Faculty looking to adopt the text can e-mail: [email protected] for online access, a desk copy & additional information. Also see the catalog page for “Information Systems: A Manager’s Guide to Harnessing Technology v. 3.0”
Notable highlights include a new chapter on the “Sharing Economy / Collaborative Consumption” with mini-cases on Airbnb and Uber, a section on bitcoin following the disruptive innovations material in the “Moore’s Law and Moore” chapter, strategic implications related to the challenges of mobile v desktop are covered in the Facebook chapter (along with the firm’s recent acquisitions), the security chapter includes information on the Target attack and Heartbleed security issue, updates to the Amazon chapter cover Fire TV and Fire Phone, and more. To ease the yearly transition from one version to another, most of the content remains the same in structure, concepts introduced, and topic flow. Data and examples have been updated in order to keep the text highly relevant and to improve concept illustration. Several new concepts are introduced while older examples are retired in favor of more contemporary ones. Here are some of the updates you’ll notice in the latest version of the textbook. The note below illustrates only updates, it doesn’t mention the great material that continues from prior editions.
Chapter 1 “Setting the Stage” includes refreshed data and statistics and additional examples, with the intro section reordered and updated for even more currency. The young entrepreneurs mentioned in the section “It’s Your Revolution” now include Palmer Luckey of Occulus VR, as well as mentions of Dropbox, Box, and Spotify. The Finance subsection includes information on 2013 and first-half 2014 M&A deals, notable activity (including Apple’s purchase of Beats), and a mention of computer automated trading. The “Information Systems Careers” subsection includes updated stats on the positive employment outlook for tech, and a mention of firms offering programs to encourage more women and minorities in tech careers. The “Pages Ahead” section has been updated to mention new chapters and sections, as well.
Chapter 2: “Strategy and Technology: Concepts and Frameworks for Understanding What Separates Winners from Losers” includes a new sidebar “OpenTable: Network Effects that Fill Restaurant Seats,” and mentions Priceline’s $2.6 billion purchase of the firm. The “Five Forces” section includes a discussion with data on the impact of Uber and other ride-sharing services on the taxi industry, and the service’s impact on bargaining power of suppliers (in this case, drivers). The example of Fab.com has been retired. Other key statistics and data points have been updated to the latest numbers, where appropriate.
Chapter 3: “Zara: Fast Fashion from Savvy Systems” now leads with some new color, offering background on founder Amancio Ortega’s choice of the name, “Zara”, and information that he is now the world’s third richest person (according to Forbes), passing iconic American investor Warren Buffet. More color mentions the Duchess of Cambridge, Kate Middleton, as a Zara fan. A powerful summary quote from the Inditex CEO emphasizes the firm’s data-driven production model and how this is opposite the traditional approach used in the industry. A new paragraph discusses the challenges of expansion in China and the US, as well as benefits and concerns over expanding manufacturing centers beyond Spain. Data has been updated to reflect the most recent financial and store expansion numbers, and some additional information on firm partners and production statistics.
Chapter 4: “Netflix in Two Acts: The Making of an E-Commerce Giant and the Uncertain Future of Atoms to Bits” has received a number of substantive changes. The “Long Tail” discussion has been largely moved to Amazon (appropriate given the ‘smaller’ tail of streaming, and Amazon’s focus on selection as a key component of its competitive advantage). Netflix’s more successful 2014 price increase is briefly contrasted as a learning take-away from the Qwikster debacle. HBO’s deal making a portion of its catalog available for Amazon streaming is discussed. The section on “Exclusives and Original Content” includes updated material for currency and reflecting Netflix’s recent success. Netflix appeal to content creators has also been updated, and includes a powerful sidebar call-out quote from the creator of Breaking Bad, attributing the critical Netflix role in the series’ success. A new subscriber chart shows streaming customers for Netflix, Amazon, and Hulu Plus. “The March to Global Dominance” subsection is updated to include managerial detail on legal challenges associated with global expansion, and information on the firm’s recent international success and future plans. The section “A Crowded Field of Rivals and Other Challenges” includes background on net neutrality (a hot press topic with important tech industry implications), and Netflix’s deals and battles with Comcast and Verizon. Amazon’s Fire TV is also briefly mentioned (although it is covered in depth in the Amazon chapter).
