Cybersecurity by Design

17

September

2022

5/5 (2)

We are living in a continuously digitising world where increasingly more aspects of our life are governed by IT processes. The rapid adoption of IT means that cybersecurity incidents are on the rise (ENISA, 2022). Governments and organisations alike are investing in efforts to raise cybersecurity awareness. For example, people are being trained to treat emails carefully, especially if they contain a link or file. This increased cybersecurity awareness is expected to reduce the risk of cyber incidents happening. However, research calls the effectiveness of these awareness strategies into question. Studies show that long-term changes in the digital behaviour of individuals as a result of these awareness campaigns are little (Bada, et al. 2019). Given that awareness does not prevent the users of IT systems from compromising cybersecurity, another approach is required.

The cybersecurity by design (CSD) model changes the assumption from which the awareness model is operating. Instead of assuming that awareness will prevent people from making mistakes, the CSD model assumes that individuals will make mistakes, nevertheless. The question for software developers then becomes: how can I develop my software such that the risk of compromised cybersecurity is mitigated even if careless users utilise it? Major software companies like Microsoft and Google have already designed their software with this question in mind. In Outlook, emails from unverified senders are displayed in a protected mode where links, images, and files are disabled. This prevents users from mindlessly downloading a file or link, both of which could be potentially harmful. Naturally, the user has the option to mark the sender as verified thereby enabling the content. Another implementation of the CSD model can be found in Google Chrome. Google maintains a list of websites that might put users at risk for malware or phishing. So, when users try to navigate to a potentially harmful website, a warning message is displayed, and they are prevented from entering. Here too, users have the option of navigating to the website despite this warning.

Both examples show how software developers can aid their users in navigating the digital world more safely. The CSD model thereby shows great promise for making the digital world a safer place. However, it cannot do so all by itself. Despite the criticism that the awareness model has faced I am convinced that it can work well together with the CSD model. Being made aware of risks can always have added value, especially in a CSD proof environment. A CSD proof environment can shield users from potentially dangerous content, but it is up to the users themselves to make the final risk assessment. To be able to do so, awareness campaigns can be of help. Ultimately, it is a right balance of CSD proof software and user awareness that will add up to safe navigation of the digital world.  

Sources:

Bada, et al., 2019, ‘Cyber Security Awareness Campaigns: Why do they fail to change       behaviour?’, International Conference on Cyber Security for Sustainable Society,             accessed 10th of September 2022, https://arxiv.org/abs/1901.02672

ENISA, 2021, ‘ENISA Threat Landscape 2021’, accessed 10th of September 2022,             https://www.enisa.europa.eu/publications/enisa-threat-landscape-2021

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How to be taken seriously as a woman in IT

8

October

2021

No ratings yet.

That was the main concept of an article I read from Gartner (2020) today, and I found it quite shocking to be honest that such a ‘recognised institute’ would write this. It’s isn’t phrased that way, but reading the article ‘What Makes Woman in Technology Great CIOs’ felt more like reading the first questionable ‘how-to’ guide you find when googling a question. It is written between the lines, for example the first question stated in this article is: “How can more female leaders rise to the top?”.

The article suggests that becoming a CIO nowadays requires more ‘feminine-perceived’ traits than before and that therefore females should be at advantage. I am not implying that they say that woman can’t do ‘masculine’ tasks well (or the other way around), but I personally don’t think determining a skill as masculine or feminine is useful or necessary. Gartner questions why only 11% of CIOs are woman, when the ‘feminine’ traits are much needed in this position.

Own experience

As a woman in IT myself, this number doesn’t shock me. I know that in regards to this subject, I am part of a minority. In my previous study, internships and my side jobs in IT, I found out that you have to take your place as a woman in IT. I was one of the five woman studying Business IT and management in my graduation year (+200 students) and I am often the only woman in my team doing an ‘IT job’. To be honest, I don’t care about that. I just want to work with passionate IT-ers who value my work. I am fortunate enough that I never experienced my direct colleagues or professors questioning my skills because of my gender. However, I did notice that I sometimes had to prove myself first, and realised that in some companies the ‘higher ups’ did question my technical skills. I also always have to be included in team-pictures so that the company can show off their diversity and don’t follow ‘the stereotype of IT-ers’ (which I don’t agree with by the way, but that is another subject).

