Internet-Enabled Co-Production: Partnering or Competing with Customers?

The Internet is democratizing commerce by turning economic models that were based on a strict separation between providers and consumers into models where this distinction is increasingly blurred. This implies significant opportunities and challenges for organizations, particularly with respect to the role that their customers play in the generation of economic value. Are customers partners or competitors? While firms typically strive to implement business models that leverage the customers as a resource (i.e., customer co-production), models in which customers are competitors (i.e., peer production) are frequently met with attempts to co-opt these customers (i.e., hybrid co-production). The purpose of this panel, presented at the 2006 International Conference on Information Systems, is to explore the range of Internet-enabled co-production models (i.e., customer and hybrid co-production) and the opportunities and challenges that they present for firms

Letters from the War of Ecosystems – An Analysis of Independent Software Vendors in Mobile Application Marketplaces

The recent emergence of a new generation of mobile application marketplaces has changed the business in the mobile ecosystems. The marketplaces have gathered over a million applications by hundreds of thousands of application developers and publishers. Thus, software ecosystems—consisting of developers, consumers and the orchestrator—have emerged as a part of the mobile ecosystem. This dissertation addresses the new challenges faced by mobile application developers in the new ecosystems through empirical methods. By using the theories of two-sided markets and business ecosystems as the basis, the thesis assesses monetization and value creation in the market as well as the impact of electronic Word-of-Mouth (eWOM) and developer multihoming— i. e. contributing for more than one platform—in the ecosystems. The data for the study was collected with web crawling from the three biggest marketplaces: Apple App Store, Google Play and Windows Phone Store. The dissertation consists of six individual articles. The results of the studies show a gap in monetization among the studied applications, while a majority of applications are produced by small or micro-enterprises. The study finds only weak support for the impact of eWOM on the sales of an application in the studied ecosystem. Finally, the study reveals a clear difference in the multi-homing rates between the top application developers and the rest. This has, as discussed in the thesis, an impact on the future market analyses—it seems that the smart device market can sustain several parallel application marketplaces.Muutama vuosi sitten julkistetut uuden sukupolven mobiilisovellusten kauppapaikat ovat muuttaneet mobiiliekosysteemien liiketoimintadynamiikkaa. Nämä uudet markkinapaikat ovat jo onnistuneet houkuttelemaan yli miljoona sovellusta sadoilta tuhansilta ohjelmistokehittäjiltä. Nämä kehittäjät yhdessä markkinapaikan organisoijan sekä loppukäyttäjien kanssa ovat muodostaneet ohjelmistoekosysteemin osaksi laajempaa mobiiliekosysteemiä. Tässä väitöskirjassa tarkastellaan mobiilisovellusten kehittäjien uudenlaisilla kauppapaikoilla kohtaamia haasteita empiiristen tutkimusmenetelmien kautta. Väitöskirjassa arvioidaan sovellusten monetisaatiota ja arvonluontia sekä verkon asiakasarviointien (engl. electronicWord-of-Mouth, eWOM) ja kehittäjien moniliittymisen (engl. multi-homing) — kehittäjä on sitoutunut useammalle kuin yhdelle ekosysteemille — vaikutuksia ekosysteemissä. Työn teoreettinen tausta rakentuu kaksipuolisten markkinapaikkojen ja liiketoimintaekosysteemien päälle. Tutkimuksen aineisto on kerätty kolmelta suurimmalta mobiilisovellusmarkkinapaikalta: Apple App Storesta, Google Playstä ja Windows Phone Storesta. Tämä artikkeliväitöskirja koostuu kuudesta itsenäisestä tutkimuskäsikirjoituksesta. Artikkelien tulokset osoittavat puutteita monetisaatiossa tutkittujen sovellusten joukossa. Merkittävä osa tarkastelluista sovelluksista on pienten yritysten tai yksittäisten kehittäjien julkaisemia. Tutkimuksessa löydettiin vain heikkoa tukea eWOM:in positiiviselle vaikutukselle sovellusten myyntimäärissä. Työssä myös osoitetaan merkittävä ero menestyneimpien sovelluskehittäjien sekä muiden kehittäjien moniliittymiskäyttäytymisen välillä. Tällä havainnolla on merkitystä tuleville markkina-analyyseille ja sen vaikutuksia on käsitelty työssä. Tulokset esimerkiksi viittaavat siihen, että markkinat pystyisivät ylläpitämään useita kilpailevia kauppapaikkoja.Siirretty Doriast

