Digital Transformation using AI

and Emerging Technologies

Term IV Elective
Session 3
Agenda
• Recap
• Platform Business Models & Network Effects
• Cloud Computing
• The Three dimensions of Digital Businesses
• Ecosystems and Accelerated Learning
Classical vs Business Model Disruption Theory
vs
 The Business Model Theory of Disruption
Value Proposition Value Network
Generatives Components
• Price • Customer Segments
• Free Offer • Channel Partners
• Accessibility • Value creation partners
• Simplicity • Revenue partners
• Personalization • Cost structures
• Aggregation • Network effects
• Unbundling • Data
• Integration • Customer Intimacy
• Social • etc.
Platform Business Models
• Platform business is a business model that focuses on helping to
facilitate interactions across a large number of participants.
• Give me some examples of platform?
Network Effects

PLATFORM

Same-side network effect: Value of a service goes as the number of users go up.
Cross-side network effect: When the strength of one side has an impact on the growth of
other side.
Cloud Computing
• According to the US National Institute of Standards and Technology
(NIST) (Mell & Grance, 2009), cloud computing is:

“a model for enabling convenient, on-demand network access to a

shared pool of configurable computing resources (for example,
networks, servers, storage, applications, and services) that can be
rapidly provisioned and released with minimal management effort or
service-provider interaction.”
Underlying concepts of Cloud Computing
Time sharing (1955) Sharing of resources across multiple customers –
Resource pooling / Aggregation of demand
Virtualization (1960) Abstracted infrastructure and virtualized physical resources; leads
to multi-tenancy
Internet (1985) Connectivity and ubiquity

Mobile broad band (1991) Mobile technology innovations -> leads to device independence
from ubiquity
Grid computing (1990) The use of widely distributed (connected through networks)
computer resources to perform joint tasks to accomplish common
goals.
Utility computing (1995) Service offering of IT resources, measured service – result
oriented, pay per service unit based business model
SOA (1996) Based on prior design paradigms aimed at modularity and loose
coupling; Provides agility and configurability
Web 2.0 (1999) Based on interactive and dynamic browser experience; provides
rapid, dynamic, on-demand access based on self-service.
History / Evolution
Cloud Computing Types
• Public – Amazon Web Services, Microsoft Azure
• Private – HP Data Centers, Elastra Private Cloud
• Hybrid
• Community – a shared cloud computing service environment that is
targeted to a limited set of organization or employees (such as banks)
Cloud Computing Services
• IaaS (Infrastructure as a service) - type of cloud computing service that
offers essential compute, storage and networking resources on demand, on
a pay-as-you-go basis.
• PaaS (Platform as a service) - a cloud computing model that provides
customers a complete cloud platform—hardware, software, and
infrastructure—for developing, running, and managing applications without
the cost, complexity, and inflexibility that often comes with building and
maintaining that platform on-premises.
• SaaS (Software as a service) – a cloud computing service that delivers
applications over internet as a service.
Benefits and Risks of Cloud
Benefits Issues
Cost Savings Interoperability/Integration issues
Economic Time Savings Technical Standard solutions/limited features
Reduced need of IT personnel Customization?
Access to state-of-art technology Outages
Performance
Technical Access to skilled resources Availability issues
Reduced risk of technical obsolescence Network capacity
Network
Helps in managing demand Network reliability
Managerial Reduces management effort Loss of control
Governance
Ease of deployment Vendor lock-in
Focus on core competencies Data Security, Recovery, Integrity
Reduced time to market Compliance
Strategic Benefits
Responsiveness and Agility Legal Business Continuity
Global Reach Legislation / jurisdiction issues
The three Dimensions
of Digital Business
• Scale (exponential increase)
• Scope (expansion possible even in unrelated areas)
• Speed (fast-mover advantage)
The Three Dimension: Scale, Scope and Speed

• Scale
• Google – 1 billion search queries in 2012 to 2 trillion + in 2021
• Uber – small set of rides in 2011 to a total of 10 billion + rides by
2021
• Airbnb (started in 2008) has 150 million + users and 7 million +
listings by 2021
• Scope
• Amazon – from an online book store to presence in many
business domains
• Apple – moving into smart connected
• Speed
• In terms of internal processes as well as responding to change
• Network Effects “the rich gets richer”
The three dimensions in combination

Ecosystem
Scale Advantages

Accelerated
Scope Speed Learning
 • In the industrial world – scale and scope advantage
meant assets that a single firm controlled and the
units that it produced.
• In the digital world – scale and scope means
The Digital leveraging the ecosystem that includes key
partners that play complementary roles.
• Ford and GM’s vs Uber’s scale
Era: • Nokia’s vs Google’s scale
• Apple and Google getting into payment apps
Ecosystems • Speed: The structure of relationships determine
the extent to which firms leverage speed
advantages of ecosystem
• Sony mobilized its game development partners
to keep up with console versions
Ecosystems
 • Learn from products at scale to detect early
warning signals
• Learn from customers that use complementary
products to proactively improve key features
The Digital (scope)
• Learn from experimentation through data and
Era: analytics (rapid learning – speed)

Accelerated
Learning
Thank you.