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Understanding App Store: The Platform Mediated Network no one talks about!

The App Store was the first online applications store of its kind. Launched in July 2008, it completely changed the way users used the smartphones and developers interacted with their customers.

When it was launched, nobody would have imagined the impact that it would have, but it brought in a whole new way of looking at software and it altered user expectations forever.

The App Store allows users to browse and download apps developed using Apple’s iOS Software Development Kit. These apps can be either free or paid, the pricing decision depends on the developer of the app.

The developers have to purchase the iOS SDK in order to developer apps which allows them to develop apps for various devices like the iPhone, iPad and the iPod. Every app listed on the App store follows a 70/30 revenue sharing model, which means that 70% of the revenue goes to the developers and 30% goes to Apple.

In addition to this users can also buy digitised content in-app and the developer can display ads in the app.

How Apple earns money:

  • Sale of iOS SDK to developers
  • Sharing 30% of the revenue of all app purchases with the developers

How Developers earn money:

  • Sale of apps (they get 70% of the revenue)
  • Sale of digitised content in-app
  • Revenue generated from ads displayed in the app

For Apple this is easy money. They have developed a digital distribution platform for their devices which has empowered both the users and the developers. It has provided them with an endless revenue stream which has generated billions of dollars till now without having to do anything more.

How the App Store spurred a culture of entrepreneurship?

Entrepreneurs were always told that having a good product is not good enough. Marketing that product was equally important. But the App Store was changing this age old perception.

On the App Store the developers could spend 90 percent of their resources on their product and 10 percent on everything else. Before the App Store, it might have been 50/50.

It meant that developers could now reach out, and sell to, everywhere in the world regardless of where they lived.

It also meant that they didn’t have to worry about being big. As a matter of fact, it was often easier for small teams to achieve greatness on the App Store than big, established companies.

But most importantly, it meant that you could build that something you wanted to build. For the first time ever, “building something you loved” became a sustainable business model.

If you build something you loved, chances are that there were another 50 million people in the world who loved the same thing as much as you did. And because of the App Store and the environment it sprung up around itself, those 50 million people would love to hear about your app and be able to buy it from anywhere in the world.

Sources:

http://www.entrepreneur.com/article/227413

http://en.wikipedia.org/wiki/App_Store_(iOS)

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Big Data for Big Energy Savings.

Articles on big data and its many implications for the world around us are yet around for a while and numerous. From improving healthcare and optimizing firm performance to fooling terrorists plots by the NSA, big data’s reach touches nearly all imaginable facets of the modern world. The plots and marketing of the hit series House of Cards has even been based by its creators, Netflix, on observations from their 33 million users, a topic various authors discussed on this blog. These are all great examples of the seemingly unlimited applications of big data and the impact it can have on all of us.

Though, what seems to miss in all the buzz around Big Data is what it can do to help up face the probably biggest challenge of our generation; drastically decreasing our energy consumption.

Is this because of the reluctance of the consumer or are the large energy companies to blame?
Either way, the solution may very well lie in the use of Big Data.

If Netflix created House Of Cards success largely by using the known habits, preferences and ratings of its users available to them, why can’t the energy firms come up with personalized advices and energy saving offerings to its customers?

The Tata Consultancy Services 2012/2013 Big Data Study revealed that the Energy sector is one of least advanced sector with regard to the use of Big Data. Whereas in the same study is stated that Energy firms Big Data spending in 2012 resulted in a 60.6% return, the second highest score!

tata

Table from The Tata Consultancy Services 2012/2013 Big Data Study

Energy companies could start right away with using the terabytes of data on past bills and participation in past energy saving initiatives to send out personalized advices on energy saving. Furthermore, they can send personalized offers for energy-saving products and measures. This can greatly increase the engagement of their customer and result in new revenue streams. And effectively face the greatest challenge of our generation.

How would you feel about receiving personalized advices and offerings to reduce your energy consumption from your energy provider, based on your past energy consumption behaviour?

Resources

The Tata Consultancy Services 2012/2013 Big Data Study, 2013, Tata Consultancy Services Limited

Why Big Data Analytics Could Spell Big Energy Savings, 27 February 2013, Spotfire Blogging Team

Let the gaming begin? Another Amazon vs. Google fairytale

A bit more than three weeks ago Amazon closed the $970 million deal to acquire the video game streaming platform Twitch.Amazon1

Twitch is the largest live-streaming website in the United States which lets users record and show their own gaming experiences, as well as chat with other players. Lately, the platform has also expanded into non-gaming ventures, like streaming concerts. With more than 55 million monthly active users Twitch has raised $35 million since debuting in 2011.

Sounds nice. But why would Amazon envelop a game-streaming network?

One reason could be just to annoy its big search competitor Google. The Mountain View company was in acquisition talks with Twitch in May but failed to close the deal due to concerns for potential antitrust issues. Sounds familiar? Well, in this case Google itself called the acquisition off. By already owning Youtube, the world’s most-visited content streaming site and competitor of Twitch in broadcasting and streaming live or on-demand video game sessions, Google supposedly had difficulties consenting on a potential breakup fee with Twitch in case the deal did not go through with antitrust regulations.

Why else if not only to irritate a competitor could Amazon be interested in Twitch?

There is various speculation going on in the market. One rumor is that Amazon´s interest goes far beyond gaming andAmazon2 possibly into streaming of other activities. According to that, by performing the acquisition the company is investing rather in internet infrastructure than in gaming media because what Twitch has built up is essentially a video-based community that could feature any activity. Another guesswork states that Amazon might primarily be interested in the advertising power inherent in Twitch´s community. The average Twitch user is between 18 and 49 years of age and plays about 106 minutes a day – this represents a highly captive audience for ads and other content.

These are only some conjectures about the plans Amazon could have in mind with its envelopment strategy. What do you think the shopping platform will do with the freshly acquired online-streaming community? Build a second Youtube, dive deeper into the game scene or create something entirely new?

Sources:

http://www.gamespot.com/articles/amazon-completes-twitch-purchase/1100-6422606/
http://www.geekwire.com/2014/amazon-completes-acquisition-twitch/
http://www.forbes.com/sites/ryanmac/2014/08/25/amazon-pounces-on-twitch-after-google-balks-due-to-antitrust-concerns/
http://www.computerworld.com/article/2826673/google-considers-amazon-as-its-biggest-search-competitor.html

Steam: An examination of a multi-sided network

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.

Impact:

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.

Fat Tail Product Placement, So Many Choices!?

A while back I saw the TED talk about the paradox of choice (see video below). A very interesting talk in which the speaker, Barry Schwartz talks about how we the consumers are being bombarded with evermore choices and how this “freedom” is actually impairing our happiness.

Interestingly enough this view is in stark contrast with the current trend of long tail product versioning/marketing. Product (hyper)differentiation is becoming the norm where niche products that appeal to a smaller market share are being pursued for the increased profit margins. In theory this sounds logical but how far will the long tail eventually go? Will we be seeing smartphones with bottle openers in the future? (Actually that’s not even half bad of an idea, patent pending).

The selfie camera
A prime example of this long tail, product differentiated approach is the ‘HTC Desire Eye’, which has been dubbed ‘the selfie’ camera. Sporting not one but two 13 megapixel cameras with dual flitsers in the back as well as the front this phone will cater to even the most advanced self indulged selfie lunatic. However one thing the good folks at HTC have done correctly is making it a good phone in conjunction with the selfie camera. The phone sports a full HD (1920-1080p) screen, 16GB internal storage, optional micro-sd card expansion, Snapdragon 801-soc processor, all in all a nice set of hardware for a relatively low price (€499 at the time of writing this). This phone raises an interesting question namely, is this the future of product differentiation? Catering to one specific customer segment based on a specific preference while still including all the features and hardware that appeals to the ‘fat’ part of the tail (the masses). This, in my opinion is a very interesting development especially if we consider what is discussed in the video. Will this advanced product versioning truly make us, the consumers happier? Or will there be a turning point in which we all as a collective will hope for less?

Fingerprints; safe feature or actually quite risky?

Fingerprints have been used in passports for years, saved on paper. Mostly used to check for authenticity when leaving the border. But with the digital transformation of the society, so have fingerprints. Using your fingerprint to identify yourself is very easy, and it offers quit some benefits compared to passwords. It is impossible to lose your fingerprint, you can’t forget it. There is no chance on ‘bruteforcing’ your fingerprint by trying different solutions, and where passwords are often obtained by social hacking or (finding a password by studying somebody’s history) or actual sharing, fingerprints have none of those weaknesses.