How to be a woman at the IT-top

So far, this hasn’t really been a problem since I am still in college and not actively trying to build a career with a higher position. However, according to this article, if I want to climb up the ladder I would have to do the following things to succeed:

  1. Resist the tendency to prove your technical skills, since as a manager you should be more a business visionary and a role model.
  2. Build trust by being tough but still empathic.
  3. Gain support from a male colleague, so they wont question your judgement when hiring a someone from a minority.
  4. Guide behavioural change at the top and remind them of what your job is and why you’re ‘questioning’ the current day-to-day activities.
  5. Pick your battles: “Support and encourage male C-suite peers to build on the first step they’ve taken by hiring you”.

This list set me thinking. So why do woman have to do these things to be taken seriously? Why isn’t this a list for managers in general? And why would I need male colleagues as a support base? Didn’t we learn in class that diversity enables critical thinking and more diverse idea generation? I do think Gartner wrote this article with the right intentions and didn’t anticipate on triggering these questions of readers. But I find this remarkable statements, that just ‘accept’ that IT-woman aren’t taken seriously when being themselves, instead of providing suggestions how to find a workplace that does value you and your skills.

I definitely don’t want to be hired because I am a woman in IT. I want to be hired because I am good at what I do. And I want to be taken seriously for it, without having to look for male peers to back me up. I know that in certain jobs (for example kindergarten teachers), this is the other way around, which is just as unethical. Please let me know what your experiences are (male or female, other majorities or minorities and everything in between). I’d like to hear what you think in the comment section.

References

Gartner. (2020, October 5). What Makes Woman in Technology Great CIOs. Retrieved October 8, 2021, from Gartner: https://www.gartner.com/smarterwithgartner/what-makes-women-in-technology-great-cios

Hawlina, H., Gillespie, A., & Zittoun, T. (2017). Difficult differences: a socio-cultural analysis of how diversity can enable and inhibit creativity. Journal of Creative Behaviour. doi:10.1002/jocb.182

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Biomimicry: From Neural Networks to Neural Architecture

29

September

2020

5/5 (3)

josh-riemer-OH5BRdggi2w-unsplash

Biomimicry: From Neural Networks to Neural Architecture

Biomimicry is not new; the philosophy is that nature has already solved some of the puzzling problems that we humans are facing today. Just looking at a few examples—bird beaks as inspiration for trains, gecko toes for adhesives, whales for wind turbines, and spiders for protective glass (Interesting Engineering, 2018)—leads us to indeed conclude that nature can help us solve difficult problems. However, what about our own nature; what problems could human biology inspire us to solve?

Well, there is one problem that we are facing in the field of computer science, which I am fairly sure you have heard of: the nearing ‘death’ of Moore’s law. Gordon E. Moore predicted, in 1965, that “the number of transistors per silicon chip doubles every year” (Brittanica, n.d.). However, we are nearing the limits of physics when it comes to scaling down transistors and packing them closer together on a traditional computer chip (Technology Review, 2020); going any denser would cause overheating issues.

There are plenty of problems that require vastly more computational power than we possess today, for example in the fields of physics, chemistry and biology, but also in more socio-technical contexts. Our traditional computer chips, built on Von Neumann architecture, do not pack the power to solve these and more problems; traditional chips even struggle with tasks as image and audio processing. Perhaps the biggest flaw is the infamous ‘Von Neumann bottleneck’.

This, amongst other reasons, has been inspiring researchers to pursue a different type of architecture, one that is more energy efficient, packs more processing power, and get rids of a particular bottleneck between processing and memory retrieval (but more on that below). One promising field of research is that of neuromorphic architecture: a design that mimics the architecture of the human brain.

