Transcript summary - Homepages | The University of Aberdeen

Business Models
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• A method of doing business by which a
company can generate revenue to
sustain itself.
Name your price – priceline.com
Find the best price – hotwire.com
Dynamic brokering – getthere.com
Affiliate marketing – amazon.com
Electronic tendering systems – gxs.com
Online auctions – ebay.com
Customization and personalization – dell.com
Electronic marketplaces and exchanges – e-steel.com
Supply chain improvers – productbank.com.au
Collaborative commerce
• Where is the company positioned in the value
chain?
Rappa’s Business Models
• http://www.digitalenterprise.org/models/models.h
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–Brokerage – exchange, trading community, aggregator
–Advertising – portals, sponsorship banners
–Infomediary
• Recommender - users provide recommendations on products, e.g.
http://www.epinions.com
• Registration - session tracking of users, allows greater targeting of advertising,
e.g. http://www.nytimes.com
–Merchant - retail
–Manufacturer – eliminate middleman
–Affiliate – online referrals for commission
–Community – voluntary contributors, regular visitors
–Subscription – high value content
• Many companies changed to subscription models in last two years
–Utility – pay by byte
Digital Economy
aka Internet economy, new economy, Web
economy
Definition: Economy based largely on digital technologies
E-Marketplace = Marketspace
• Marketplace: 3 main objectives
– Match buyers and sellers
– Facilitate transactions
• exchange of information, goods, services, payments
– Provide institutional infrastructure
• Legal contracts, dispute resolution, enforcement
• Marketspace benefits
– Increased efficiencies
– Decreased cost of executing business functions
Impact on Business Processes
and Organisations
• Improving direct
marketing
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Product promotion
New sales channels
Direct savings
Reduced cycle time
Customer service
Corporate image
• E.g. amazon
– Customisation
• Transforming organizations
– Organization learning
– Changing nature of work
• Redefining organizations
– New product capabilities
– New business models
• Impact on manufacturing
– Virtual manufacturing
– Build-to-order
• Impact on finance & accounting
• Impact on human resources
– Online distance learning
Dell
Portals, trust sites (2 slides ago)
Prentice Hall, 2002
Click and Mortar Strategy
• Channel Conflict
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Conflict = any situation where channel members are
antagonistic due to real or perceived differences in
incentives, rewards, policies or support
• Levi’s stopped online direct sales – distributors complained
Parallel channels of distribution and marketing strategies
• e.g. car dealer network + online direct sales
• Successful Strategies
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Empower the customer - 24/7 service and information
• Store locators; Product information; Inventory levels
Speak with one voice - integrate back-end systems
• Customer gets the same information through telephone or
webpage
Leverage the channels – best of both
• Order electronically; Physical sales return
One-to-One Marketing
Build a long term association
Meeting customers cognitive needs
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Customer may have novice, intermediate or expert skill
E-loyalty—customer’s loyalty to an e-tailer
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costs Amazon $15 to acquire a new customer
costs Amazon $2 to $4 to keep an existing customer
Trust in EC
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Deterrence-based —threat of punishment
Knowledge-based —reputation
Identification-based —empathy and common values
Referrals – Viral Marketing
Personalisation…
Personalisation - Marketing Model
“Treat different customers differently”
Prentice Hall, 2002
Personalisation
• “Process of matching content, services, or
products to individuals’ preferences”
• Build profiles – N.B. Privacy Issues
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Solicit information from users
Use cookies to observe online behavior
Use data or Web mining
• Personalisation applied through
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Rule-based filtering (35<age<40  Jeep Cherokee)
Content-based filtering (based on stated favourites)
Constraint-based filtering (based on demographics)
Learning-agent technology (intelligent, e.g. from cookies)
• Collaborative filtering examples
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Predict preferences based on similarities with other
customers
Why Internet Advertisement?