Fingerprint’s have been used for years in personal items. One of those is the Biometric Safe of Barska. Sometimes a key just isn’t safe enough. Barska’s safe allows you to store guns and other items that you would not want your children to have access to. It’s technology is rather simple and offers a biometric scanner that remembers your fingerprint. The safe locks up after reading it and won’t open again until you put your finger back on the scanner.

With modern advancement, big companies have also seen the fun in fingerprints and are implementing it in different, more technological ways. Apple has introduced its so called  ‘breakthrough Touch ID’. The technology allows to unlock your phone with a simple fingerprint. The opportunities don’t stop there. Your fingerprint also allows you to approve purchases from iBooks, the app Store and iTunes after you have given permission to buy with your fingerprint. With the recent introduction of Apple Pay, the iPhone also allows you to pay in thousands of physical stores and even more online sites and apps with just your fingerprint.

Just two days ago Mastercard has announced that the company has started an experiment with a fingerprint scanner in the creditcard. The card has a specialized small scanner and stores the information only on the card itself. The creditcard needs a battery to function and users will need to charge it to function. Mastercard stated that future iterations of the card will be more efficient and can be charged by just sweeping it through payment terminals.

But not only companies, also governments are catching up to the digital possibilities of fingerprints. The European Union is slowly putting up regulations among its members to have fingerprints in passports mandatory. The fingerprints will be saved in a huge digital databank. At the moment, the Dutch government was still able to block this and a majority of the Dutch politicians are against fingerprints in passports. The politicians still think fingerprints aren’t the safest way of identifications. Are these concerns justified?

Researches have looked at different ways of attacking the fingerprint scanners and found at least 6 legitimate attacks to beat the system:
1. Use the finger itself. The researchers found that one of the highest risk is still being forced to press your own alive finger against the scanner. It is easier for criminals to use your finger than to find out your password. As advice they give to always combine fingerprints with passwords.
2. Use someone ells his finger. The research showed that most fingerprint scanners work with a system of categorizing the user with loops, whorls or arches. If the attacker knows which category the user belongs to, he might be able to find a person within the same category.
3. Use a severed finger. This is almost a Hollywood movie plot, but the researchers state this a option that could be used frequently in high level crime. Sophisticated systems can counter this attack by putting in a extra check to detect if the finger is actually alive.
4. Use a genetic clone. Again, the risk of this happening seems farfetched. The researchers state that sometimes twins can have fingerprints that look alike so much, they fool the system. Fingerprints aren’t genetically determined but is a pattern of the nerves growing into your skin. Still, some twins seem to have almost identical prints. A really precise system however, can still find the difference.
5. Use an artificial fingerprint. The biggest risk of all, use a fake finger with the real subjects fingerprint. This fingerprint can either be obtained physically or from a (hacked) database. Researchers have been successful in making a fake finger that could trick scanners in thinking it was the finger of the original user.
6. Other ways. Fingerprint systems are just systems too. Some attackers may use strange errors to fool the system into believing something that didn’t happen. Reports have been made that exposing sensors to extreme lights, heat or cold, different humidity’s or vibrating the scanner can cause it to malfunction and give access to the hackers.

Sources:

http://www.barska.com/Products-Biometric_Safe.html

http://lucidfood.com/2014/01/09/passport-iran-struggled-get-iranian-citizenship/

http://cryptome.info/0001/gummy/gummy.htm

https://www.apple.com/iphone-6/touch-id/

http://tweakers.net/nieuws/99115/mastercard-experimenteert-met-vingerafdruklezer-in-creditcard.html

http://www.privacybarometer.nl/maatregel/62/ID-kaart_zonder_vingerafdrukken

Why Bugdroid Is Here To Stay.

Android Logo

Currently, the two largest player in the smartphone operating systems industry is Google’s Android (Danova, 2014). In particular, Android has vastly increased its market share over the past four years, whereas the other operating systems either remained approximately equal (iOS) or even declined in market share (Microsoft, BlackBerry, etc.) (Danova, 2014). Yet, what could explain the rapid growth of Android? The answer to this question may be found when looking at the business models of the operating system.

The business model Android can be described as a platform mediated network. This means that the operating systems is a mere platform, that consists of components, rules, and architecture (Li, 2014). The Android platform brings together software developers on one side, and users on the other side. When zooming in on what actually attracts these two types of users, it becomes evident that the presence of the supply-side (app developers), attracts a larger demand-side (users), and vice versa. Therefore, this dependency among the different types of users is called network effects (Li, 2014). There are two types of network effects: direct and indirect (Li, 2014). In this case, the direct network effects are based on the number of users of Android-supported phones. However, since Android phones can perfectly communicate with for example iOS or BlackBerry phones, there are no direct network effects present. Instead, Android experiences indirect network effects, as the value to both sides of users depends on complementary products, such as apps (Li, 2014). Thus, if we want an answer as to why Android currently has such a large market share, we must look into both sides of Android’s users. The app developers use Android to market their apps, as Android supports a wide variety of phones (see the fragmentation in figure 1), and therefore users (Asay, 2014). Similarly, since there are more phones that support Android, the customer base of Android will also be larger.

Figure 1: The fragmentation of Android-supported devices (Asay, 2014).

Figure 1: The fragmentation of Android-supported devices (Asay, 2014).

Another factor that may contribute to the large market share of Android, is the fact that it is part of Google. In particular, Google has taken over from Apple as the most valuable brand in 2014 (Li, 2014). Since there are high switching costs involved, i.e. consumers tend to stick with a brand that they are familiar with, users of Google in general (web browser software, productivity software, etc.) will also tend to use the Android operating system (Eisenmann, Parker, and van Alstyne, 2010). Furthermore, the increasing platform envelopment of Google, that is the expanding functions of the firm, will also attract more Android-users in the long term (Eisenmann et al., 2010; Li, 2014).
So, don’t be surprised when you will own an Android device in the future: Bugdroid, the Android robot is here to stay.

Bibliography:
Asay, M. (2014). ‘It Really Pays To Be An iOS Developer, But There’s Still Hope For Android’. Business Insider. Available from: http://www.businessinsider.com/android-vs-ios-developers-2014-8
[Accessed on: 19 October 2014.]

Danova, T. (2014). ‘Here’s What The Global Smartphone Market Looks Like Ahead Of The iPhone 6 Launch’. Business Insider. Available from: http://www.businessinsider.com/the-state-of-the-smartphone-industry-2014-9 [Accessed on: 19 October 2014.]

Eisenmann, T., Parker, G., van Alstyne, M. (2010). ‘Platform Envelopment’. Harvard Business School. Available from: http://www.hbs.edu/faculty/Publication%20Files/07-104.pdf
[Accessed on: 19 October 2014.]

Li, T. (2014). ‘Slides Lecture 7: Platform Mediated Networks’.

Importance of user location in mobile applications

Identifying User Location has been gaining a lot of importance in mobile applications because this helps in tracking and predicting contextual user behavior at certain places and certain points of time. It conveys information about the user behavior/experience at different locations such as shopping streets, restaurants, universities or railway stations. This data about user locations helps in multiple ways:

  1. Marketing analytics: Based upon this user behavior insights from analytics, targeted advertisement campaigns can be designed to be pushed to users at specific locations. Offline businesses can utilize this further to attract customers who are passing nearby by pushing notifications to their devices informing them about latest discounts/offers. Facebook also announced that user location would be utilized for displaying real-time advertisements. For ex. Supermarkets can push deal notifications whenever a user passes near to their place and have an app installed or even detect users at a precise shelf or display (through Beacons described later).
  2. Consumer research: Specific businesses can also create survey campaigns and through this information collected from respondents, companies can decide where to place advertisements, shops or kiosks. Surveys can be made more targeted or personalized and delivered right at the point and in the moment of experience with combinations of user location and preferences. This enables lesser reliance on recall, more emphasis on real-time opinion collection at user’s convenience and getting an accurate feedback/response. For ex. For a user coming out of a movie hall, a notification is pushed to send feedback for the movie.
  3. Improving road traffic: Location information can also assist in utilizing traffic data from user’s location to design traffic signaling or traffic planning or users can plan their routes. Google Maps enable viewing traffic details through information obtained from users who have enabled GPS and using their speed to create a traffic map. Mobile operators can obtain user location by triangulation with mobile towers very easily and understand where the customers are spending time to enable advertisers to select right place. This also assists ride sharing applications such as lyft (https://www.lyft.com/).
  4. Connecting people: Location information can also help in connecting people (friends or relevant people with common interests). Foursquare is one such application that helps users discover local places and meet friends. This would help in huge conferences, or festivals, or music concerts where people can enable their location detection, preferences and find friends through app.

