BUSINESS MODELS

1
BUSINESS MODELS Categories
2
Focused Distributors

• Examples
• Retailer
• Amazon.com
• Marketplace
• QuckenInsurance
• Exchange
• ebay

• Differentiators
• Control Sell Price set Physical
  Likely Likely
• Inventory online online
  product/service revenues costs
• yes yes no yes sales
• Possibly yes no no transactions

3
Focused Distributors

• Multiple business models are required to ensure
  flexibility and sustainability
• Must align closely with vertical and horizontal
  portals or evolve their model

4
Portals

• Are emerging as a dominant source of power within
  e-business markets
• Enterprise portals provide both horizontal access
  to business networks and vertical industry-wide
  solutions

5
Portal models

• Example
• Horizontal
• Yahoo!
• Vertical
• Quicken.com
• webMD.com
• Affinity
• TheKnot.com

• Differentiators
• Deep Affinity
  Likely Likely
• Content solutions
  revenues costs
• Trough through
  partnerships
• partnerships with vertical
• and affinity portals
• yes no
• Within affinity group yes
  

6
Producer Models

• Examples
• Manufacturers
• Ford.com
• Service providers
• American Express
• Educators
• Harvard
• Business School
• Advisors
• Ernst Young
• (ey.com)
• Information and
• News services

• Differentiators
• Sell/serve Sell/serve Level
  of Likely
  Likely
• online offline
  customization revenues
  costs
• yes yes low to
  moderate
• yes possibly moderate to
  high
• yes yes
  moderate to high
• yes yes
  moderate to high
• yes yes
  moderate to high
• yes yes
  high

7
Producer trends

• Must be best in class no 1 or no 2 brand to
  survive
• Industry supplier coalitions are forming
• Some large full-service producers (AE, for
  example) in financial services industry, are
  acquiring a full range of products and services
  to become producer vertical portals

8
Infrastructure ProviderDistributor models

• Examples
• Retailer
• Staples.com
• Marketplace
• Techdata.com
• Exchange
• Converge.com

• Differentiators
• Control Sell Price set Physical
  Likely Likely
• Inventory online online
  product/service revenues costs
• yes yes no yes
• usually yes bidding yes
• Possibly yes yes

9
Infrastructure Providercontinued

• Examples
• Equipment
• manufacturers
• Cisco
• Micron
• Software firms
• Microsoft
• Oracle
• Services firms
• Doubleclick
• Custom suppliers-hardware
• Micro Age

• Differentiators
• Sell/Serve Sell/Serve
  Customization Likely
  Likely
• online offline
  
  revenues costs
• yes yes low to moderate
  
• yes yes moderate to high
• yes yes high
• yes usually high
• sometimes yes high

10
Infrastructure provider trends

• Rigid lines between digital infrastructure
  providers and the digital business built on top
  of the infrastructure are blurring.
• There are two competing ASP models producer ASPs
  (SAP, Oracle) that provide online access to
  their brand name software and distributor ASPs
  that offer a full suite of Internet hosting and
  integration services across a broad range of
  software brands
• For example USI

11
Infrastructure Portal models

• Example
• Horizontal
• AOL.com
• Att.com
• Vertical
• Application Service
• providers (ASPs)
• aspstreet.com

• Differentiators
• Content, commerce Hosting
  Likely Likely
• Community solutions services
  revenues costs
• Trough through
  partnerships
• partnerships with
• non-infrastructure
• portals ASP
• yes
  Usually

12
ASPs listan example

• The list

13
Trends

• Horizontal portals such as AOL are vertically
  integrating with horizontal infrastructure
  providers such as Time-Warner cable networks
• Globalization of the technical infrastructure
  standards enabling emergence of global
  infrastructure portals
• Example aspstreet