Traditional chips

Von Neumann architectures – i.a. what your laptop and mobile phone is built on – have computer chips with master clocks that, at each tick, evaluate a binary input and pass on a binary output through the logic gates in the transistors of the chip. The processor can only be on or off and often stands idle while waiting to fetch information from the separated memory, which makes them very energy inefficient and gives rise to the ‘Von Neumann bottleneck’. The latter comes down to the problem that, no matter how much processing power grows, if ‘transfer rates’ (the rates at which memory is retrieved) stay the same, the latency will not improve (All About Circuits, 2020). This clock-driven, binary architecture stands in stark contrast to the architecture of neuromorphic chips.

Neuromorphic chips

Neuromorphic chips contain a spiking neural network, the artificial neurons within which are only activated when signals reach an activation threshold, remaining at a low power use-baseline otherwise. These signals, which are electric pulses, are fired when sensory input changes. The implications of a signal depends on the number of spikes within a certain period of time, as well as the design of that specific chip. These signals are gradient rather than binary, which means that they – via weighted values – can transfer more information per signal than a bit can. Overall, the design lends itself excellently for processing sensor data, including speech, image and radar inputs. We currently see that such sensory inputs are processed on neural networks, but on traditional architecture. The hardware of neuromorphic chips, as the name may give away, resembles neural networks, which adds the benefit of running AI models at vastly higher speeds than C/GPUs can (IEEE, 2017).

The artificial neurons of a neuromorphic chip, or synaptic cores, operate in parallel. This means that multiple neurons can be activated and activate other neurons at the same time (Psychology Today, 2019). This makes neuromorphic chips incredibly scalable—since you can increase the amount of artificial neurons—as well as fault-tolerant, since neurons can find other synaptic routes (via other neurons) when another neuron breaks. This mimics neuroplasticity in the human brain.

Another quintessential aspect of neuromorphic chips is that memory and computation are tightly coupled. Whereas traditional chips require external memory for non-volatility, this type of memory is inherent to the design of neuromorphic chips (IBM, n.d.). The artificial neurons within a chip are connected by memristors that resemble artificial synapses. These memristors pack non-volatile memory, because they ‘remember’ the electric charge that has previously flown through it, as well the direction in which it has been sent (MIT, 2020). This non-volatility means that memristors retain their information even after the device is shut off.

Players to watch

The neuromorphic computing industry is consolidated and built upon traditional computer engineering capabilities. In my view, there are three chips to watch in the field of neuromorphic computing: BrainChip’s Akida, IBM’s TrueNorth, and Intel’s Loihi.

  • BrainChip’s Akida consists of 80 neuromorphic processing units that amount to 1.2 million neurons and 10 billion synapses (Nextplatform, 2020).
  • IBM’s TrueNorth consists of 4096 cores that amount to 1 million neurons and 250 million synapses (CACM, 2020).
  • Intel’s Pohoiki integrates 768 Loihi chips and amounts to 100 million neurons (Intel, 2020).

While Intel’s Pohoiki—a neuromorphic systemic aggregation of Loihi chips—is still in the research phase and only oriented to researchers, its 100 million neurons make it the most advanced neuromorphic system as of today (InsideHPC, 2020). It can do specific tasks up to 1,000 times faster and 10,000 times more efficiently than conventional processors (Intel, 2020). In terms of the amount of neurons inside, Intel’s Pohoiki resembles a small mammal. In addition, Intel (2020) claims that the neuromorphic system does not only fulfil AI purposes, but a wide range of computationally difficult problems.

Practical considerations

Neuromorphic chips are energy efficient, run AI models more efficiently than traditional architectures, are scalable, and reduce latency by tightly couple processing and memory. These properties make neuromorphic chips fit to run AI models at the edge rather than the cloud, which can be valuable for application in (i.a.) autonomous cars, industrial (IoT) environments, smart cities, cybersecurity, embedded video and audio, and in optimization problems such as minimal risk stock portfolios (Nextplatform, 2020; Intel, 2020). In addition, the energy efficient and compact design could enable deep learning to become embedded inside devices such as mobile phones. This could drastically improve natural language processing in day-to-day applications – just imagine Siri actually understanding your question and providing a helpful answer!