1. Ads can be updated any time with a minimal cost
2. Ads reach large number of buyers all over the world,
accessed 24 hours, 365 days
3. Target is Well educated and high-income
4. Accessed primarily because of interest in the content
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Market segmentation opportunity is large
5. Web ads can be targeted at specific interest groups
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Opportunity to create one-to-one direct marketing relationship
with the consumer
6. Can measure effectiveness as never before
7. Effectively use text, audio, graphics, and animation
8. Easily combine games, entertainment, and promotions
9. Cheaper than television, newspaper, or radio ads
10. 3/4 of PC users gave up some television time for Internet
Internet Growth
Prentice Hall, 2002
Prentice Hall, 2002
Auctions
• Benefits
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Quick – especially to liquidate obsolete stock
Optimal price for seller
If seller is unsure of value
Discover buyer’s valuation
• Problems
– Fraud – see slide 7
– Reveals buyer’s valuation
– Winner’s curse
• Uses
– Coordination mechanism to establish equilibrium price
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e.g. telecomms bandwidth – automatic auctions
– Social mechanism to determine price – for rare goods
– Highly visible distribution mechanism – bargain hunters
– Component of EC system – e.g. group purchasing
Privacy Issues
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Information Privacy = The claim of individuals, groups, or
institutions to determine for themselves when, and to what extent,
information about them is communicated to others
Privacy must be balanced against the needs of society
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eliminate fraud, organised crime, tax evasion, welfare cheats, terrorists
How to collect your private information:
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Making you register on a Web site
Finding you in the Internet Directory
Electronic Surveillance – e.g. an employer
• Reading your e-mail
• Monitoring your surfing
Making your browser record information about you – Cookies
• Handy for user – website remembers you
• Potential to gather information about preferences, interests
Access information in databases
• Banks and financial institutions, Cable TV, Telephones, Employers, Schools,
Insurance companies, Online vendors
• Artists
Who does it affect?
– Lost royalties/profits
– Harder for new artists
• Record companies, movie production studios, publishers,
software houses, etc
– Lost revenues
– Increased security and legal costs
• Employees
– Redundancies due to store closures, cut-backs, etc
• Users?
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Favourite artists dropped by label
Holes in Firewall -> Computer exposed
Viruses, worms, etc
Spyware, adware
Remedies
• Lawsuits
– Recording Industry Association of
America (RIAA) issued thousands
– Similar to book curse – fear - Article
– P2P illegal file-sharing is hard to govern since no specific
laws
• BitTorrent tracker sites closure
– Some sites closed – but new ones spring up
• Media Defender
– Developed technologies where copyright owners can plant
decoy files to annoy downloaders
– Downloaders working for less than minimum wage
• Overpeer
– Discourages p2p file-sharing by using advertisements
– Provide information on where to buy the CD, movie, etc
and even provide samples
Digital Millennium Copyright Act (DMCA)
 Member states signed The World Intellectual
Property Organization (WIPO) treaty in 1996.
 Signing countries promised to implement these
treaties in law .
 So the DMCA is the American implementation of
the WIPO treaty.
 There is a European version called the European
Union Copyright Directive (EUCD). Very similar.
 The DMCA Covers many areas:
 We focus on the “Anti Circumvention”
provisions of the law.
Summary of Anti Circumvention
Provisions
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Prohibits:
The act of circumventing technological protection
systems.
Manufacture of Devices / software that allow the
circumvention of access control or copy controls.
Publishing methods to circumvent a protection
system. (e.g. publishing source code).
Allows:
Circumvention/cracking for research purposes
In certain circumstances non profit organisations
and libraries can circumvent
eHealth
“Healthcare which is supported by electronic processes”
eHealth includes:
– Electronic Medical Records: easy communication of patient data between
different healthcare professionals (GPs, specialists, care team, pharmacy)
– Telemedicine: do not require a patient and specialist in same physical
location.
– Decision support systems in healthcare
• Data can be analysed to provide alerts, reminders and real-time decision aids
– Evidence Based Medicine:
• The application of the scientific method to medical practice
• Check if diagnosis is in line with scientific research.
• Data can be kept up-to-date.
