Category: Digital Business

Is a world without ads nirvana?

Posted by MIT Sloan Executive Education - 25 days ago

In October, Apple announced approval of a new application, Been Choice, into the iTunes App Store. The app blocked advertisements in mobile applications as well as in native apps. Shortly thereafter, Apple pulled the app due the potential risk of security breaches. However, the promise of an app that blocks ads in both Safari and in native mobile apps had consumers cheering. After all, who really likes ads interrupting their online browsing, shopping, or reading experiences?

Sinan Aral, Associate Professor of Information Technology and Marketing at MIT Sloan, was recently a featured guest on NPR's OnPoint with Tom Ashbrook, where Ashbrook, Aral and Rebecca Lieb, a research analyst and author, discussed ad blockers and the future of digital advertising.

"I get annoyed by ads, just like other people," commented Aral. "Most people would consider a world without ads to be nirvana. But the bigger question is how to go forward."

As Aral explains, ads pay for the content we all consume on the Internet. When new technologies enable us to block ads, it means that advertisers and content producers need to think about how to pay for the content available today. As many publishers have learned, most consumers are unwilling to pay for content placed behind paywalls. As much as we’d like to think of the Internet as free, the fact is, someone has to pay for the quality content available online

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Who will power the IoT economy?

Posted by MIT Sloan Executive Education - 1 month and 13 days ago

By Peter Hirst, Associate Dean, MIT Sloan Executive Education

IoT smaller

From driverless cars and sensor-laden industrial equipment to connected kitchens and smart cities---the Internet of Things (IoT) is cropping up everywhere, or so it seems. Recognizing the tremendous economic potential, tech giants and startups are investing heavily in IoT products and platforms. A recent report estimates that "the IoT will result in $1.7 trillion in value added to the global economy in 2019." Yet many employers are struggling to find the talent to propel the rapidly developing IoT economy towards the full extent of its promised value.

At last year's Internet of Things Word Forum in Chicago, Jeanne Beliveau-Dunn, Vice President and General Manager of Cisco Services, presented startling findings based on data from CareerBuilder, IBSG, and the U.S. Bureau of Labor Statistics:

  • One-million shortage of qualified workers in the Internet security industry in the next five years
  • Two million jobs needed in information technology and communications in the next ten years
  • Over 11 million people unemployed in the United States at that time
  • 45% of employers unable to find qualified candidates for open jobs

 As of this August 2015, the number of unemployed people in the U.S. dropped to 8 million. However, according to the U.S. Bureau of Labor Statistics, job growth came primarily from healthcare, social assistance, and financial services sectors--not technology companies.

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Are you a digital or analog leader?

Posted by MIT Sloan Executive Education - 3 months and 12 days ago

As digital technology reaches into every corner of the business world, the rules are changing. Digital has reshaped the expectations of customers and changed way teams collaborate. Digital platforms have given rise to companies like Uber and Airbnb, and other new business models are just around the corner

George Westerman, Research Scientist at the MIT Center for Digital Business, refers to companies that are using digital for a strategic advantage as Digital Masters (see our previous post on the topic). "Digital masters differ not only in their capability but in their clarity of vision," writes Westerman in a recent article in MIT Sloan Management Review.  Rather than incrementally adjusting current practices, they search for ways to use today's fast-moving technologies to transform the way they do business. And it’s worth it--Westerman's research shows that digital masters are 26% more profitable than their industry competitors 

Leading Digital

Of course, Digital Mastery begins with people. More specifically, it begins with senior leaders. Among the hundreds of companies Westerman studied for his recent book, Leading Digital: Turning Technology into Business Transformation, co-authored by Didier Bonnet and Andrew McAfee, none created true digital transformation (of the entire company) from the bottom up. According to Westerman, digital vision from senior executives is pivotal in driving change than spans all boundaries of the company.

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So you want to be the next Uber?

Posted by MIT Sloan Executive Education - 4 months and 16 days ago

Using mobile app

One can only imagine the sheer volume of pitches angel and VC investors get today that start with, "We'll be the next Uber…" or "We'll be the Uber of X industry." Uber has become a generic term for a highly visible, seemingly successful disruptive business. It is a perfect example of a successful platform company.

As we wrote a few weeks ago in Why platforms beat products every time, 14 of the top 30 global brands by market capitalization in 2013 were platform-oriented companies. Both established companies and startups are flocking to the platform business model. But as participants in the recent MIT Sloan Executive Education program Platform Strategy: Building and Thriving in a Vibrant Ecosystem learned, creating a successful platform is much more complicated than simply connecting two parties and collecting the revenue. (In the case of Uber, the two parties are people with cars sitting idle and people who need rides from one place to another.)