However, we are not there yet. There are still plenty of challenges, amongst which is developing the most efficient learning algorithms to be ran on the neuromorphic chips. Neuromorphic chips are still in their infancy, and overcoming technical hurdles will not be the only challenge (Analytics Insight, 2020); ethical concerns surrounding biomimicking hardware already exist, and should be expected to expected to intensify as the technology gains traction and its capabilities grow.

As of now, neuromorphic hardware is not commercially viable yet, but that does not mean we should not pay attention to it.

In the face of all this exciting uncertainty, I will conclude with some food for thought. Please let me know in the comments what your opinion are on (one of) the following three questions:

  • Do you think neuromorphic chips possess potentially transformative power to the nature of work, or even our day-to-life? Why?
  • What type of (business applications) do you see for hyper efficient neural network processing at the edge?
  • Can you think of any problems that we have pushed forward along the uncertain and lengthy path of quantum computing research, that may be solved earlier by neuromorphic computing?

References

All About Circuits. (2020) https://www.allaboutcircuits.com/news/ai-chip-strikes-down-von-neumann-bottleneck-in-memory-neural-network-processing/ [Accessed September 25, 2020]
Analytics Insight. (2020) https://www.analyticsinsight.net/neuromorphic-computing-promises-challenges/ [Accessed September 28, 2020]
Britannica. (n.d.) https://www.britannica.com/technology/Moores-law/ [Accessed September 25, 2020]
CACM. (2020) https://cacm.acm.org/magazines/2020/8/246356-neuromorphic-chips-take-shape/fulltext [Accessed September 28, 2020]
IBM. (n.d.) https://www.zurich.ibm.com/sto/memory/ [Accessed September 26, 2020]
IEEE. (2017) https://spectrum.ieee.org/semiconductors/design/neuromorphic-chips-are-destined-for-deep-learningor-obscurity [Accessed September 26, 2020]
InsideHPC. (2020) https://insidehpc.com/2020/03/intel-scales-neuromorphic-system-to-100-million-neurons/ [Accessed September 28, 2020]
Intel. (2020) https://newsroom.intel.com/news/intel-scales-neuromorphic-research-system-100-million-neurons/ [Accessed September 28, 2020]
Interesting Engineering. (2018) https://interestingengineering.com/biomimicry-9-ways-engineers-have-been-inspired-by-nature [Accessed September 29, 2020]
MIT. (2020) https://news-mit-edu.eur.idm.oclc.org/2020/thousands-artificial-brain-synapses-single-chip-0608 [Accessed September 26, 2020]
Nextplatform. (2020) https://www.nextplatform.com/2020/01/30/neuromorphic-chip-maker-takes-aim-at-the-edge/ [Accessed September 28, 2020]
Psychology Today. (2019) https://www.psychologytoday.com/us/blog/the-future-brain/201902/neuromorphic-computing-breakthrough-may-disrupt-ai [Accessed September 26, 2020]
Technology Review. (2020) https://www.technologyreview.com/2020/02/24/905789/were-not-prepared-for-the-end-of-moores-law/ [Accessed September 25, 2020]

 

 

 

 

 

 

 

 

 

 

 

 

 

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The future of blockchain in the supply chain industry

6

October

2019

5/5 (1)

Source: (Miller, 2019)
Source: (Miller, 2019)

The future of blockchain in the supply chain industry

Blockchain is the promised land for lean transactions, they do not require a middleman anymore since trust is established by cryptography. Although it all sounds very realistic, how fast can we actually make use of it on a greater scale? More specifically, how can a modern supply chain make use it the new technology?

I will start with a short explanation of the blockchain technology. It is a decentralized database, which stores a registry of assets and transactions across a peer-to-peer network. These transactions are secured through cryptography, over time a transaction gets history, or time stamped, and is locked in blocks of data. These blocks are thereafter linked together. However, not all blockchains are the same. One should consider permissionless (open, public) and permissioned (closed, private). (Alicke et al., 2017) In this article we only consider closed/private blockchains.