Technologies utilizing user location

To improve the ecosystem of location detection, various technologies exist which create a smoother interaction with user location and utilize this information in innovative ways as follows:

  1. Geo-fencing: This technology works by creating a virtual perimeter and whenever the user crosses these “virtual fences” (detected by GPS on user device), users get a contextual notification which may be a feedback survey or an exciting offer if they have signed up and based upon their preferences. There are companies with success in marketing campaigns with location based targeted advertisements.
    1. Use case 1: A shoe store ‘Meat Pack’ wanted to attract customers going to its competitors which were its key audience. Every time a customers with a MeatPack installed entered the store of the competitor, they received a notification about a countdown time (reduced by 1% every second) from 99% discount which stops when the customer enters the Meat pack shoe shop. Thus Meat Pack did not only attract the customers quickly and efficiently. Meat Pack had stolen over 600 shoppers from competitors and one very speedy customer managed to get 89% off a pair of shoes! 
    2. Use Case 2: Placecast, which offers location-based marketing services, created geo-fences with a radius of 0.5 miles around over 1000 pubs in the UK that sold Bulmers MMS message informing them where they could claim their offer on Bulmers cider.
  1. Nearfield technology: This technology communications between nearby devices through Bluetooth Low Energy (BLE) transfer. The information transmitting device has location information which connects with information receiving device and helps in identifying users through their devices. There are tiny information transmitting devices knows as Beacons which can be placed at specific places and whenever the user crosses nearby these devices, the user location can be precisely identified and appropriately utilized. This works without GPS and can be utilized in supermarkets, restaurants etc. For ex. Apple has developed an iBeacon technology for their devices to identify user location.

Issues with getting location information

  1. User awareness and convenience: A major difficulty is to attract or engage users to start sharing location information. Currently, data is obtained through metadata present in photos and videos shared online, through socializing applications (Facebook check-in or Foursquare) and through utility applications (Google Maps). User information Privacy is an important consideration to make users more open to sharing location. This should also be an opt-in process and users might need incentives for sharing location information (discount coupons for filling surveys).
  2. Compulsory connection to Internet: Both technologies described above need access to internet as one necessary condition for information delivery, which can prove to be a bottleneck for devices not connected to internet every time and lead to interruptions in user location information.
  3. Accuracy and precision: To enable interconnection between people, it is essential that location detection is more precise and correct to finer details. Absence of this would lead to inaccurately triggering notifications which could be both irritating and frustrating for the user.
  4. Phone limitations: Low end phones can’t handle location due to absence of features and high end phones use up a lot of battery. Also, variety of mobile devices do not track location in a coherent manner so the information aggregation becomes difficult.

Conclusion:

It is essential that all these location based services ultimately add value to the user and not make them feel unsafe or frustrated. The business strategy of employing a user’s location needs to be though out clearly. Any company targeting users on the basis of their location need to clearly describe what level of information would be obtained and utilized before asking for user’s consent. User awareness about the implications of sharing location data will go a long way in developing the ecosystem further and increasing location information literacy for the user. When sellers know where and what their customers, are doing, they can select a better deal to go through.

Sources:

  1. Golden, Paul, 2010. Moving Targets. [Online] Available at: http://www.research-live.com/moving-targets/4003637.article [Accessed 17-10-2014].
  2. Zickuhr, Kathryn, 2013. Location-Based Services. [Online] Available at: http://www.pewinternet.org/2013/09/12/location-based-services/ [Accessed 17-10-2014].
  3. Apple, 2013. iOS: Understanding iBeacon. [Online] Available at: http://support.apple.com/kb/ht6048 [Accessed 17-10-2014].
  4. Erica, 2012. Unresolved issues in location-based market research. [Online] Available at: http://www.kinesissurvey.com/unresolved-issues-in-location-based-market-research/ [Accessed 18-10-2014].
  5. Crocker, Peter, 2014. More than maps: the evolution of location-based applications http://research.gigaom.com/report/more-than-maps-the-evolution-of-location-based-applications/ [Accessed 18-10-2014].
  6. Wikipedia, 2014. Google Traffic. [Online] Available at: http://en.wikipedia.org/wiki/Google_Traffic [Accessed 18-10-2014].

Big Data Analytics, House of Cards and Future of Television Creation & Consumption

There are some posts, posted earlier on this blog, which talk briefly on how Netflix used Big Data Analytics to come up with the theme, plot, characters, actors and other elements of their original series, House of Cards. (Post link1, link2). This post dives deeper into how Big Data Analytics and Algorithmic Programming will shape the future of T.V. Series. This partially ties with the discussion in class in Session 6 regarding how consumer behavior is studied, modeled and influenced.

The television consumption industry is changing at a very brisk pace. People now expect television to fit into their own schedules and it is predicted that weekly scheduled television broadcasts will soon be eclipsed by on-demand entertainment. (Leber, 2013).

There haHOCs been a lot of buzz and stir in Data Analytics and Television Media circles since the creation of House of Cards. Netflix knew that its original series would be a grand hit based on the data of viewing habits of its 33 million users (Leber, 2013). Based on these tagging and recommendation system Netflix could understand

  • how viewers were enticed by political dramas (like British version of House of Cards)
  • how large proportion of viewers liked watching actor Kevin Spacey in the direction of David Fincher
  • how different trailers attracted the attention of different users.

and use this data for the creation of the series, which was made available all at once. Netflix was able to leverage its long lasting relationship with customers and using that data of their viewing  habits they were able to place their bets and produce ‘House of Cards’.

How much and what kind of data does Netflix deal with?

To put the movie viewing habits of viewers in perspective, the number of people watching movies streamed online was higher than those watching them on physical DVDs in 2013-14 (Sandvine, 2014). Also a third of data buffered during peak hours was due to movies streamed online.(Sandvine, 2014). Netflix mines the data of around 30 million ‘plays’ a day, including when their users pause, rewind and fast forward, 3 million searches, 4 million ratings by Netflix subscribers as well as the devices on and time of day when shows are watched.(GigaOm, 2012). In addition, TV shows and movies on Netflix are annotated with hundreds of tags inserted by viewers to describe the genre, the tone, the action and the talent, among plethora of other things. While in the past, those tags were used to recommend other shows by Netflix from a long list of titles on the service, now Netflix is using them in the creation of original content because it knows what people want. (Carr, 2013). While looking back at the show created and application of data analytics, begs to ask a more fundamental question, ‘Can creativity be automated’?.

Steiner, in 2012, in his article titled the same, started with the premise that creativity can’t be copied by machines as creativity is believed to be the product of mysterious processes within the right side of the human brain but later tells that complex algorithms are moving into creative fields and proving that in some of these pursuits and humans can be displaced. This is already observed in the case of music composers and creative writing. He also mentions that David Cope, a professor emeritus at UC Santa Cruz, believes that technology is almost there in not only replicating and reusing good music but creating new music. (Steiner, 2012)

Cope has been weaving thousands of lines of LISP code into music-making algorithms for 30 years. At first this produced crude music unfit for public performance, but now his algorithms compose music that imitates masters like Johann Sebastian Bach so well that people can’t always tell the difference. Cope feeds music to machine-learning algorithms that create new compositions by changing and building on patterns it finds in existing music. But his latest algorithm, which he’s dubbed Annie, takes programmed creativity yet a step further. She decides on the musical patterns, the criteria, and ultimately, the path she takes to making music. “I have no idea what she’s going to do sometimes,” Cope says. “She surprises me as much as anybody.”

Implications on Television Content Creation and Consumption

As companies like Google, Netflix, and Amazon, which know more details about our detailed watching habits, start to become more dominant forces in the creation of original programming, they could start also shaping creative decisions of directors and writers as well (Leber, 2013). In the years to follow all aspects of television content making including screenplay may be written to meet the whims of data-driven media streaming companies. Also, consumption, as mentioned earlier in the article, is believed to entirely move from broadcast schedules to on – demand viewing.

Important terms

IBM defines ‘Big data analytics’ as

the use of advanced analytic techniques against very large, diverse data sets that include different types such as structured/unstructured and streaming/batch, and different sizes from terabytes to zettabytes. It has typically has one or more of the following characteristics – high volume, high velocity, or high variety. Big data comes from sensors, devices, video/audio, networks, log files, transactional applications, web, and social media – much of it generated in real time and in a very large scale. Analyzing big data allows analysts, researchers, and business users to make better and faster decisions using data that was previously inaccessible or unusable.