What makes a platform a platform?

 "Just because something is called a platform, doesn’t make it a platform from a business perspective," says Catherine Tucker, Associate Professor of Marketing at MIT Sloan. “A platform business must have network effects--people value it more highly the more others use it." The easiest way to think of the network effect of a platform is to consider Skype or the fax machine--they’re only valuable if many people are using them.

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Bringing spice to platforms--literally

Posted by MIT Sloan Executive Education - 5 months and 7 days ago

spices square

As a panel discussed during the MIT Sloan CIO Symposium this year, platform strategies are beginning to displace product strategies. Two of the three panelists came from newer businesses--Paddy Srinivasan, Vice President of Products for Xively, and Bryan Kirschner, Director of the Apigee Institute. Xively works with companies to build applications for the Internet of Things (IoT) and the Apigee Institute is a research and strategy organization that helps businesses succeed in the new digital world. The panel was moderated by Professor Marshall Van Alstyne, Research Associate with the MIT Initiative on the Digital Economy.

The third panelist, Jerry Wolfe, founder and CEO of Vivanda, has come to the platform business from a most unusual route; he was previously the first CIO at McCormick & Company. Yes, that McCormick--the spice company founded in 1889. After significant analysis of the current grocery store product ecosystem, Wolfe led an initiative at McCormick to develop FlavorPrint, an API-enabled, predictive food personalization platform.

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Why platforms beat products every time

Posted by MIT Sloan Executive Education - 5 months and 21 days ago


Is the product business model broken? According to Professor Marshall Van Alstyne, Research Associate with the MIT Initiative on the Digital Economy, and moderator of the MIT Sloan CIO Symposium panel, "Platform Shift: How New Business Models are Changing the Shape of Industry and the Role of CIOs," the answer is definitely yes

Case in point: BlackBerry. While there remain some holdouts relying on their BlackBerrys, the numbers don't lie: in 2009, BlackBerry had nearly 50% market share in U.S. operating systems, and now the company has 2.1% market share.

On the other hand, in 2013, 14 of the top 30 global brands by market capitalization were platform-oriented companies. These are companies that have created and now dominate areas in which buyers, sellers, and third parties are connected. In addition to the platform-oriented brands listed in the chart below, standout platform companies include Uber and Airbnb. They've each created innovative and disruptive business models that have drastically changed how consumers (and now businesses) secure transportation and lodging. (Read our previous posts related to Uber and Airbnb.)

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Is reuse part of your digital strategy?

Posted by MIT Sloan Executive Education - 6 months and 11 days ago

When most think of digital strategy, assets, and IT work, they think of efforts to develop new and innovative technology, systems, and processes. The focus is on how to build something completely new, or how to get rid of what already exists for something better. As a result, a new project can be compared to cooking from scratch. The end dish is includes a variety of ingredients, none of which were pre-made. It's an entirely new effort.

With that concept in mind, why do technologists and IT departments approach everything from scratch? Why has the idea of digital reuse not bubbled to the surface more? After all, as the illustration above shows, sometimes building on the work of others is a much more efficient approach to a project.

Peter Weill, Senior Research Scientist at MIT Sloan, and his partners, fellow MIT Sloan Research Scientist Dr. Stephanie L. Warner and Dr. Mark McDonald, Group Vice President at Gartner Executive Programs, designed a study to measure the effect of digital reuse strategies across 1551 firms in over 77 countries. The respondents were enterprise CIOs, business unit CIOs, and senior-most IT executives. In a research article published in the European Business Review, Weill, Warner, and McDonald revealed their findings. 

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Authors of Leading Digital share how leadership and vision drive digital transformation

Posted by MIT Sloan Executive Education - 10 months and 10 days ago

While young and eager employees are often credited with moving innovation at their companies, research shows that true technological transformation—such as those achieved by "Digital Masters"—must come from the top down.

For their new book Leading Digital: Turning Technology into Business Transformation, authors Andrew McAfeeGeorge Westerman, and Didier Bonnet, spent years researching companies they call “digital masters:” organizations that were not born digital, but have leveraged digital technologies to drive new levels of productivity, profit and efficiency.

In this video, posted to MIT Sloan Reviews, the authors explain that Digital Masters "excel in two critical dimensions: the what of technology and the how of leading change."

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