Sunday, March 21, 2010


Describe how recent innovations by others have affected competition in your industry. These innovations might have originated from historical rivals, new entrants, producers of substitutes, your suppliers, or your customers. 
Elastic computing combined with “on-demand pricing” has been the biggest innovation lately that is affecting competition in the digital media/Internet industry.

Basically elastic computing is virtualized computing. A firm has virtual computers that are hosted within mega computers. This allows firms to forgo charges related to data centers, power consumption and, to a large extent, maintenance labor. It also gives great flexibility with growth. For example, a firm just starting off can opt for the cheapest or least powerful computer, but if the firm’s product becomes popular, adding additional computers or upgrading to a more powerful computer is essentially trivial. This innovation goes a long way in solving one of the biggest problems in our industry: scaling to meet demand.

The pricing model is innovative as well. With this innovation, firms only pay for what they use. So firms can pay based on the computing power they consume.

To what extent does your organization incorporate the time-cost trade-off into decisions to develop and introduce new products? 

In our group, we don’t consider the time-cost trade-off that much. All our products are built within a year, so there isn’t much cost to save by delaying the time to product the product. What we usually do is assign a severity score when deciding what project to build next. Basically, we look at perceived value to our group’s strategy divided by estimated cost plus estimated time. That gives us a barometer for choosing to develop a product or not.

Explain the extent to which your organization is (or is not) an innovator.

We innovate by building new products for our users. For example, we are releasing a new application that challenges fans to see who can pick the most amount of games in a row correctly. We are also innovative for our industry. As a large content producer, we are one of the first firms to move to elastic computing, Ruby on Rails and outsourcing of development. These are all things smaller startups do, but normally aren’t possible in large companies with proprietary technologies and large amounts of Internet traffic.
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