  1. Leber, J., 2013. “House of Cards” and Our Future of Algorithmic Programming [Online] Available at: http://www.technologyreview.com/view/511771/house-of-cards-and-our-future-of-algorithmic-programming/ [Accessed 17 10 2014].
  2. Sandvine, 2014. Global Internet Phenomena. Available at: https://www.sandvine.com/downloads/general/global-internet-phenomena/2014/1h-2014-global-internet-phenomena-report.pdf/ [Accessed 17 10 2014].
  3. GigaOm, 2012. Netflix analyses a lot of data about your viewing habits. Available at: http://gigaom.com/2012/06/14/netflix-analyzes-a-lot-of-data-about-your-viewing-habits/ [Accessed 17 10 2014].
  4. Carr, D., 2013. Giving Viewers What They Want. Available at: http://www.nytimes.com/2013/02/25/business/media/for-house-of-cards-using-big-data-to-guarantee-its-popularity.html [Accessed 17 10 2014].
  5. Steiner, C., 2012. Can Creativity Be Automated? MIT Technology Review June 2012.

Digital Transformation Project Group 13: Better serving of niche customers in the retail banking industry.

The sector that we have examined in our assignment is the retail banking industry, with a focus on core banking services, which most people use on a daily basis. Starting with the financial crisis of 2007/08 commercial banks had to undergo a series of challenges and changes. This led banks to restructure costs, internal processes and redefine their customer strategies.  Nowadays, the banking environment is harsher than ever before and everything is revolving around a customer-centric business model with the purpose of achieving higher understanding of what clients want and improve the overall customer experience. As the new set of challenges for banks have been coalesced, retail banks have turned their attention towards differentiation from competitors. Exploring new customer segments and winning the loyalty of overlooked customer niches can be a means to such a goal.

This paper introduces arguments for a digital transformation project as the first steps towards realizing the stated goal.  To capitalize on the potential of a potential disruptive change in a comparably conservative and traditional industry would bring surprising benefits to an organization, counting increased brand trust, customer centricity and setting a new standard in the branch strategy of banks in general. For this assignment we offer a detailed look into the niche market of the hearing impaired.

Communication is a problem and specialized help for these customers is scarce. The problem is made more difficult due to the closed community which, compared to the blind community, features no universal language. The hearing-impaired communicate by sign language but every country has its own signs and smaller districts have their own dialect. Making it hard even for people whose first language is sign language to communicate with each other.

To overcome this challenge, ING Bank Śląski has undertaken the immense task of accommodating such individuals by offering a service which many of us could not even imagine living without – basic banking.  Having control over personal finances is elusive for the hearing impaired due to the nature of the commercial banks. There is a recorded case in which the Poland legislation has prevented a man from resolving an issue with his bank caused by an identity error from the bank’s server. During a phone call, the deaf man’s wife offered to act as an intermediary on his behalf on the telephone, however due to the bank’s strict policies, the bank was unable to discuss his private finances with her. Finally the couple arrived at the bank and in the presence of a bank lawyer they were able to solve the rather straightforward problem.

This type of behavior has been challenged at ING Bank Śląski and has been addressed in commercial banking in Katowice for the first time. As Mirosław Forystek, Bank Director responsible for IT Department at ING Bank Śląski has remarked in an interview “As a company socially responsible, we offer practical solutions where we can improve service quality and comfort. We hope, that we will create a new standard of hearing-impaired customer service.”

Since June 2014 ING Bank Śląski has officially started a partnership with Migam.pl. The company has shown great potential and talent in developing software for translating Sign language into plain text through the help of Microsoft’s gesture-capturing technology – the Kinect camera.  Their ongoing development efforts promise a cross-language service that will, in the future, incorporate most of the Sign languages in the world and be able to enable communication between people who communicate in different sign languages, as well as orally.

In our assignment we propose a business plan implementing a digital translator by using Migam’s software in combination with Microsoft’s Kinect. ING Bank Śląski would benefit greatly from being the first company to extend their core banking services to hearing impaired customers through this digital transformation. However, some comments need to be made. Too early adoption rate will not be rewarded, and shareholder expectations might not be realistically met. Furthermore the risk of overinvesting or relying on the technological value chain completely can create high switching costs.

The grounded next steps follow a cautious and incremental extension of the service in the branches. By leveraging current infrastructure and cheap iterations such as the project currently being developed, ING can control the direction of their standard in banking, as well as create trust and brand recognition.

Smart locks – not the key to a smart home?

Just this week another smart home gadget was brought to market, gaining attention in multiple media sources. August is a new smart lock concept designed by Yves Béhar, a renowned designer behind many tech products. But is the design enough for this lock to rise above the rest? Many similar concepts have come out in the last years, none of which have become hits the same way another smart home device, the Nest thermostat has.

My first encounter with smart locks was probably about 10 years ago already during a visit to a housing expo in my hometown in Finland. Swedish lock manufacturer, the largest lock company in the world by sales volume, ASSA Abloy, had just brought their house central locking system to market. Similar to the newer designs, the system would be installed on top of an existing lock. Smartphones weren’t out yet at the time, so it would work with a fob similar to car keys with locking and unlocking buttons. Quite high tech at the time, but attention was taken away from it at the expo by the intelligent sauna that could be turned on with a text message. We love our saunas.

As a big fan of the show Shark Tank, when I first heard of the new August lock I thought it was the same company that got an investment offer on the show. Turns out there are a few entries to this market already. UniKey didn’t end up taking the Sharks’ money, but was brought to market together with a traditional lock manufacturer. Kwikset manufactures the locks whereas UniKey will provide the application to control the lock, the “key”. Why cut margins by not manufacturing it by themselves? UniKey’s founder Phil Dumas says the value is in the services provided, not the actual lock. Most smart locks allow for sending keys to people who need temporary access to your home from your smart device and the systems collect information on who has entered the home, so for example a parent can know when their child has arrived home from school. Having a larger network of people with the smart lock installed reduces the need to educate the user and they will have the app already installed on their phone. The more users they will gather on their lock platform, the more likely they are able to convert users of the app to lock owners. The smart lock companies will make their money in the long run based on the levels of service the lock will offer the user. They could eventually become the locksmiths; you can pay to create keys or pay a subscription fee to support the amount of keys you need.

The new smart locks still have the same flaw, which made my parents go with the traditional lock and key when they changed their locks. They are all powered by batteries which have to be replaced. In the case of August this would happen every year. They are not maintenance free and when it happens to break or the owner’s phone dies, you still need to rely on a traditional key. It’s not a complete replacement, but interestingly it could be an enabler for the new sharing economy. AirBnB locations installed with smart locks could reduce hassle with handling keys. Band training spaces and other shared locations could also benefit from both user access control as well as the records kept of each entry.

The big difference between smart locks and the smart thermostat is that the thermostat ends up paying itself off through reduced heating expenses. This is based on the information it gathers about the inhabitants of the home and their movements, adjusting to their heating needs. As the thermostat already knows when you are in the house, a smart lock isn’t needed for this purpose. It only makes it easier to grant access to your home. They are nice to have, but they do not add much to the security of the home and the value in the smart home ecosystem is low. The cost of one lock is about 200 US dollars so it is quite a price for not having to take your key out of your pocket (you’ll still carry one).

Sources:
http://pando.com/2013/05/08/life-after-shark-tank-the-real-story-of-how-unikey-finally-came-to-market/
http://gizmodo.com/are-smart-locks-secure-or-just-dumb-511093690/all
http://gizmodo.com/heres-your-smart-lock-of-the-future-today-510358843
http://www.wired.com/2014/10/august-smart-lock-review/

Digital Transformation Project Group 18: Transforming HousingAnywhere B.V.

Our Digital Transformation Project revolves around the student housing market. As most of you know, the student housing market in the Netherlands as well as in most university cities is fierce and especially for exchange students and international interns, housing is often difficult to find. Finding appropriate housing remotely and for a limited time period can be very difficult, since the traditional way of looking for housing entails the viewing of several rooms and usually housing contracts have minimum durations that are longer than university exchange semesters last.

The company that we have analyzed is Housing Anywhere B.V., a local start-up company founded in 2009 in Rotterdam by two former students of Erasmus University. Through their website, they provide an online platform which aims at solving the afore mentioned problem.

