Study of Business Strategies in the Digital Economy

This dissertation considers two research problems that Information Technology (IT) service firms and IT-intensive products manufacturers face in the digital economy. The first essay deals with the yield management for IT service firms. Given a fixed capacity of the IT workforce within a firm, the nature of IT projects, the demand uncertainty, and the growing competition among IT vendors, IT service firms cannot avoid occasionally holding the excess workforce. We propose an analytical model which prescribes an optimal policy for yield management to manage the excess capacity of an IT vendor’s labor pool by using online reverse auction marketplaces such as Elance (www.elance.com). Our model considers an IT service firm which receives projects through two channels: a conventional procurement channel and an online auction spot market. The proposed model determines optimal online auction participation and biding (pricing) policies. The second essay considers the sequential and overlapping introduction of IT-intensive products such as software or computer components. Pricing the overlapping generations of a product line is highly correlated with the extent of innovation over generations because consumers face a “buy or wait” decision problem and the producer faces a cannibalization problem among overlapping generations. Our analytical model intends to examine the relationship between the pricing and the extent of innovation of IT-intensive goods

Towards an open cloud marketplace: vision and first steps

As one of the most promising, emerging concepts in Information Technology (IT), cloud computing is transforming how IT is consumed and managed; yielding improved cost efficiencies, and delivering flexible, on-demand scalability by reducing computing infrastructures, platforms, and services to commodities acquired and paid-for on-demand through a set of cloud providers. Today, the transition of cloud computing from a subject of research and innovation to a critical infrastructure is proceeding at an incredibly fast pace. A potentially dangerous consequence of this speedy transition to practice is the premature adoption, and ossification, of the models, technologies, and standards underlying this critical infrastructure. This state of affairs is exacerbated by the fact that innovative research on production-scale platforms is becoming the purview of a small number of public cloud providers. Specifically, the academic research communities are effectively excluded from the opportunity to contribute meaningfully to the evolution not to mention innovation and healthy mutation of cloud computing technologies. As the dependence on our society and economy on cloud computing increases, so does the realization that the academic research community cannot be shut out from contributing to the design and evolution of this critical infrastructure. In this article we provide an alternative vision that of an Open Cloud eXchange (OCX) a public cloud marketplace, where many stakeholders, rather than just a single cloud provider, participate in implementing and operating the cloud, thus creating an ecosystem that will bring the innovation of a broader community to bear on a much healthier and more efficient cloud marketplace

A Survey of the Economic Role of Software Platforms in Computer-Based Industries

Software platforms are a critical component of the computer systems underpinning leading– edge products ranging from third– generation mobile phones to video games. After describing some key economic features of computer systems and software platforms, the paper presents case studies of personal computers, video games, personal digital assistants, smart mobile phones, and digital content devices. It then compares several economic aspects of these businesses including their industry evolution, pricing structures, and degrees of integration.software platforms, hardware platforms, network effects, bundling, multi-sided markets