winning in networks (may 2010 version)

Network Era: Opportunities and Challenges

Professor N. Venkat VenkatramanDavid J. McGrath Jr. Professor of Management

Boston University School of [email protected]

May 10, 2010

mailto:[email protected]

2

Overview

(c) N. Venkatraman [2010]

3

Imagine life without……


(c) N. Venkatraman [2010] 4

Towards Network Era:A Brief History

1,900,000,000

4,400,000,000

*March 31, 2010


A brief history… (continued):YouTube and Hulu generate 2X traffic than the entire Internet in 2000

Source: Cisco


And there’s Facebook….

400 million active users70% outside USA100 Million access using mobile

devices50% log on in any given day500 billion minutes per month


And.. there are tweets…

*May 1, 2010

http://popacular.com/gigatweet/


Tweets seem to be purpose-driven

Link

http://www.businessinsider.com/chart-of-the-day-why-twitter-might-be-able-to-make-money-off-ads-2010-4


From 1995 till today..

• Developments in information technology have been dramatic and significant

• Shifts in management practices have been incremental and slow

• A new business infrastructure is emerging– Global– Digital– Connected


Towards Global Digital Network Era….


Information technology is impacting products..


Products linked on all-IP infrastructure

Towards40-50 billion

devices


Impacting next generation business processes..

video

http://www.senseaware.com/SA/default.html


Processes designed for the global All-IP infrastructure

Next-generationprocesses


….and service delivery…

http://www.youtube.com/watch%23v=Hqz5FmX1RPk&feature=related


Services delivered on the All-IP infrastructure

Next-generation

services


The new business infrastructure….

Live

WorkPlay

Learn

Connect

Innovate

Consume

Transact


And.. It is accelerating compared to other technologies in the past….

Source: IBM

19(c) N. Venkatraman [2010]

1. How will IT-enabled capabilities impact business sectors?

2. How should we frame strategies for the network era? ?


Sketching out the possibilities…

IBM, 2005



IBM, 2005


The World is ‘Flat’ but Connected…

And…connected


Let us introduce three technology laws


And take them together..

“Computer”

“Connectivity”“Cloud”


A working framework to understand how IT impacts business…

TechnologyDomain

BusinessDomain

ProcessProduct Service

Moore’sLaw

Metcalfe’sLaw

BandwidthLaw

32

Overview



Setting 1: Computer Industry


Computer industry [circa 1980]

Source: Bill Gates TestimonySource: Bill Gates Testimony


Computer industry [circa 2002]

Source: Bill Gates Testimony


Key ideas…

1. Vertical integration giving way to horizontal layers of specialized capabilities

– When and how do new layers emerge? When do layers disappear or morph?

– Can you disrupt an industry by introducing a new layer where you hold an advantage?

2. Winning requires dominating a layer and connecting across layers

– What’s your pattern of connections across the layers?– How do your competitors connect across the layers?


Setting 2: Automotive


GM OnStar: The Beginning…

1995

Automobile– “computers on wheels”


Lines of Software Code

‘Black Box’

http://spectrum.ieee.org/feb09/7649

Automobile– “computers on wheels”


“Cost of electronicsin cars” (~20--50%)

GM OnStar & Telematics



GM OnStar

Real-time Interactions for Safety and Convenience


• 2,600 Automatic Crash Responses• 10,400 Emergency Services• 6,000 Good Samaritan Calls• 600 Stolen Vehicle Assistance• 62,700 Remote Door Unlocks• 54,500 Remote Vehicle Diagnostics• 3.4 million OnStar Diagnostics E-mails Sent• 30,200 Roadside Assistance Calls• 961,000 Turn-by-Turn Routes Delivered• 29 million OnStar Hands-Free Calling Minutes

Monthly data as of 2008Source: OnStar

Ford (and Microsoft): Sync


In-Car WiFi(2010)


My Ford Touch @ CES 2010

Further Transformations with Alternative Energy Sources

(c) N. Venkatraman [2010] 46Source: GM

http://fastlane.gmblogs.com/archives/2009/01/re-invent_the_automobile_help_transform_the_way_we_live.html


Setting 3: Music Mobile Phones & ?

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Music in the analog era….

Hardware Turntables, cassette players, tape decks, Sony Walkman etc.

Content(music)

Albums offered by record labelsin standard formats (33-45-78 rpm; & cassette tapes)

Channel Sold in Physical outlets (general and specialty) & Mail-order Catalogs

CustomerNetwork

Albums and tapes borrowed withinfriends communities.

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Music in the digital era…..

Hardware Digital audio players

Content(music)

Major lables plus rise of independent labels posting music online

Digital Rights Management Apple Fairplay; Windows Play For Sure

Channel Sold in stores (CDs); Rise of Onlinedownloads

CustomerNetwork

P2P file sharing; personal CD burning and sharing with friends

Software MP3; itunes; Windows Media; Quicktime; Realone etc.

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Precursor to today’s

social network?


Role of iTunes in the music ecosystem

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Apple’s orchestration of the music ecosystem

ContentAvailability

iPodAdoption

ComplementorNetworks

CustomerNetworks

Direct

Indirect

Music in the network era……

Hardware Multiple network-enabled devices

Content(music)

CDS offered by major labels; rise of independent labels;

Digital Rights Management

Apple Fairplay; Windows Play For Sure:Open Mobile Alliance (OMA)

Channel Sold in stores (CDs); Online downloads;downloaded to phones; Networked streaming

CustomerNetwork

P2P file sharing; personal CD burning; social and automated recommendations

Software MP3; Apple itunes; Windows Media; Quicktime; Realone etc.

MobileOperators

Mobile network for accessing music


Network of Linkages in Music


Hardware

Operating System

Applications

Content

Channel

Mobile Operators

Customer Network

Apple App Store: Extension of iTunes Store



From iPod to iPhone: Role of iTunes and App Store

http://www.airstriptech.com/


From iPhone to iPad:Role of iTunes and App Store


Amazon versus Apple


What should Jeff Bezos do?


The Evolving Publishing Network

Device

Channel

Content

Software

‘App’

60

Overview



Winning in Networks

PortfolioOf

Products

PortfolioOf

Businesses

PortfolioOf

Capabilities

PortfolioOf

Relationships

• Firm-centric• Vertical Integration• Ownership• Inside-out

• Network-centric• Virtual Integration• Relationships• Outside-in

Can You make the shift?


In closing……

“The difficulty lies not so much in developing new ideas as in escaping from old ones.”

John M. Keynes

THANK YOU VERY MUCH

Conversation continues.. [email protected]

Twitter: NVenkatraman

mailto:[email protected]

winning in networks (may 2010 version)

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