Integration of On-Premises and Cloud-Based Software: The Product Bundling Perspective

Firms in the cloud-computing era are facing the critical issue of integrating on-premises software and cloud-based software services. To date, the software industry has designed two different types of integration methods—an enterprise service bus (ESB) and an integration platform as a service (iPaaS). However, there are conflicting views on when and how to use these different integration methods to fulfill integration needs. This study aims to resolve this confusion through economic modeling. By focusing on the indirect network effect and following a two-product bundling framework, we establish a stylized model to investigate optimal pricing and bundling decisions and the best integration choice. Our findings contradict common perceptions that an iPaaS is the better choice for integration and show that firms can derive higher value by adopting ESB to integrate on-premises software and cloud-based software services. Conceptually, given that the overall network value received from a cloud-based software service is higher, the use of ESB can contribute toward significantly improving the total value of the two software applications. We also find that unbundling is the best marketing strategy for firms because software integration can improve the valuation of individual software. Our findings have important implications for software vendors. They suggest that vendors can leverage a higher network value from the software service by integrating it with on-premises software applications through ESB rather than iPaaS and eventually realize higher profits by extracting more value from consumers. Since integration increases the value of individual products, vendors should sell them separately instead of offering them as a bundle

Marketing Plan for A High Performance XML Processing Technology

A venture founded by Dr. Robert D. Cameron endeavours to offer a software product, which optimizes the processing performance of the Extensible Markup Language (XML). The objective of this proposed research is to provide a comprehensive analysis of the market opportunities for this venture. This plan seeks to identify the optimal market niche, profile potential customers, analyse the decision/purchase process, gather market requirements, and provide demand estimation. Moreover, this analysis identifies suitable target segments and defines the appropriate product position to achieve differential advantage. The highlight of this plan is the exploitation of market opportunities, which enable rapid commercialization and provide substantial positive financial impact. These opportunities are attainable through a proactive approach to licensing technology, teaming-up with technology providers, and partnering with reputable local and regional technology suppliers to reduce competition, improve pricing, and reduce risks. This plan includes a competitor and business risk analysis to mitigate and reallocate risk

The role of customer experience in technology strategy : implications for product adoption in information technology

Thesis (S.M. in Engineering and Management)--Massachusetts Institute of Technology, Engineering Systems Division, System Design and Management Program, 2011.Cataloged from PDF version of thesis.Includes bibliographical references (p. 104-105).This research identifies and describes the impact of customer experience on the adoption of information technology products. The research findings are applied to the business case of a global technology firm entering into in the cloud computing space. We chose a customer-centric lens in order to better understand how information technology is turned into value for the customer. We complemented well-defined industry-level models of technology adoption by building an original system dynamics model of the relationships of the technology firm with its enterprise customers. Important dynamics were derived from the review and analysis of selected leading edge managerial frameworks that were best suited for the studied business. The market analysis includes interviews with potential enterprise and small business cloud customers, market analysts, and executives at several companies selling cloud computing services. At the firm level, we modeled the effect of different product launch and development strategies and the impact of organizational learning on new business development. The system dynamics model is a management flight simulator that overcomes the limitations of classical management frameworks. The model was calibrated against historical product adoption data that was provided by a leading global information service provider. By running different scenarios, managers may simulate the impact of investments in research and development and marketing. Managers may also test the implications of successfully designing a positive customer experience and of adopting a culture of continuous improvement and business experimentation. The results of this study show that in order to survive and compete in the digital economy, information technology companies need to shed a comfortable yet myopic focus on technology advantage and acquire the capability to develop and execute business strategies focused on excellent and inimitable customer experience. The willingness to experiment and ability to learn are critical success factors. Sustainable competitive advantage also hinges on having the ability to run business experiments, fail, learn from failures and effectively spread that knowledge through the organization.by Mona Masghati Vernon.S.M.in Engineering and Managemen

An exploration of the diffusion dynamics of Open Source Software (OSS): An Agent-Based Computational Economics (ACE) approach

