Winning in Networks

Winning in Networks

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

Boston University School of [email protected]

Twitter: NVenkatramanOctober 9, 2010

Insights 2010

mailto:[email protected]

2Overview

(c) N. Venkatraman [2010]

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Imagine life without……



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Towards Networked Era:A Brief History

1,920,000,000

4,900,000,000

*July 31, 2010


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

Source: Cisco


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And Facebook….

500+ million


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And.. there are tweets…

*April 8, 2010

*October 8, 2010

http://gigatweeter.com/


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From 1995 till today..

• Developments in information technology have been dramatic and significant

• Shifts in management practices have been incremental and slow

• A new generation of people (employees, citizens, consumers) growing up with technology


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Yet.. there is an alignment problem

Business Strategy

ITStrategy


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Towards Global Digital Network Era….


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Information technology is impacting products..


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Products linked on all-IP infrastructure

Towards40-50 billion

devices


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IT’s impacting next generation business processes..

video

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


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Processes designed for the global All-IP infrastructure

Next-generationprocesses


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….and service delivery…

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


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Services delivered on the All-IP infrastructure

Next-generation

services


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

Source: IBM (2005)


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Mobile internet is accelerating even faster..

Source: Morgan Stanley


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… beyond phones



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…unleashing ‘apps’ at an unprecedented rate



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…With iPad setting a record..



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…Pervasiveness of IT.. (everywhere)



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The new global digital business infrastructure….

Live

WorkPlay

Learn

Connect

Innovate

Consume

Transact


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The World is ‘Flat’ but Connected…

And…connected


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Let us introduce three technology laws


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And take them together..

“Computer”

“Connectivity”“Cloud”


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A working framework to understand how IT impacts business…

TechnologyDomain

BusinessDomain

ProcessProduct Service

Moore’sLaw

Metcalfe’sLaw

BandwidthLaw

28Overview



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Computer industry [circa 1980]

Source: Bill Gates TestimonySource: Bill Gates Testimony


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Computer industry [circa 2002]

Source: Bill Gates Testimony


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Two Key ideas…

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?– Can new entrants disrupt by introducing a new layer?

1


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Two Key ideas…

Winning requires dominating one layer but linking across other layers

– What’s your pattern of connection across layers? – How does your competition connect across layers? – Who has the advantage now? – Is this advantage defensible?

2


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Setting 2: Automotive

Automobile– “computers on wheels”


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Lines of Software Code

‘Black Box’

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


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OnStar by GM OnStar

Ford (and Microsoft): Sync


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In-Car WiFi(2010)


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MyFord Touch


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Apps in the Automobile


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Future competition linked to IT architecture


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Transformations underway in the auto sector


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Setting 3: Music Mobile Phones & ?


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Music in the analog era….


Key layers of capabilities in music (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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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?

Key layers of capabilities in music (digital era)

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

(c) N. Venkatraman [2010] 45

Network of linkages in music


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Hardware

Operating System

Applications

Content

Channel

Mobile Operators

Customer Network

Apple App Store: Extension of iTunes Store


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From iPod to iPhone

http://www.airstriptech.com/


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From iPhone to iPad

Cross-network disruption @scaleIT-enabled business advantage


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From iPad to iad


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Then there’s the TV Space… with apps

52Overview



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Opportunities & Challenges

• Pervasiveness of IT (beyond processes)

• Disruption @ Scale • Power of data and insights• Dynamic co-creation and innovation• Shifts in creation and capture of value

Strategy

@

Nexus of Networks


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In closing……

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

John M. Keynes

Winning in Networks

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