Supply chain has potential benefit from blockchain as it is mostly complex and not transparent. The reliability and integrity that is needed in supply chains is part of the blockchain technology. E.g. to see the chain of ownership of goods (to trace all products to its source), and thereby have the option to eliminate illegal items, items produced with child labour and the like. Moreover, records cannot be deleted from the chain, there is no way wrongdoers can screw the system. (Marr, 2018)

In the supply chain one can think of the following applications. First, slow and manual processes can be substituted. Secondly, traceability can be enhanced. And supply chain related transaction costs can be reduced, e.g. by using blockchain for making payments. But in order to get there a lot needs to change. For example, data accuracy and availability, generating company wide standards that even go beyond your own company (in your supply chain), who will pay and who can do it (highly educated talent is needed). (Alicke et al., 2017) & (Marr, 2018)

In my opinion, blockchain has great potential but should be considered an option, not a must. The complexity and costs that come along with the new technology might not always pay off. Simpler and faster solutions might also very well do the job. Moreover, many companies do not seem to be ready for it yet. Data, knowledge, employees’ mindset and more cooperative IT and business leadership is needed to make blockchain adoption successful in your supply chain. Which is confirmed by my own experience, from working in corporate and scale up companies that want to adopt new technologies as much as possible.

References:

Alicke, K., Davies, A., Leopoldseder, M., & Niemeyer, A. (2017). Blockchain technology for supply chains–A must or a maybe?. Retrieved 6 October 2019, from https://www.mckinsey.com/business-functions/operations/our-insights/blockchain-technology-for-supply-chainsa-must-or-a-maybe

Marr, B. (2018). How Blockchain Will Transform The Supply Chain And Logistics Industry. Retrieved 6 October 2019, from https://www.forbes.com/sites/bernardmarr/2018/03/23/how-blockchain-will-transform-the-supply-chain-and-logistics-industry/#131b03ad5fec

Miller, J. (2019). Microsoft and Intel Believe that Blockchain Technology is Not Upto Scratch. Retrieved 6 October 2019, from https://www.cryptonewsz.com/microsoft-and-intel-believe-that-blockchain-technology-is-not-upto-scratch/19489/

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Digital Transformation Project – Julia’s Pasta Transformation -Group 6

23

October

2016

No ratings yet. We started our digital transformation project by understanding the frustration of customers of Julia’s: long waiting times. During our research we developed a suggested solution for this problem.

Firstly, we examined the internal and external environment of Julia’s. Here we found that the competitive advantage of Julia’s lies in the handmade, authentic and healthy food they provide, but the average waiting times are quite high when comparing them to other options to have dinner at railway stations.

One of the important goals of Julia’s is that the preparation of a pasta should not take more than four minutes. Taking into account this important goal we defined four key success factors (KSF). We defined the key success factors as punctuality (KSF 1), consequent quality of products (KSF 2), customer satisfaction (KSF 3) and distinguish from competition (KSF 4).

First of all, the investment in the application will turn profitable if an increase in customers is achieved. The pasta bars of Julia’s have to change the organization within each bar so that there is a fast and convenient way to pick up the online ordered food by the users of the application.

Long waiting lines will disappear as customers are now able to pre-order their meal so that they do not have to wait in line. By reducing the waiting time, the punctuality will be higher. Julia’s will provide handmade, fresh and authentic fast food, which will grow their competitive advantage and distinguish from competitors by being fast and offer a decent, warm and healthy meal. Finally, the reduced waiting time and the guaranteed quality of products will lead to a high customer satisfaction what leads to more sales of products and makes the investment profitable.

A limitation of the application could lie in the problem that customers are not on time for picking up their meal, caused by a delay of the train. To prevent this problem, we would suggest to implement the Julia’s online ordering application into the NS application, as the NS application provides information regarding all of the train delays. This information could help to see the delays coming and would prevent the food from being too long in the heating system. Another limitation of the application could be that there is not enough capacity at the Julia’s pasta bars. We suggest to reorganize the pasta bars to become more efficient and larger to ensure all of the demand of customers. 

