winning in networks
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Discussion slides used at the Insights 2010 @ Boston University.TRANSCRIPT
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
2Overview
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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
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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
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Processes designed for the global All-IP infrastructure
Next-generationprocesses
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….and service delivery…
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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
Source: Morgan Stanley
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…unleashing ‘apps’ at an unprecedented rate
Source: Morgan Stanley
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…With iPad setting a record..
Source: Morgan Stanley
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…Pervasiveness of IT.. (everywhere)
Source: Morgan Stanley
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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’
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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….
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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
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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 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