Despite the rising popularity of Open Source Software (OSS), there is limited understanding of the factors that affect the diffusion of OSS at the organizational level. Review of the literature suggests that previous empirical and analytical studies on this subject matter though valuable in their own respect, either did not address the full spectrum of critical factors in one model or did not investigate the impact of critical factors in enough detail leaving some gaps in the literature. In an effort to bridge these gaps, this dissertation develops a model to a) jointly investigate the effect of critical variables other than price on the diffusion dynamics of OSS, b) investigate the effects of social networks or inter-organizational relationships on the diffusion dynamics of OSS, c) propose a new software price discounting scheme and compare its effectiveness against traditional software price discounting schemes on the diffusion dynamics of OSS. An Agent-Based Computational Economics (ACE) approach is adopted to develop a comprehensive simulation model to investigate the aforementioned research problems. Although, desktop operating system software is used as an exemplar to investigate the diffusion of its open source and proprietary alternatives, the framework proposed in the dissertation is general enough to be applied in the investigation of diffusion of other kinds of software as well

Electronic word of mouth in online social networks: strategies for coping with opportunities and challenges

In today's world, the widespread success of the Internet, social media, and online social networks (OSN) provide the basis for electronic word of mouth (EWOM). EWOM can be seen as a digital enhancement of traditional word of mouth that makes communication more efficient and involves less effort by its users. The resulting speed of diffusion and information transparency have caused transformative changes in consumer behaviour in all types of markets, which requires the development of new business strategies for adequately dealing with the new circumstances. This doctoral dissertation is divided into three overall subject areas that concern the investigation of capable strategies for coping with the emerged opportunities and challenges of EWOM in OSN. The first subject area concerns negative electronic word of mouth in OSN and investigates capable countermeasure strategies for firms to adequately address claims of unsatisfied customers. For this, three simulation studies are conducted in which the propagation of a negative message and its countering by a positive message published by the firm are numerically analysed. The results reveal that, in general, the persuasiveness of a firm's response is more important than a quick response with a less persuasive counter-message. To some extent, this also holds if the number of OSN members who initially disseminate the counter-message on behalf of the firm is increased. In the second subject area, an optimisation model for individualised pricing is developed for an online store whose customers are interconnected in an OSN and can share price information via EWOM. The model is solved numerically by artificial intelligence solution methods. The results indicate that personalised prices can be financially worthwhile even under price transparency. The third subject area investigates market entry strategies for social media apps and services that are advertised in an OSN for acquiring new users and examines the role of EWOM in this context. A diffusion model is developed and analysed numerically by simulation. Three different targeting approaches are compared to each other regarding their ability to reach a high share of active users in the OSN: (1) a random marketing strategy, where randomly chosen members in the OSN are presented the advertisement, (2) cluster marketing, where whole clusters of members who are densely connected to each other are simultaneously shown the advertisement, and (3) influencer marketing, where the most influential users in the OSN are selected to share sponsored posts about the app in the OSN. The results suggest that EWOM can have detrimental effects if OSN members are too early informed about the app or service. If the information about the app reaches clusters in the OSN prematurely where a sufficient level of activity is not present yet, it can deplete the excitement of the users. The lack of excitement, in turn, can significantly reduce the effect of subsequent marketing campaigns. However, if applied appropriately, a higher level of EWOM about the app or service can increase the performance of the random marketing strategy to the extent that it outperforms cluster and influencer marketing

Why the iPhone Won't Last Forever and What the Government Should Do to Promote its Successor

Because of the overwhelming, positive response to the iPhone as compared to other smart phones, exclusive agreements between handset makers and wireless carriers have come under increasing scrutiny by regulators and lawmakers. In this paper, we document the myriad revolutions that have occurred in the mobile handset market over the past twenty years. Although casual observers have often claimed that a particular innovation was here to stay, they commonly are proven wrong by unforeseen developments in this fast-changing marketplace. We argue that exclusive agreements can play an important role in helping to ensure that another must-have device will soon come along that will supplant the iPhone, and generate large benefits for consumers. These agreements, which encourage risk taking, increase choice, and frequently lower prices, should be applauded by the government. In contrast, government regulation that would require forced sharing of a successful break-through technology is likely to stifle innovation and hurt consumer welfare.