In the end we could say that the online ordering application would turn out to be a profitable investment and we therefore suggest to implement the application as soon as possible. We also would like to mention the possibility to implement the application within all the formulas of NS retail when the application works smoothly and when the customer satisfaction will increase.    

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Business in the skies – how drones can revolutionize the way of doing business

5

October

2016

5/5 (4)

The introduction and popularization of drones has brought new opportunities for companies in a vast number of industries. It is possible that we are witnessing a disruption similar to the one caused by information technology and telecommunications that altered business models of companies and reshaped whole industries.

Drones, or officially, the Unmanned Aerial Vehicles (UAV) are the aerial vehicles that are capable of flying without a human pilot on the board, autonomously or under the remote control. UAVs have been used in military service for some time already and are becoming increasingly popular in the business operations. Drones are currently being tested by Amazon (Amazon PrimeAir) or DHL (Parcelocopter) in companies’ logistic operations.

According to the report Clarity from above published by the PwC in May 2016 the addressable market value of drone powered solutions is estimated at over $127 bn. This is the value of labour and business services that may potentially be replaced by the broad applications of UAVs for business in the nearest future. The affected industries are diverse and range from agriculture to filmmaking. By implementation of the drone technology into their current processes, companies will be able to create new businesses and operating models.

Drones, thanks to the diverse individual characteristics of industries, will be used in many different ways and for various purposes. For example, the transport industry can use UAVs for e-commerce package delivery, fleet management, spare parts delivery or same-day food delivery. The most relevant features of drones for this industry are their speed, accessibility and low operating costs compared with the means of transport that require human labour. The next example is the infrastructure management. Railway, energy and oil and gas companies can use drones effectively for investment monitoring, maintenance and inventory management. Drones may prove to be valuable tools as they are capable of acquiring various data precisely and cost-effectively. What is more, UAVs can replace humans in some hazardous activities, and therefore reduce the number of accidents and increase the overall work safety.

However, there are also factors that may block or make the implementation of drone powered solutions more troublesome and thus slow down the adoption of drones in the business. The first potential barrier are legal regulations. Business entities need clear and transparent rules on how and where drones can be used and how to ensure the safety of drone operations. Another barrier for popularization of drones in business are privacy issues linked to these devices. Data collected by drones may contain private or sensitive information. Clear rules on which information can be collected and stored and how the privacy rights can be defended should be introduced. The last obstacle for popularization of commercial usage of drones is safety. Drone operations have to be supervised and a complex air-traffic management system should be developed in order to eliminate the risk of collisions with other aerial vehicles. Additionally, an auto-fail function, that would prevent the drone from uncontrolled fall to the ground should be included in every UAV.

Drones may bring plentiful of opportunities and benefits to many industries and revolutionize the companies’ operations forever. However, there are also aspects that may make the adoption of drones in the business difficult or impossible. What is your opinion on the future of commercial usage of drones?

 

Sources:

  1. https://www.amazon.com/b?node=8037720011
  2. http://www.thefreedictionary.com/Unmanned+Aerial+Vehicle
  3. http://www.pcworld.com/article/3082649/tech-events-dupe/dhls-parcelcopter-is-automated-drone-delivery-in-action.html
  4. http://www.pwc.pl/en/publikacje/2016/clarity-from-above.html

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The End of Warehouses

17

September

2016

5/5 (2) In the original supply chains products move from supplier to customer meeting a manufacturer, distributor/warehouse and a retailer on the way. Products are produced in places where it can cheaply be produced and are then shipped to a big warehouse. From there it is moved to retailers, which sell it to customers.

Everybody is familiar with this supply chain. Especially when it is about clothing. But, some changes are on their way. The increased IT possibilities are making this a vulnerable market. To become a vulnerable market, the market must become easy to enter due to technological changes (Granados et al. 2008). Where the classic clothing industry was built upon brands which sold their products through retailers (like ‘De Bijenkorf’ or ‘El Corte Inglés’) there are now retailers selling clothes without owning a single B2C retail shop (like ‘Zalando’). This market is attractive to attack, there is a lot of profit to make. And difficult to defend, online shopping is easy and quick. And thus a vulnerable market.