The current business model of the company intends outgoing students to sublet their rooms to incoming students, enabling them to find appropriate housing. For both, the housing-suppliers and the housing-consumers, the platform is free to use. Nevertheless, HousingAnywhere’s business model entails several weaknesses and threats, as the revenue created does neither originate from the housing-consumers nor the housing-suppliers but is generated through contracting a third party, namely the relevant universities in each city, who pay for their students to have a positive experience.

Overview of HousingAnywhere’s platform structure:

HousingAnywhere

Since these universities do not directly benefit from HousingAnywhere’s offer, this system creates dependencies and threats to the sustainability of the growth and competitiveness of HousingAnywhere. Integrated in the problem of the dependencies on the universities is the problem of a limited adoption rate of the platform and a limited revenue because the current business model focuses on students as platform users on both sides and excludes many potential suppliers of rooms, as controlled by the universities. Thus, a critical mass on the supply side is missing to ensure a fast growth of the network.

In order to counter these identified problems, we propose several changes in the overall business model, such as broadening the possible supplier base and changing the revenue model from a sole dependency on the universities to a model where the housing-consumers generate the main revenue stream. Additionally, we suggest to subsidize the supply side not only monetarily but also through the offering of value-adding services.

Along with a change in the business model, HousingAnywhere has a need for an information strategy that accompanies its transformation. Thus, we present three information systems that will help HousingAnywhere to add value to their offer and attract more users on both sides of the network: (1) A data system, that shall analytically add value to the data gathered by HousingAnywhere’s platforms, (2) an automated payment system, that provides a more secure payment environment to housing-consumers and suppliers, and (3) an automated contracting system that shall help suppliers around the world to easily set up and exchange contracts with their respective customers online. The analysis of benefits, costs and risks encourages us to suggest to implement all three solutions in order to improve HousingAnywhere’s business model.

In order to leverage the benefits of the proposed solutions as early as possible, we suggest that HousingAnywhere starts the planning, development and implementation of the systems right away, thus increasing the potential for growth and a sustainable competitive advantage in the market.

Nevertheless, in order to reduce the risks incorporated with such a major change in the business model and the information strategy, we recommend HousingAnywhere to plan the implementation of the new information systems incrementally and run pilots before fully rolling out the systems. Together with thorough market research and an aligned marketing strategy these recommendations can help HousingAnywhere to defend their competitive position against new market entrants and to grow.

Digital transformation project: 3D printing for Nike (Group 30)

This report showed that 3D printing probably will have a large impact on the shoe industry. Companies like Nike and New Balance are already experimenting with shoes that have 3D printing elements. Currently, it is not possible to produce shoe components with 3D printing that are durable and cost-effective. The shoe companies use 3D printing currently for the rigid parts of shoes (e.g. spikes). The next will have to be that semi-rigid and soft components can be produced using 3D printing. Furthermore, the processes of producing all the parts using 3D printing will have to be optimized and will have to reduce in costs. When this will be achieved, 3D printing will have several large benefits, as discussed.

Although Nike already started to adopt 3D printing, the recommendation to Nike is to further adopt 3D printing and to make customization a larger part of their business model. This means that mass manufacturing will have a smaller part in the future business model of Nike. However, Nike should not completely move away from mass manufacturing. This is due to the fact that, 3D printing will not completely replace assembly lines or machines. Instead, 3D printing will serve as a complement to traditional manufacturing. Furthermore, it is the question whether all customers will be willing to buy customized shoes. This reason for this is that they have to go through the process of designing, which slows down the buying process.

The use of 3D printing can change the business model of Nike in several ways. With 3D printing, Nike will be able to extend NIKEiD. This is due to the fact that more complex designs with more details can be made. The role of the physical stores could also change when customization becomes a larger part of the business of Nike. The role of the physical stores could be that they measure customers’ feet and record data for the design of shoes. Another role that 3D printing could play for Nike is the ease of production location. Nike footwear has mainly outsourced production to Vietnam, China and Indonesia. With 3D printing, it could be possible to bring the production (back) to western countries because it is less labor intensive. This would make it possible for Nike to bring the design process and the manufacturing process closer together. As a result, customers can receive their customized shoes quicker because of shorter lead times.

There are several risks that the management of Nike should take into consideration when further implementing 3D printing. First, 3D printing produces unhealthy air emission and this could produce health problems for the manufacturing workforce of Nike. Second, 3D printing systems use a lot of energy. This could lead to high energy costs for Nike and this could reduce the costs benefit that comes along with 3D printing. The last risk is that, in the long run, customers themselves could become end producers of shoes and do not need Nike anymore for the production of their shoes.

Shoes will be 3D printed within 10 years. Therefore, the implementation of 3D printing for Nike should be achieved already in 2025.

Paradigm shift in E Commerce: Move from Product Sales to Service Marketplaces

E commerce growth till recently was dominated by product sales companies like Amazon, eBay, Walmart, Best Buy and Staples. (Laumeister, 2014). But recently the industry has witnessed a tremendous growth in service marketplaces which gives us a slight glimpse of how the industry is going to shape up in the near future  Online marketplaces are transforming retail industry, creating huge value for some players in the market and huge challenges for some of the others. (Bellaïche, Chassaing and Kapadia, 2012)

The aim of this post is to analyse why service marketplaces are booming, why is it difficult to create a service marketplace, how did successful marketplaces overcome these difficulties and finally why are venture capital firms pouring huge money into these marketplaces. This closely relates to the discussion on E Commerce & Electronic markets and Platform Mediated Networks in the course.

Growth of service marketplaces (Laumeister, 2014)

There are several marketplaces which carved out new categories of e commerce. For e.g. Fiverr has created a category of micro services. It is a global marketplace where in customers can pay as little as $5 per service or task from a swarm of freelancers (Rao, 2012). Services marketplaces like Airbnb, Uber and E-lance are each expected to process over a billion dollars’ worth of transactions in 2014. The tremendous growth of existing marketplaces and emergence of new marketplaces raises the question ‘Why are these marketplaces booming?’

The primary reason for this growth is seen to be the focus that is being laid on solving the problem of buyers which is universal and removing the barriers that existed with transaction offline (by making the transaction online). Since the problem is universal i.e. customers across the globe are facing the same problem, these solutions are scalable with minimal localisation and grow exponentially after reaching a critical number of users (due to positive network effects). The other important reasons for the tremendous growth are focus that these marketplaces place on consumer delight and obsessive compulsive nature of these businesses. For online marketplaces the most important form of publicity is through word of mouth and hence it is important for them to not just serve their customers but delight them so that they are compelled to inform their friends about the service. In fact, the customers are most attracted to a services marketplace by their belief that the company thinks about the user experience, the services being provided and the benefits to the customer in an obsessive (details and more details) and compulsive (24/7) way.

Why is it difficult to create a service marketplace?

Building a service marketplace is difficult. These models work extremely well with scale but how does one achieve scale? If you have buyers in your system but few sellers, then buyers leave yet if there are no buyers than sellers won’t join. It is this chicken and egg problem that makes it extremely difficult to kick start. Thus it is easy to see that no service marketplace can be built overnight. It in fact takes 18-36 months for majority of these marketplaces to start growing into considerable size (Wertz, 2013). So if you are building an online marketplace how do you get traction and build your buyer and seller communities?

How do you overcome this problem? (Wertz, 2013)

Wertz, in his article on Forbes, lists 5 important tips for building a marketplace. Here is a brief summary:

  1. Don’t be too quick to pivot: Unlike eCommerce or SaaS product based companies, online marketplaces take 18 months to 3 years to gain traction since you need to establish both supply and demand side communities. So stay patient.
  2. Keep the burn as low as possible: Burn rate needs to be as low as possible which gives the business enough time to flourish. Money cannot buy speed when it comes to building out a marketplace. Most marketplace businesses only need two functions early on: people building product and people building the buyer and seller communities.
  3. Tighten your focus: Marketplace businesses need to build traction in smaller verticals before expanding into bigger markets. So ideally they should start by focussing on a particular category or sector or geography based on the tye of business.
  4. Focus on your most passionate users: Great marketplaces are built from the niche to the masses. By engaging your passionate users and catering to their needs, you increase the likelihood that they will tell their friends about the experience and your marketplace can spread outward.
  5. Believe in your vision: When trying to create a new marketplace or market category, you’ve got to believe in your idea even when no one else does. However, you should continually look for small signals that you’re on the right track.

