INFORMATION TECHNOLOGY IN BUSINESS AND SOCIETYSESSION 6 – HOW COMPUTERS AND THE WEB WORK

SEAN J. TAYLOR

ADMINISTRATIVIA

• Facebook Experiment: See Beibei Li in 8-186 after class (3pm-5pm) to receive payment

• Varun’s office hours on Monday: 2-4pm in 8th floor tutoring area

• Assignment 1

LEARNING OBJECTIVES

1. Understand how platforms emerge due to network effects.

2. Think strategically about how firms use platforms for competitive advantage.

3. Explain how standards emerge and how standards are different from platforms.

PLATFORM OR PRODUCT?

• part of a technical system whose components come from different companies or organizations

• relatively little value without complementary products or services

WHY BUILD A PLATFORM?

• Firm is unlikely to be able to provide all useful services or applications ahead of time

• Brings more value to users by creating room for configuration, expansion (product fit, value)

• Lock-in for platform users who make costly investments to use them

• Platforms are useful abstractions, even for internal use

PLATFORMS ARE INEVITABLE

DIRECT NETWORK EFFECTS INDIRECT NETWORK EFFECTS

PLATFORM BATTLES

MUTUALLY INCOMPATIBLECOEXISTENCE (DIFFERENTIATION)

MULTIPLE “MARKET SIDES” TOA PLATFORM

PLATFORM STRATEGY

NETSCAPE INTERNET EXPLORER

STANDARDS:SOLVE COORDINATION PROBLEMS

• governments• corporations• consortia• professional associations• standards-organizations (ISO)• volunteers or developers• de facto standards

STANDARDS: HELPING COMPUTERS EXCHANGE INFO

STANDARDS AS LANGUAGES

STANDARDS AS INTERFACES

STANDARDS AND IMPLEMENTATIONS

Implementations and specifications have to do a delicate dance together. You don’t want

implementations to happen before the specification is finished, because people start depending on the details of implementations and that constrains the

specification. However, you also don’t want the specification to be finished before there are

implementations and author experience with those implementations, because you need the feedback.

There is unavoidable tension here, but we just have to muddle on through.

TECHNICALLY, WHAT IS A PLATFORM?• A Hardware and/or Software system with an interface for

applications• Typically, a platform has an API--Applications Programming

Interface: an interface (i.e., a set of standardized commands) that the underlying “platform” can execute

• Software creators use the API when writing programs

Processor (Hardware)

Operating SystemApplication Programming Interface

Application Software (e.g., Office)Application Programming Interface

Application Programming InterfaceCustomized “programs” (e.g., Excel Macros)

Hardwareplatform

O/Splatform

Applicationplatform

APPLICATION PROGRAMMING INTERFACE

PLATFORM EXAMPLESHardware+OS platforms• ‘Wintel’ (Microsoft Windows + Intel/AMD)• Apple (Mac OS X + Intel, used to be IBM PowerPC)• Sun (Solaris + SPARC, also moving to Intel)• Linux (Linux + Intel/AMD)• Windows Mobile (Microsoft OS + Cell Phones)• X-Box, PlayStation, GameCube…• The Web is also a platform

Amazon’s Web services• Powerful retailing platform that lets other retailers use the

capabilities of Amazon’s retailing siteGoogle’s many platforms• Web search, desktop search• Maps• Others?

PLATFORMS ARE AN EXAMPLE OF LAYERING• Think of each “layer” as software or hardware that can

perform certain tasks• Higher layers can use the capabilities of lower layers• Each layer specifies an interface that defines how a higher

layer can “call” these capabilities• Layering underlies the progress in Information Technology

by breaking difficult problems into smaller ones and allowing improvements in individual areas without worrying about implications for the rest of the system

• Software layers can be improved, or replaced by hardware layers

• Hardware layers can be improved, or replaced by software layers

LAYERS

THE CLOUD!THE ULTIMATE PLATFORM

“THE AGE OF THE PLATFORM”BY PHIL SIMON

NEXT CLASS:COMPUTERS AND THE WEB I

• Read about Moore’s Law• How Computers Work video• How the Internet Works

video