Chapter 5: “Moore’s Law and More: Fast, Cheap Computing, Disruptive Innovation, and What This Means for the Manager” also includes several updates. Most notably, a new full-section, on bitcoin titled “Bitcoin: A Disruptive Innovation for Money and More?” closes the chapter. The section offers a managerial introduction to bitcoin, trading with the bitcoin revolution official site, outlines its appeal to various constituencies and introduces challenges to acceptance. Faculty may find this is a useful way to engage the class in a discussion about a potentially disruptive innovation, and it could encourage people to look at the Zipmex cryptocurrency predictions for further insight (alongside asking questions like who would gain? Who’s threatened? What will it take to gain acceptance? Will it win – why or why not?), and what firms can do to experiment, learn more, and position themselves if bitcoin advances. Oddly enough, it doesn’t mention anything about bitcoin gambling, which is surprising given how popular sites like BestBitcoinCasino.org have become. Faculty may also wish to highlight the role of peer-production in verifying, and recording transactions using bitcoin. Ultimately, there is no denying that the popularity of cryptocurrencies such as Bitcoin has significantly changed the trading landscape. Moreover, nowadays, it is much easier for cryptocurrency traders to use apps like Bitcoin Trader to manage their trades on the basis of real-time market shifts and trends. You can learn more about Bitcoin trading by checking out this useful website that answers questions like ‘does bitcoin trader work?‘ and much more. Anyway, that being said, the chapter now also mentions that the pace of hard drive storage increase is sometimes referred to as Kryder’s Law. Several clarifying statements underscore that while the precision of price/performance curves is not lock-step consistent, general trends are vital for managerial planning and insight. Minor wording changes reflect the proliferation of flash storage in notebook PCs. Brief mentions also note iBeacon, Google Glass, smartwatches/wearables, the Intel Quark chip and smart shirt). Nest discussion includes information on Google’s acquisition of the firm, and Apple’s HomeKit. Discussion of music industry disruption now mentions streaming and the Beats acquisition. The “To Put it in Perspective” column of the storage terms is updated to include fun, current examples, such as the size of Netflix master copies of streamed movies and the NSA’s Bluffdale data center storage capacity. The “Disruptive Innovations” section includes a new sidebar “Yahoo and the Squandered Mobile Opportunity” that relates key chapter concepts to Yahoo’s catch-up position in mobile. Some of the environmental impact stats in the “E-Waste” section have been updated, and a graphic of the e-Stewards system is included.
Chapter 6: Substantial additions are also included in the chapter “Amazon.com: An Empire Stretching from Cardboard Box to Kindle to Cloud.” The section “Emperor of E-Commerce” includes a sidebar “Amazon’s Warehouse Within a Warehouse” with info on how the firm hosts operations within facilities of partners such as P&G, Kimberly Clark, and Georgia Pacific. Additional details are offered on AmazonSupply and the potential for the firm’s B2B push. More information on Amazon Prime, costs, and firm impact, is offered. Amazon’s emerging ad business now includes a discussion of retargeting, along with an image illustrating the concept in action. A new sidebar “Scale from Selection – The Long Tail” illustrates the concept of the long tail, offers a descriptive image of the concept (formerly in the Netflix chapter). The section “Acquisitions and Category Expansion: Fewer Rivals, More Markets, and More Customer Choice” includes mention and video of the Amazon Dash hand-held scanner/voice input device for grocery ordering. The section on Kindle is now titled “Kindle on Fire: the Rise of Digital, the Everywhere Store, and New Opportunities from eBook, Tablet, TV, and Phone,” given the discussion of the new Amazon Fire TV and Fire Phone offerings. The Fire Phone section offers managerial discussions of the Firefly scanning offering and how this can fuel Amazon purchases, along with the difficulty of competing with entrenched players with a high-priced, late-entrant that forks from the Android operating system. The subsection “Amazon Gets Into Content Publishing” expands on the firm’s book and video offering, and discusses Amazon’s heavy push into gaming and how this relates to Kindle Fire, Fire TV and Fire Phone platforms. Details on the Amazon v. Hachette conflict are also offered, along with customer service implications of Amazon’s tactics, potential long-term implications for anti-trust (with key share figures mentioned to illustrate industry influence). The section on Amazon Cloud Computing mentions the WorkSpaces “desktop in the cloud” offering, and new services for game developers. When available, financial and operations data was updated to the most recent fiscal year (2013) or quarter (Q1 or Q2 2014). Bezos’ personal purchase of the Washington Post, and the Amazon Prime Air drone video have been added to the sidebar: “Bezos and the Long Term.”