Because of the shift from offline retailers to online retailers already one step in the supply chain is doomed to disappear. However, that is not where it stops. A new IT improvement can change this market again. At this moment the online retailers are struggling to give customers the right product. Lots of products are returned because it cannot be fitted as customers can in the offline shops.

Start-ups are creating solutions to solve this problem. Apps are being developed where customers can identify their exact sizes so this app can give you an advice about which size you should order. Regardless the sizing method. They even make it possible to order tailor made suits without being in a shop.

In my opinion this new development will change the market again. Another step in the supply chain becomes obsolete, the warehouses. Why store a thousand black ‘M’ size shirts in a warehouse when those shirts can be tailor made and send to the customer directly. This development even creates the opportunity for brands to sell their clothes directly to customers and skip the online retailers like Zalando.

What do you think? Is this development the end of warehousing? And can this already mean the end of newly fast-growing online retailers? Is this a vulnerable market again?

 

(1) Granados, N.F., Kauffman, R.J. & King, B., 2008. How Has Electronic Travel Distribution Been Transformed? A Test of the Theory of Newly Vulnerable Markets. Journal of Management Information Systems, 25(2), pp.73–96.

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Technology Of The Week – Music (Streaming) Industry – Group 6

16

September

2016

No ratings yet. The music industry has been disrupted by IT advances. We used to listen to music on mp3-players and nowadays we stream music and listen to music everywhere we are. The music industry became a newly vulnerable market.  This market was newly easy to enter through technological changes, a drop in costs and through the ease of spreading music online. It was a cheap small step to streaming services. Furthermore, the industry was attractive to attack because of the high fixed costs the record companies had to cover. Record companies made it difficult to defend themselves, because the companies did not compete with the new online distribution strategies, which left them far behind in the market.

We analysed Deezer and Plugify to get a better understanding of the disruption in the music industry. Deezer is an independent online music streaming provider, has 6 million subscribers and is available in 180 countries. Deezer operates as a multi-sided platform business model. One segment finances the other segment. The user is looking for music, while the advertiser is looking for an audience to advertise their products. Deezer focuses on a long tail strategy. Because there are no stocking costs online, Deezer could provide an unlimited amount of songs, what means all niche tastes can be served. Also the lower costs of making music support the niche market. Plugify is an online platform to book live music. The customer searches for a desired artist and can book and pay online. The business model of Plugify consists of two key players, the customers and the artists.

When we look at the comparison between Deezer and Plugify, we see that Plugify has a first mover advantage in their field and that Deezer faces a lot of competitors who supply similar services to their customers. For Plugify the power of supply is high as they need as much artists as possible and they only operate in the Dutch market. The power of supply for Deezer is low. There are only a few artists who refuse to deliver their music. The power of buyers of Plugify is high as customers can easily find artist online. The power of buyers of Deezer is low, because Deezer has a large customer base also due to their partnerships with telecom companies. Besides, when a customer has to pay for their account, they often don’t want to leave. For Plugify there is a high threath of new entry in comparison to Deezer where this is low, because the market is already dominated. The revenue model of Plugify consists of a 8-12% commission per booking as Deezer focuses on subscription fees and advertisement income. The cost structure of Plugify and Deezer is quite the same.

In the future there will also be changes in the music industry.  Artists will earn money through performances instead of selling music. There will be more music experience through virtual reality, more music personalisation and sharing music through social media channels will become easier. And of course music streaming will become mainstream.

By:

373396 Florine Koot

365545 Christianne ‘t Hart

376005 Elisabeth Kuyf

376482 Emilia Mertens

References:

Retrieved 14 september 2016, from http://opim.wharton.upenn.edu/~clemons/files/JMIS-.Online_MusicV3_doc.pdf

Plugify (2016) Retrieved 14 september 2016, from http://www.emerce.nl/interviews/plugify-online-bands-boeken-fluitje-cent.

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