In the last section of this post, the focus is on why venture capital firms (VCs) are investing heavily in marketplaces. This is an important aspect since VCs fund most of the online marketplaces, given the time needed for gaining traction and burn rate in these marketplaces. In 2013, Simon Rothman, partner at Greylock spearheading their $100 million commitment to investing in marketplaces, mentioned he factors that VCs typically consider while investing in a marketplace:

  1. Big (10s and 100s of billions of dollars) and broken market (an experience that doesn’t work or lot of rents being absorbed by supply chain)
  2. Passionate team with an emotional connection
  3. Structure of the marketplace – it should not shift too much as it is growing. It should start at the right place.

He also mentions that in the next 5 years the number of marketplaces would be greater than the number in last 20 years combined because there are many markets which are broken and with mobile and social platforms at their apex there is an opportunity to create online marketplaces in plethora of industries.

Conclusion:

Any inefficiency (broken) in the market (in any industry) is leading to a disruptive billion dollar opportunity for online marketplace. With mobile platform and social networks growing stronger, it is easier to gain trust which is at the heart of service marketplaces. Next 5 years in the eCommerce space is likely to be dominated by online service marketplaces.

Sources:

  1. Laumeister, G., 2014. Why Online Marketplaces Are Booming [Online] Available at: http://www.forbes.com/sites/groupthink/2014/08/20/why-online-marketplaces-are-booming/ [Accessed 04 10 2014].
  2. Bellaïche, Chassaing and Kapadia, 2012. Secrets of Online Marketplaces [Online] Available at: https://www.bcgperspectives.com/content/articles/digital_economy_retail_secrets_of_online_marketplaces/ [Accessed 04 10 2014].
  3. Wertz, 2013. 5 Tips For Building A Two-Sided Online Marketplace [Online] Available at: http://www.forbes.com/sites/ciocentral/2013/02/07/5-tips-for-building-a-two-sided-online-marketplace/ [Accessed 04 10 2014].
  4. Rao, 2012. Task-Based Marketplace Fiverr Raises $15M From Accel And Bessemer [Online] Available at: http://techcrunch.com/2012/05/03/task-based-marketplace-fiverr-raises-15m-from-accel-and-bessemer/ [Accessed 04 10 2014].

How will you be paying in 2020?

Let me give you a quick look into my wallet. I open it and the first thing you find is a debit card. It has the Rabobank logo on it, my name and some random number. This card allows me to pay at most shops. Next to that is my ‘OV-Chipkaart’, again it has my name on it, a beautiful design and some random numbers. This card allows me to pay for my travel. Behind that one is a card from my student association. Again it features a name and some random numbers but this one allows me to buy drinks. In my wallet you can also find a printer card, a cinema card and a coffee card. I bet some of you guys have even more cards. To be honest, this annoys me. I can’t leave the house without at least bringing 4 or 5 cards with me.
This is exactly the problem the guys and girls at Coin were facing. Let me introduce you to a smart card: “Coin is a connected device that can hold and behave like the cards you already carry. Coin works with your debit cards, credit cards, gift cards, loyalty cards and membership cards. Instead of carrying several cards you carry one Coin. Multiple accounts and information all in one place.

Are you interested? Well, you’re not alone. Within just 40 minutes Coin had raised its crowdfunding target of $50.000. Their video on Youtube went viral and twitter literally exploded. Praised by many, Coin seems to have a bright future ahead. So how does it work? Although the technique is quite sophisticated, the usage for the end user is made very simple and accessible. With your personal ‘Coin’ card you also receive a scanner. Simply scan your cards that you want on your Coin and with the Bluetooth technology build in the scanner and card, your cards information will be transferred on your Coin card. Coin also offers an App for your phone to connect to your card. This offers possibilities to manage, transfer or delete your cards from Coin. Another smart feature is the tracker. If Coin gets too far away from your phone you get a notification warning you about possible danger. Is your card stolen? Simply erase all data.

Although this sounds like an awesome gadget, not all is going well for Coin. First of all, you can’t actually buy it yet. The initial launch somewhere in 2014 has been delayed multiple times and at the moment of writing the release has been delayed again until spring of 2015. Skeptics are doubtful about this release date too, and predict an even later release. Plus, this technology might be arriving a bit too late. Having all your cards into 1 sounds great, but who needs cards in 2020? More and more companies are working on payment through phone, totally removing the need of a physical card. So even with its initial success, Coin’s future might not be as bright as thought.

Sources:

Coin delays product launch, 22-08-2014, http://www.cnet.com/news/coin-delays-product-launch-until-spring-2015-as-questions-remain/

The Only Coin You Need To Replace All Your Cards,  02-12-2013,http://startups.fm/2013/12/02/the-only-coin-you-need-to-replace-all-your-cards.html

General information Onlycoin https://onlycoin.com/support/faq/

Rabobank and W3C Work together for an open online payment standard, 16-10-2014, http://tweakers.net/nieuws/99091/rabobank-en-w3c-werken-aan-open-standaard-voor-online-betalingen.html

Digital transformation project: IBM HR department (group 11)

This report focuses on the IT strategy of the HR department of IBM. IBM has about 350,000 employees worldwide and 3,658 employees are situated in the Netherlands. In a company this size, the HR department is of great importance for optimal business practices. HR is an independent entity within IBM, which reports to the worldwide organization based in the US. The Dutch HR department receives guidelines from the global HR department in the US, which should be implemented locally. Therefore, the HR department in the Netherlands performs mostly an executive role. The HR department of IBM strives for data-driven decision making. At IBM, the implementation of IT in the HR department is in an advanced stage. Various tools are used and large amounts of data regarding employees are gathered.

However, parts of the information in these data are still hidden, because of lack in data analysis. This lack is caused by two factors. First, the existing tools are appropriate for data storage and sharing, but are not usable for analysis and subsequent actions. Secondly, human capital is missing in the form of HR employees who have the needed capabilities to perform and act on the data analysis.

In order to address IBM´s current business problem within the HR department, an HR analytics solution is recommended to be implemented within the IBM HR department. It is suggested that IBM’s HR department chooses the HR analytics service provided by IBM itself, since IBM provides an easy-to-operate end-to-end solution and the product is designed on the basis of values and beliefs of IBM.

This IBM HR Analytics solution enables the HR department to gather employee data in a structured manner and most importantly, it allows the department to analyze this data. With the obtained information, HR can compose tangible action points and goals. The information can provide insights in what is currently happening in the workplace and what can happen in the future. Research has shown that the implementation of HR analytics solutions can result in increased employee satisfaction and performance and reduced employee absenteeism and turnover rates. Furthermore, this solution can help the IBM HR department to more effectively recruit and attract new employees that best suit the organization. IBM HR Analytics can aid in identifying employee (personal) characteristics needed and can ultimately result in happier employees who better fit their job.

With the implementation of IBM’s HR Analytics, numerous risks are involved and will determine the success of the implementation. These risks concern employee privacy and compliancy issues, ethical questions and the usability of the performed analyses. Finally, the use of analytics can ultimately lead to the reduced need of HR staff. This can result in reduced motivation and engagement of HR employees, since they might fear losing their jobs to the new system.

IBM HR Analytics is the most feasible option for the IBM HR department to implement. First, it is financially feasible since it represents an ROI of 2.18. Second, it is technically feasible, as the old and new systems are easy to integrate, internal IT consultants are available and no fundamental architectural changes are required. Finally, the solution is operationally feasible if two conditions apply. First of all, employees who can work with the software and translate results into actions are required. Secondly, the HR department should even more focus on data-driven decision making.

When implemented, the IBM HR Analytics solution is expected to be in full operational use after two years, assuming that systems will be synchronized and employees will be able to perform data analyses and use the obtained information accordingly.

Will Tinder change how people find love in India?

20140906050022!Tinder_logo

Tinder is an online dating app that allows you to set up a profile and put a brief description about yourself. Then you can start and look at pictures of woman or men and say whether you find them attractive or not. If so you just send a heart and if they like you back and send a heart back you have a match and from there on you can start chatting with each other.

It can be harder than it looks and definitely not something to begin with if you don’t have a thick skin. Imagine giving 50 hearts and not even receiving 1 heart back, this is especially the case for men. The funny thing is also that you send hearts what stands for love.. But actually chances of finding real love are minimal, it’s more likely to find someone for a one-night stand or just a date, because you are just choosing based on looks and nothing more. The brief description can’t be enough for someone to put something interesting on.

Now we go back to India and the rising Tinder use. In India 90% of the marriages are arranged and this is especially the case in the rural areas. In the big cities like New-Delhi the concept of dating marriage and sex is changing. Tinder is the app that is part of this change. It only arrived in India a year ago and already grows with an astonishing  1% a day.