– Citizen-oriented Information Provision: for both healthy individuals and
patients
– Specialist-oriented Information Provision: best practice guidelines from
latest medical journals.
– Virtual healthcare teams: collaborate and share information on patients
through digital equipment (for transmural care).
Why is eHealth Adopted Slowly?
Integration of IT
Public Services
(Health…)
2005 - WRONG!
Business Services
(Banks)
Manufacturing
1980
1990
2000
Jean-Claude Healy
May 2000
IT as a gadget
Trojan horse: networks, …
Full Integration of IT into Business (Organisational, Legal) Re-engineering of the system
e-Science Example: Predicting Markets
– The INWA Grid project (Innovation Node: Western Australia) :
• Investigating suitability of existing Grid technologies for secure, commercial
data mining.
– The three-continent Grid:
• Edinburgh Parallel Computing Center (EPCC)
• Curtin University in Western Australia (WA)
• Chinese Academy of Sciences in Beijing.
– Data mining to predict customer trends, develop new products and better
meet customer needs.
– Samples drawn from a region + publicly available
-> build a clearer picture of regional behaviour within the economy
• But: need a distributed-aggregated approach to preserve anonymity
• Resources
– UK mortgage data + UK property data
– Australian telco data +Australian property data
– Compute power at EPCC + Curtin
• Scenario
– A bank wants to predict if home owners are likely to move house within 5
years of taking out a mortgage to buy the house
– Bank wants to use its own data and publicly available data to help improve
the prediction
e-Science Example: Simulated Biology
BioSimGrid project
– Aim: to make the results of large-scale
computer simulations of biomolecules more
accessible to the biological community.
– Simulations of the motions of proteins are a
key component in understanding how the
structure of a protein is related to its dynamic
function.
 Data distributed between University of California, San Diego and
Oxford.
 Simulations were run using different programs and protocols
 Data in very different formats.
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Software tools for interrogation and data-mining
Generic analysis tools (python), visualisation VMD
Annotation of simulation data
Readily modifiable simple example scripts
Underlying data storage structure hidden
e-Science Examples: Cancer Diagnosis
Telemedicine on the Grid
– Multi-site videoconferencing
– Real-time delivery of microscope imagery
– Communication and archiving of radiological
images
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Supports multi-disciplinary meetings for the review
of cancer diagnoses and treatment.
– Remote access to computational medical
simulations of tumours and other cancer-related
problems
– Data-mining of patient record databases
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Improved clinical decision making.
 Currently clinicians travel large distances
 Grid technology can provide access to appropriate
clinical information and images across the network.
The importance of E-Commerce
• Software Patents: NOTE: stronger than copyright;
patents the idea independent of a particular
implementation
• E-Commerce patents:
– Patents a way of selling online
– E.g. shopping cart, or financial transaction system
• The driving force of E-Commerce patents
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Proliferation of WWW
$1.4 – $3.8 billion e-commerce annual global revenue (2003)
Intellectual property most valuable asset
Technologies becoming more complex and costly to develop ->
need to patent
• E-Commerce patents estimates
– ~450 annually granted in the US since 2001
Copyleft - GNU General Public Licence
• GPL uses ‘copyleft’ ideology
– the right to run the program,
for any desired purpose.
– the right to study how the program works,
and modify it.
(source code access is a precondition)
– the right to redistribute copies.
– the right to improve the program,
and release the improvements to the public.
(source code access is a precondition)
– All derivative works must also use GPL • Enforced by copyright law
• Can be seen as viral
• Restrictive - software is often distributed under
multiple licenses
Security Problems
• Example: Denial of service (DOS) – purchases are not
made, ads are not seen
– Security and ease of use are antithetical to one another
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E.g. passwords, electronic wallets/credit card
– Security takes a back seat to market pressures
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E.g. trying to hurry the time to market
– Security systems are only as strong as their weakest points
– Security of a site depends on the security of the whole
Internet – DOS, e-mail
– Knowledge of vulnerabilities is increasing faster than it can
be combated - Hackers share secrets and write tools
– Flaws in ubiquitous applications – Outlook, Word
– Underreporting: in 1999 32%; in 2000 25% of organisations
had serious attacks reported to law enforcement
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Why might a company not report a crime?
