growth can occurs naturally as sellers start listing products in new categories. It this growth outside the niche market does not occur spontaneously, you can speed up the process by focusing on seller acquisition campaigns.
- Focus on your most passionate user
Marketplaces are not built overnight. They are built from the niche to the masses. You need to secure the experience of the early adaptors before your platform can begin to appeal to a broader audience. You want to use WoM of the early adaptors. Make sure these are passionate users. Cater to their needs; this will increase the likelihood of them spreading the word about the experience and your marketplace.
- Believe in your vision
Obviously you should believe in your idea for the marketplace, else you should not pursue the concept. On the other hand your faith should not blind you. You need to keep an eye out for market reactions. Look for small signals that you are on the right track. These entail increases in; WoM from early adaptors, repeat usage from buyers, listing from sellers and positive user feedback.
Building both sides of the marketplace simultaneously can certainly be hard. Give your company enough time to build both sides of the platform. When you reach scale, you can profit from network effects.
Eisenmann, T., Parket, G., Van Alstyne, M.W. (2006) ‘Strategies for Two-Sides Markets.’ Harvard Business Review (10), pp. 1-11
Li, T., Pavlou, P.A. (2013) ‘What Drives Users’ Website Registration?’, Available at SSRN: http://ssrn.com/abstract=2369444, pp. 1-40.
Wertz, B. (2013) ‘5 Tips for building a two-sided online marketplace’, Available at: http://www.forbes.com/sites/ciocentral/2013/02.07/5-tips-for-building-a-two-sided-online-marketplace (assessed 10-18-2015)