In a country like India it’s not surprising that a lot of people live a double life. We have the parents that are basically arranging everything for their kids but that doesn’t mean that people aren’t hooking up or don’t have one-night stands. This app leaves your options open even though your parents are arranging a marriage for you.

The days that we bumped on to someone on the train station and fell in love are gone. The real life interactions are decreasing with more apps like Tinder on the market.

Do you guys think that a country like India needs something like Tinder? Or what are your own experiences with Tinder? Have you found real love?

References:
http://money.cnn.com/2014/10/15/technology/tinder-india/index.html


How Private and safe is Snapchat?

What is Snapchat and what makes it so popular among teens?
It’s really simple you take a picture and write a message and send the picture to a friend. What makes it so popular for teenagers is that you could pick how long the message will appear.  Once your friend gets the message they hold the button to view the message after which it disappears. It’s also possible with Snapchat to send texts, photos and videos. The text messages sent could be saved by both parties by clicking on it.

They offer a false sense of privacy, promising that they erase the photos.
The ugly truth however is that at the moment there are many apps that offer users to save incoming snaps. Amongst the most popular ones are apps like Snapchat saver, SnapCrack and SnapSave who all have the same functionalities of saving photos, videos and stories.

We could say that because of these unsafe third-party apps Snapchat is also unsafe, because these apps are exactly the contrary of what Snapchat is all about.

According to business insider one of these third party apps was hacked lately and the hackers claim that they have at least 100.000 Snapchat photos which include nude photos of underage kids. The collection photos that include photos of child pornography might be released very soon by the hackers.

Even though the app itself had some flaws before like people that could just take a print screen of the sender’s photo or the possibility of taking a photo of the snap with another mobile phone. With the hack of these third party apps there is another flaw revealed that questions the company’s commitment to security.

First of all if Snapchat did enough to protect its software it wouldn’t be so easy for other parties to hack the platform and offer these services like saving snaps. Secondly with the existence of these apps in the apple and google store they haven’t yet convinced them to keep the third party hacks out of the stores. That says enough doesn’t it?

What do you guys think of Snapchat and their privacy?
References:

http://money.cnn.com/2014/10/10/technology/mobile/snapchat-not-private/index.html
http://www.businessinsider.com/snapchat-hacked-the-snappening-2014-10
http://www.1mtb.com/top-5-best-apps-to-save-download-snapchat-photos-videos-stories-ios-android/

Tech firms and health concerns

Why are Google an Apple suddenly so concerned with our health. With iOS8 Apple wants to connect with peoples physique with the so called Health-app. In this Health-app people can fill in their body mass index, how much they work out, what they eat, how much sleep they will get. And when this isn’t enough even a Medical ID can be made within the application. Google just announced they are going to digitally connect patients with doctors. When people search for medical ailments on Google will get a suggestion for a video call with an actual doctor. And when this isn’t enough Google and Apple are even working together at Calico, a health company which is trying to come up with innovative solutions to the current age problems.

healthblog

These are just examples of the two major players in the business, but why are these companies so interested in our health? Or is it because the society, including me, is suddenly obsessed with being healthy and in shape? I think it is fair to say that on one hand Apple and Google are really concerned about people’s health. Especially in the United States where more than two-thirds of the adults are overweight or obese, Corporate Social Responsibility in health issues should be major thing for them (Ogden et al., 2014). It could also be turned around. When people are really more concerned about their health, Apple and Google should off course give in to that demand and come up with new apps, like discussed before and new hardware, for example smartphones with pedometers and smartwatches with heart rate and blood pressure monitors.

 

Source: Ogden C. L., Carroll, M. D., Kit, B.K., & Flegal K. M. (2014). Prevalence of childhood and adult obesity in the United States, 2011-2012. Journal of the American Medical Association, 311(8), 806-814.

Should Disney buy Nike FuelBand?

Since a while now,  Disney has implemented MagicBands in their theme parks in Florida. The MagicBands enables users to get into parks, open their hotel rooms, pay their drinks and foods and use the Fastpass lines they subscribed for. They increase the theme park experience and make a trip to a Disney Theme Park easier for the customers.

The MagicBands are simply RFID chips in a fashionable wristband. They are not powered by a battery, neither do they have led displays. The MagicBands solely interact with a great amount of scanners that are spread throughout the Disney parks. They can be found at for instance, the entrance, turnstiles, ride entrances and cash registers. By scanning the MagicBand at a so called touchpoint the transaction takes place. Some functions can be turned off or on through the internet however, the MagicBand itself is continuously active.

Nevertheless, the MagicBand does not provide any realtime information as for instance, the current time or personal activity. Would it be an idea for Disney to buy an idea/product that does have this, like Nike FuelBand.

Nike FuelBand is a wristband that tracks movements and has a led screen that serves as a clock. The product measures the calories you burn, the steps you have taken and the vigorousness of a day’s activities. It is an extensive fitness tracker and has a sharp design.

If Disney would buy a product like Nike Fuelband, it could give its customers a premium MagicBand experience. Guests would be able to find all the extra information the Nike Fuelband provides. They could keep track of the time, see the steps they took, see the rides they have taken, their heart rate and much more. It would make the theme park experience even more complete than before. It would be a great opportunity to rescue Nike’s dying platform, however would be an evenly great opportunity for Disney’s MagicBands?

Selling through Amazon: Bad for business.

 

amazon

Amazon is a company we all know. The reason we all know Amazon is because of their enormous success. Part of that success was that Amazon is a platform that mediates a two-sided network of third party retailers and consumers. These retailers are often small businesses that use Amazon to gain access to a large audience and become visible.

It seems like a good deal. A small retailer doesn’t have to spend a lot of money on its own website and online marketing. Amazon does it for him and all he has to do is put his products on Amazons platform and ship them as the orders come in. Piece of cake. How this might seem like a smart and easy way to make money, it also comes with a dark side: Many small retailers feel exploited by Amazon and often have trouble generating any profit at all.

The first big disadvantage of selling items through Amazon is that Amazon takes a fee for every product that it sold. This fee consists of a referral fee and a closing fee that are variable and a fixed fee of $0.99 per product (Amazon.com, 2014). This means that, especially for cheaper products, the fee directly cuts a large part of the profit margin and sometimes even turns a profit into a loss.

One would have to sell its products at higher prices in order to cover for the fees that have to be paid. This is, however, easier said than done and this brings us to the second disadvantage: Companies hardly have any brand recognition (Power, S. 2013). If someone asks you where you bought your book, you’ll say “Through Amazon”, instead of the third party reseller where the book actually comes from. This makes it difficult for the seller to differentiate on anything other than price.

On Amazon, the competition between third party resellers can be fierce, but as a retailer you could even be competing with yourself. When you sell through both your own web shop and Amazon, you have the problem that people are likely to find your Amazon shop faster than your regular shop. This is because Amazon has vast resources to invest in their SEO. Even if you would close your Amazon web shop, it would still come up in the search results with the status “Product not available” (Orsini, RO., 2012). This is disastrous for small retailers, because people visiting that page will click through to competing retailers offering substitute products.

These are just three out of many negative same-side network effects (Li, T., 2014) that small retailers face when selling on Amazon. The sad thing is that most retailers do not have a choice but to sell through Amazon. Otherwise they cannot keep up with competition. Do you think that Amazon is playing a fair game? Or are they just viciously exploiting small business owners?


Bibliography

Amazon.com (2014) Fees and Pricing, http://www.amazon.com/gp/help/customer/display.html?nodeId=1161240, 13 October 2014.

Li, T. (2014) Information Strategy Session 7: Platform Mediated Networks, [lecture to Msc Business Information Management] Erasmus Univercity Rotterdam, 13 October 2014.

Orsini R.O. (2012) How Amazon exploits small online retailers, http://www.dailydot.com/business/how-amazon-exploits-small-online-retailers/, 13 October 2014.

Power, S. (2013) Why Amazon Is Bad For (Small) Business, http://www.huffingtonpost.com/steven-power/why-amazon-is-bad-for-sma_b_3427279.html, 13 October 2014.

HTC RE camera: a GoPro for the rest of us

Four days ago, HTC introduced its own GoPro-style action camera, called the HTC RE camera. The Taiwanese brand usually focuses on smart phones only, since it has been proven before that HTC does not have much luck with selling devices apart from smartphones. Nevertheless, the company tried something completely new and decided to expand its assortment with its own camera. At the same time HTC introduced its new smartphone, the Desire Eye.