CS5038 The Electronic Society
Lecture 13: Online Games
Lecture Outline
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What are Virtual Worlds and MMOGs
How many people are playing
Types of Games – mainly Fantasy Genre
Example: World of Warcraft (WoW)
Where do players come from?
Problems with private servers
The In-Game Economy
Linking to the real economy – how to make real money
Example: Second Life
Cheating in Games, and company responses
Gold Farming
Unresolved legal issues
Criticisms of online games – addiction problems
Non-Game virtual world uses
Hacking
• If a hacker does no damage is it a crime?
• Hackers might say:
– They’re “testing security”
– They’re following an intellectual pass-time
– They didn’t break in (security was inadequate)
• The Act says hacking is a crime
– because companies have to spend time and money
checking that no damage was done
Viruses
• Writing & distributing viruses is covered by
Section 3 of the Act (“…any act which
causes unauthorised modification…”)
• It doesn’t matter if no damage is done
• Or if the “damage” is temporary
• But this doesn’t deter virus writers!
– Aberdeen uni detects 1000’s per day
– Best defence is good anti-virus software
Limitation Clauses
• If one contracting party breaches the contract, the other
may sue for damages
– E.g. one/both parties may want to recover costs etc. based on
work done or profits lost
• Often, companies try to limit their liability:
• “Under no circumstances, and on no legal basis whether
tort, contract or otherwise, shall the licensor be liable to
you or any other person for loss or damage of any
character including, and without limiting the above,
damages for loss of goodwill, or stoppages, loss or
corruption of data or software, computer failure or
malfunction, or any and all other damages or losses…”
Non-Contractual Liability
• If software is inevitably not bug-free, the courts
may call on the “reasonable man” concept.
• E.g., if someone is hurt or money is lost, the
software provider could be held liable even if
the incident isn’t covered by the contract…
• This is usually decided by considering what is
reasonable with the “technology of the day”…
• So, if a plane crashes because the autopilot
failed, a court would be unlikely to award
damages against the software vendor unless the
s/w stopped the human pilot from taking over…
E-Government Stages
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Six stages to implementation (most governments are at stage
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Information publishing/dissemination – services available,
contact details
Two-way transactions
- Submit personal information, monetary transactions
Multipurpose portals
– in Australia: www.sa.gov.au
Portal personalisation
– must allow interfaces to be manipulated by user
Clustering of common services
– people see clusters of services rather than agencies
– reorganisation of government structure
Full integration and enterprise transformation
– full service centre personalised to customer
Addressing the Democratic Deficit
• Voter turnout has dropped
Gap Between Countries
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During 1990s, coinciding with Internet growth, the world
experienced a substantial increase in income inequality,
polarisation, poverty, social exclusion
20% of world population dispose of 86% of wealth
Overall gap in productivity, technology, income, social
benefits, living standards between developed and
developing world increased during 1990s
Environmental conditions deteriorated in terms of natural
resources and mushrooming of cities
These cities are projected to be the home of half the
population of developing countries shortly
Simultaneously increasing wealth and poverty
• Why is the Internet Widening the Divide?
Why is the Internet Widening the Divide?
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Dynamic, flexible global management systems and mobility of
resources
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Education, information, science, technology more important than ever
for value creation
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Sources of value can easily be connected (increasing value for them)
and disconnected (cutting the out of loop)
But extremely unevenly distributed
e.g. telecommunications infrastructure missing – financial and human
resources to address this are missing
Connection to global economy makes developing countries
increasingly vulnerable to financial crises
Traditional agriculture being eliminated => rural exodus overloading
overcrowded cities => ecological catastrophe
Criminal economy penetrates politics and institutions
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Destabilises societies, corrupts and disorganises states
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Large scale banditry and civil wars
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Internet increases ability of leaders in poor countries to
extract whatever is valuable in country – marginalising
unskilled masses