Chapter 7 is titled “Understanding Network Effects: Strategies for Competing in a Platform-Centric, Winner-Take-All World.” Changes include adding WhatsApp, Airbnb, and Uber to the list of illustrative examples. The Barnes and Noble Nook’s struggle vs. Kindle’s dominance is mentioned to illustrate the concept of “staying power” and influence on consumer purchase decisions. The complementary benefit and platform discussion of Apple now includes mention of the firm’s CarPlay auto platform, as well as the HealthKit, HomeKit, and CloudKit iOS extensions. WhatsApp and Uber are mentioned as examples leveraging virality to grow a service. The Gilt example includes a mention of flash sales and why mobile access is critical to time-sensitive offerings. The “alliances and partnerships” subsection mentions the MCX (Merchant Customer Exchange) payment standard backed by Walmart, BestBuy, and Target (among others). The “Anti-trust and Microsoft” sidebar includes a mention of the past year’s fine for violations, and the $2B+ Euro total Microsoft has been tagged with. The “Seed the Market” subsection references consignment site thredUp’s use of ‘credit now, cash later’ as an incentive to turn sellers into buyers and spur both sides of a two-sided market. When available, data used to illustrate examples was updated.
Chapter 8: “Social Media, Peer Production and Web 2.0” includes several new examples, especially in the intro section. Instagram, WhatsApp, StackOverflow (StackExchange), GitHub, Waze, Tinder, Secret, Whisper, and Yik Yak all merit a mention. Data on established players is thoroughly refreshed. Use of the phrase Web 2.0 is reduced throughout the chapter, reflecting industry trends and the app-centric (rather than web) nature of many efforts that fall into the social or peer production grouping. The sharing economy is mentioned in the “peer production” concept introduction, although much of the discussion is deferred to the new Chapter 9. Three new examples are offered at the bottom of the evolution from Web 1.0 to the Social / Peer-produced Internet (Web 2.0). Messaging and Q&A sites also now get their own lines in the “Major Social Media Tools” table. Mentions of LinkedIn in the “Social Networks” subsection also include an imbed of the excellent “faberNovel” presentation on the network, using SlideShare (which is also a LinkedIn-owned service). The “Social Networks and Health Care” sidebar now mentions “Solved by Sermo”, Apple’s HealthKit, and Google’s Fit. The “Twitter and the Rise of Microblogging” has had a substantial update, including info on the firm’s recent IPO. New illustrative examples in the section mention Vine video and Amazon’s #AmazonCart tweet-to-buy effort (with embedded demonstration video). A section on “Organic Reach and Advertising” contrasts Facebook’s filtering and restrictions of posts vs. Twitter’s unrestricted broadcast to all followers. The fast-spreading Oreo “You Can Still Dunk in the Dark” tweet following a SuperBowl power outage is used as an example illustrating promotions virality on Twitter. More information is offered on advertising over Twitter, including the breadth of offerings such as Amplify for video and the MoPub ad serving platform. Also covered is Twitter’s struggle to highlight impressive ad growth amid underperforming usage statistics. The Crowdsourcing subsection includes coverage of Waze, which Google acquired for $1 billion, as well as the GE/Quirky partnership that has led to the Aros air conditioner, among other innovations (illustrations offered for both). The sidebar “Tweets from the Untrained” includes several new examples (with images illustrating the gaffes) of firms that have misfired with social media messages. The section “Other Key Web 2.0 Terms and Concepts” which had mentioned things such as mashups, podcasting, folksonomies, and virtual worlds, has been eliminated in order to keep the chapter more focused, on-point, and to keep the chapter a reasonable size. Key usage stats and other data are updated throughout the chapter.