The RE camera looks like an underwater periscope. It is a waterproof camera with an IPX57 certification, HTC says it is perfect for underwater selfies. There are different accessories to attach the camera to:  a bag or clothing piece and with the standard screw-thread underneath the camera, it can also be attached to other camera-accessories.

The RE is comparable to a GoPro however, HTC focuses more on filming concerts or on parents who would like to make movies of their children. It is therefore less concentrated on adventurous and professional filming and focuses on a larger target group. They try to position the camera as a GoPro “for the rest of us”.

The camera takes a 16 megapixel photo with a 1/2.3-inch Sony CMOS sensor. The lens is a 146-degree wide-angle lens and has software stabilization for video shooting. The RE works with an app available on Android and iOS- products. The app provides an overview of all your videos and pictures captured with the camera. In addition, your phone can be used as a remote viewfinder and shutter trigger. The camera has its own storage capacity of 8GB and supports micro SD. HTC says that the camera can approximately film 1 hour and 40 minutes of full hd-video.

It seems HTC has a lot of faith in this product and hopes this gadget will be a breakthrough in their potential product portfolio. However, this will be a hard market for HTC to compete in since GoPro is starting to expand beyond the professional market as well. Will the RE ever make a chance against GoPro?

References:

http://www.nu.nl/gadgets/3898342/htc-onthult-eigen-gopro-achtige-camera-en-selfiesmartphone.html

http://www.coolest-gadgets.com/

http://techcrunch.com/2014/10/08/htc-re-camera/

Spritz: reading novels in under 90 minutes

naamloosIt sounds like a magic pill, something that is too good to be true; a technology that can learn you to read faster. Yet Spritz is anything but that. The inventors of the technology discovered that while reading you spend most time on moving your eyes across the page, to focus on the right words.

In fact, while you are reading you spend only 20 percent of your time actually recording information and you waste 80 percent controlling your eyes. Sin right? The creators of Spritz came up with a solution which eliminates the movement of the eyes. Obviously the only way to do that is centering each word in your field of vision and that’s exactly what Spritz does. So, instead of reading text on a page the text is presented by rapidly successive words, all of which are centered so that your eyes do not have to move a millimetre. Thus, you are almost 100 percent of your time working on recording information and not with the management of your eyes.

Spritz claims that each word we read imagesCAMO0T9Khas its own Optimal Recognition Point. If we process that we are able to grasp the meaning of the word much faster. Spritz highlights this Optimal Recognition Point by marking a single letter in each word red. The words are shown in a large font on your screen, showing up in quick progression at any speed you want. It has been developed for quite a while and has recently been released for portable devices which are supported by iOS and Android (Samsung Galaxy S5 and Gear 2).

Does it actually work?
People might read faster but do they also comprehend the text they are reading? Penn Schoen Berland tested “spritzing,” against traditional reading in overall reading speeds and comprehension. The study showed that even though Spritz readers are reading at a faster rate, they retained a comparable size of information as traditional readers. Although these results seem convincing a critical comment is that the research has been sponsored by Spritz.

Have you ever tried Spritz or one of the apps that uses the Spritz technology? And how did you experience it? You can try it on http://www.spritzinc.com!

Leave your comment below!

References:

http://www.spritzinc.com/faq/

http://www.prnewswire.com/news-releases/penn-schoen-berland-psb-study-finds-spritz-technology-increases-reading-speed-without-sacrificing-comprehension-273092371.html

Harry Potter and the Deathly Hollows: Which Version Do You Want?

Harry Potter 7

During the last decade, multiple generations have had a common addiction. Do you remember your excitement when a new Harry Potter book was about to be released? Those were the good old times of impatiently awaiting the release date for months, and then finishing the new volume within two days. However, which version of the books did you buy? Were you determined to obtain an adult version of the book, or a children’s version? And how much did you pay for it? Did you pay any attention to the price difference between the books?

One might wonder how it is even possible that the adult and children’s version differ in price. After all, the only differences between those versions are the covers and the fonts that are used (Difference Between, 2014). More specifically, the children’s version has a cover of colourful illustrations, whereas the adult version has a more sophisticated cover with darker colours (Difference Between, 2014). Furthermore, the font of the children’s version is larger than the adult’s version. But is this really enough to charge Harry Potter fans a different price?

The answer to this question lies in that books in general, and therefore also the Harry Potter books, are information goods. Information goods are goods that are easy to replicate, and easy to distribute (Li, 2014). A concept that is related to information goods, is the versioning of information goods. The versioning of goods, in this case books, entails that different prices are charged for essentially the same products, which is also called vertical differentiation (Bhargava & Choudhary, 2001; Li, 2014). In this case, the publisher of the Harry Potter books (Bloomsbury) offers its consumers two versions (adult and children) of the same Harry Potter book. Then, the consumers can choose themselves which of the versions satisfy their personal needs. Yet, by means of this self-selection, the publishers uncover the customers’ willingness to pay for a different version (second-degree price discrimination) (Li, 2014). Hence, the publisher can obtain valuable information about the type of customers from the Harry Potter book sales, which can then in turn be used for marketing etc.

Having read this blog, the next time when you will buy a (Harry Potter) book, you will be aware of the business tactics that underlie the book assortment.

Bibliography:

Bhargava, H., Choudhary, V. (2001). ‘Information Goods and Vertical Differentiation’. Journal of Management Information Systems. Volume 18, Number 2, pp. 89-106.

Difference Between. (2014). ‘Difference Between Harry Potter Series for Kids and Adults’. Difference Between. Available from: http://www.differencebetween.net/miscellaneous/entertainment-miscellaneous/difference-between-harry-potter-series-for-kids-and-adults/
[Accessed on: 12 October 2014.]

Li, T. (2014). ‘Slides Lecture 6: Information Goods’.

Big Data and Predictive Maintenance: Fast tracking past the Trough of Disillusionment

Last week Rotterdam School of Management organized their annual “Leadership Summit”. This year’s topic was Big data – what’s in it for me? Many examples were presented on how data with high velocity, variety, and volume can bring added value to organizations. What was left somewhat uncovered was how much benefit can big data bring. What is the monetary gain of collecting, cleaning and analyzing the vast amount of data points? General Electric recently held their “Minds + Machines” event presenting their vision on how data will change organizations. They organized a customer panel to provide insights on how they have benefited from GE’s software. Interestingly, GE’s customer cases happened to almost coincide with ones that Jens-Peter Seick, Vice President Product Management and Development at Fujitsu presented on stage, but provided some additional information on how much value can be gained. Let’s take a look how these two companies are adding value to other organizations through big data.

In his presentation Jens-Peter Seick from Fujitsu explained how big data is already being used for predictive maintenance purposes. Predictive maintenance allows machinery and equipment to be maintained based on their condition instead of a time-based schedule. This allows to save on costs as maintenance is only done when it is required. The condition is monitored using sensors and data logged by information systems and is analyzed using statistical techniques to plan and predict maintenance operations. These sensors form a part of the often talked about phenomenon “Internet of Things”, or Industrial Internet as GE likes to refer to it. Mr. Seick used the example of jet airplanes collecting gigabytes of engine data to relay to maintenance personnel in order to predict fleet malfunctions and be prepared with the correct parts available. As a GE customer, AirAsia used data collected from the GE engines in their fleet to route their planes on more efficient routes saving up to $10 million in fuel costs.

Mr. Seick talked about how offshore wind farms can relay information on their condition observed by sensors. It can then be combined with weather and other external data sets to predict failure points and find the right time to send out a boat for a maintenance operation. GE provided the example of an offshore oil rig that saved 7,5 million dollars by predicting a parts failure and allowing preventative maintenance to be done. Energy company E.ON has benefited from GE’s assistance with the data gathered from its wind farms, generating 4% more power in the turbines than previously.

By saving millions for its customers, GE’s annual revenues from its big data analytics efforts already tops $1 billion and they are continuing to invest heavily into the field. In addition to GE and Fujitsu other players in the field include all the big names from IBM to Microsoft. Professor Eric van Heck mentioned the Gartner Hype Cycle in his presentation at the Summit and pointed out the position of big data on the verge of falling into the trough of disillusionment. With so much interest and added value already brought to companies I can’t see big data staying in that valley for too long.

Are there any areas you know where big data is already being used effectively?

Sources:

GE’s Customer Panel at “Minds + Machines”

Jens-Peter Seick at the RSM Leadership Summit 2014

http://www.businessweek.com/news/2014-10-09/ge-sees-1-billion-in-sales-from-industrial-internet
http://fortune.com/2014/10/10/ge-data-robotics-sensors/