Chapter 9, “The Sharing Economy, Collaborative Consumption, and Creating More Efficient Markets Through Technology,” is entirely new. The chapter expands on peer production concepts introduced in the earlier chapter to explore the varied and emerging business models of the “Sharing Economy” and “Collaborative Consumption”. Examples are offered of citizens coming together to create or share resources across markets. The drivers and advantages of these electronic markets are introduced (inventory efficiency, increased utilization, opportunity creation, pricing advantages, promotional efficiency, enhanced trust and service, reach, fragmentation roll-up, among them), and are followed by a discussion of regulatory and other challenges. A sidebar on the service WePay illustrates leveraging social data to verify payments and enhance user experience in marketplace platforms. Efforts and partnerships involving established, traditional firms (Walgreens, W-Hotels, IBM, Condé Nast) are used to illustrate opportunities in the sharing economy that extend beyond startups. Finally, two mini-cases demonstrate the astonishing rise of Airbnb and Uber. Airbnb’s efforts to engender trust and leverage its platform for transaction verification are among concepts discussed. Uber’s use of data to drive pricing equilibrium and the firm’s sheer advantages relative to conventional taxis are illustrated.
Chapter 10, “Facebook and The Business of the Social Graph: Shifting Platforms, The Revenue Hunt, Innovation, Mistakes, and Redemption on Tech’s Advancing Frontier,” has received a new name and substantial updates, with key managerial takeaways in areas such as mobile competition and the new threat to desktop web giants. The intro section has a much tighter conclusion, more reflective of the firm’s solid growth in revenue and profits, downplaying earlier concerns about ‘monitizing mobile’. The second section is now titled “Disrupting Competition, Building Competitive Advantage, and the Challenging Rise of Mobile.” More information is offered around how Feeds operate, and restrictions placed on post reach. Two subsections contrast “Facebook’s Desktop Dominance” (winning in photos, messaging), with “Why Mobile is Different“. New managerial material illustrates how the walled-garden of desktop is being broken down by more open mobile platforms offering access to address books, cloud media, tap-to-access notifications, icon-ready awareness, and more. These concepts are then woven into discussions of the Instrgram and WhatsApp acquisitions. A subsection on the Oculus VR acquisition also discusses the platform’s potential and extends a strategy that is in part motivated by acquiring services before they can become substantive threats. The section “Advertising and Social Networks: A Work in Progress” has been substantially updated to reflect new examples and data, current performance statistics, mobile’s performance, ARPU concerns, user attention and content adjacency issues, the Facebook App Install and ad network offerings, and additional growth opportunities. The next section is titled “A Platform Player that Moves Fast and Breaks Things: What All Managers Can Learn from Facebook’s Mistakes, Responses, and Pursuit of New Opportunities,” and illustrates the firm’s missteps with an eye towad what managers can learn from Facebook’s errors. The firm’s new efforts on enhancing user privacy control and awareness are detailed. Facebook’s wins and lost opportunities as an app and service platforms are also discussed, with lessons offering operating guidance for would-be platform builders. A subsection on the “Shift to Mobile and Facebook’s Platform Challenge” also discusses (with illustrations) China’s massive WeChat, and how that offering has used its lead in messaging to create a successful and broad platform offering over mobile. The prior end section on valuation has been cut, with key concepts on international ARPU and global competition added to other sections, as appropriate.
Chapter 11: “Understanding Software: A Primer for Managers” includes many new examples. Apps, Siri, and code in the Internet of Things all warrant mention. The “Writing Software” section includes new information on software frameworks (Rails, Django, AngularJS), so students have seen key concepts, terms, and mentions of technology before upper-level classes or encounters during planning meetings. The sidebar “Lessons Learned from the Failure and Rescue of HealthCare.gov,” covers a key issue ripped from the news headlines with important take-aways for all managers in a problem/fix/results framework.
Chapter 12 has a new title “Software in Flux: Open Source, Cloud, Virtualized and App-driven Shifts.” The chapter includes more information on mobile and apps. Several older examples are retired in favor of more contemporary ones (although most concepts remain the same). A new subsection is included titled “When the Open Source Army Doesn’t Show Up: Lessons from Heartbleed” offering a great example that will help develop managerial critical thinking and questioning skills related to technology choice, reliance, and risk. Key terms and classifications in cloud computing are strengthened in a section titled “Understanding Cloud Computing Models: PaaS, IaaS, Motivations and Risks.” New data on potential cost reductions via cloud platforms is offered (and illustrated in a chart). The concept of the private cloud (with the CIA’s, Amazon-designed effort used as example) and hybrid clouds are added to the discussion of the types of service offerings. A new section covers mobile and app computing: “Apps and App Stores: Further Disrupting the Software Industry on Smart Phones, Tablets, and Beyond.”
Chapter 13 “The Data Asset: Databases, Business Intelligence, Analytics, Big Data, and Competitive Advantage” adds the phrase “analytics” to reflect industry emphasis of the concept that was already discussed in detail in the chapter’s thorough offerings. A sidebar titled “That Seat’ll Cost You $8, Wait, Make That $45.50,” illustrates how data analytics are driving pricing in sporting events. The “Big Data” subsection mentions the “Three Vs” of Big Data, the volume, velocity, and variety, and the section includes information on the increasing number of initiatives and the growing skills gap. New (and hopefully humorous) examples illustrating spurious data correlation are included in the “Data Mining” subsection. Key statistics have been updated throughout the chapter.
Chapter 14, “A Manager’s Guide to the Internet and Telecommunications,” includes updated information on the new generic top level domains (gTLDs): offerings, costs, intellectual property protection, etc. Stats on the IPv6 rollout have been updated. Paid peering is mentioned when the concept of peering is introduced (and this is related to the current Netflix / Comcast spat. The sidebar “Finance Has a Need for Speed” mentions key concepts from Michael Lewis’ book “Flash Boys” and accusations that some firms have ‘fixed’ trading in their favor. New info on Google Fiber is offered, while much of the old info on WiMax has been cut out. The “Net Neutrality” subsection has been substantially rewritten to reflect recent court rulings, FCC proposals, and competing corporate interests.
Chapter 15, “Google in Three Parts: Search, Online Advertising, and Beyond,” has been updated in several key areas. The intro section reflects not only Google’s ad dominance, but also the firm’s growing experimentation across all sorts of industries, and its “moonshot” R&D efforts. The “Why Study Google” section offers several additional key points as to why this is a “must study” firm for all business students. A new subsection “Mobile Apps and the Challenge for Google Search,” offers stats on Google’s decreasing share of mobile search, as vertical apps nibble at markets such as reviews, travel information, and music, and efforts such as Apple’s Siri bypass Google, going directly to information partners. The customer profiling and behavior targeting section includes a new subsection titled “Apps, Mobile Browsing, and Default Settings: The Shifting Landscape of Profiling Technology.” This discusses the limitations of cookies and other profiling technologies in app-centric mobile environments, while also introducing new technologies such as Google Advertiser ID and Apple IDFA. Challenges, including Microsoft’s blocking of third-party cookies in IE, and Apple’s scrambling of MAC addresses are also introduced so students gain a more complete understanding of the differences between desktop and mobile, and moves by Google rivals that impact the firm and its clients. “Profiling and Privacy” mentions the EU’s ruling on the “Right to be Forgotten” and the challenges this presents to Google. To keep the chapter fresh and current, several older examples or examples that are irrelevant due to feature changes, have been removed. All key facts and financial data have been updated where new numbers were available. The final section “The Battle Unfolds” includes several updates on Google’s increasing competition across multiple markets, and the firm’s relentless innovation efforts. The subsection “How Big is Too Big” includes new information on Google’s status with EU regulators. “More Ads, More Places, More Formats,” mentions Google satellite, unmanned solar drones, and Google Loon ballon project to increase the world’s access to broadband. “Android Everywhere” discusses recent platform extensions, such as Android Wear, Android Auto, Nest, and the success of the firm’s Chromebook platform, plus additional info on the challenges of platform fragmentation. The sidebar “In Case of Emergency, Wear Glass,” offers compelling examples of Google Glass use in vertical markets, including several in healthcare. A sidebar “The YouTube Millionaires,” offers insight on how the site is creating millionaire media entrepreneurs across a long-tail of content (complementing the chapter’s earlier discussion of adSense content partner success stories). “What’s Google Up To?” includes an embedded video offering insight into the super-secretive GoogleX lab that’s behind efforts like the driverless car, Project Loon, and the high-tech contact lens.
I hope that you enjoy the update! Keeping the content fresh, with yearly releases, is a huge undertaking, and I greatly appreciate the commitment that so many faculty have to using my book. Thanks to all those who have shared words of encouragement. If you’re having a good experience with the text, please forward information to colleagues that you think might also like it.
Expect continued updates on text-related topics via my blog (sign up for e-mail updates at the top of https://gallaugher.com). You can also follow me on Twitter: @gallaugher, and Google+, where I share even more material than makes the blog. Finally, I post updates to my own, personal slides (different from those offered by my publisher), as well as my teaching podcasts, at https://gallaugher.com/chapters.
Best wishes,
John