John Gallaugher

Understanding network effects in software markets: evidence from web server pricing

Prior theoretical research has established that many software products are subject to network effects and exhibit the characteristics of two-sided markets. However, despite the importance of the software industry to the world economy, few studies have attempted to empirically examine these characteristics, or several others which theory suggests impact software price. This study develops and tests a research-grounded model of two-sided software markets that accounts for several key factors influencing software pricing, including network externalities, cross-market complementarities, standards, mindshare, and trialability. Applying the model to the context of the market for Web server software, several key findings are offered. First, a positive market share to price relationship is identified, offering support for the network externalities hypothesis even though the market examined is based on open standards. Second, the results suggest that the market under study behaves as a two-sided market in that firms able to capture market share for one product enjoy benefits in terms of both market share and price for the complement. Third, the positive price benefits of securing consumer mindshare, of supporting dominant standards, and from offering a trial product are demonstrated. Last, a negative price shock is also identified in the period after a well-known, free-pricing rival has entered the market. Nonetheless, network effects continued to remain significant during the period. These findings enhance our understanding of software markets, offer new techniques for examining such markets, and suggest the wisdom of allocating resources to develop advantages in the factors studied.

Factors Affecting the Adoption of an Internet-Based Sales Presence for Small Businesses

The Internet has doubled in size every year in recent years and now spans the globe, facilitating the exchange of all matter of digital data. Recent development has been categorized by an explosion in new commercial activity. Despite overwhelming coverage in the popular press, relatively little is understood regarding the impact the Internet is having on firms that use this medium to facilitate commerce. Even less is understood about the impact on small enterprises-the largest segment of U.S., Japanese, and Western European businesses. This article reports the results of an exploratory study examining critical issues surrounding the use of the Internet in emerging enterprises. The survey (1) describes how small businesses develop and use their on-line sales presence, (2) explores factors that motivate firms to invest in electronic commerce, (3) assesses the importance of the expected benefits of an on-line sales presence on the decision to go on-line, and (4) examines some of the barriers that prevent sma...

Revenue streams and digital content providers: an empirical investigation

Abstract There is tremendous confusion among practitioners regarding the relationship between various potential online revenue streams and the performance of a firm’s online efforts. Such questions are of particular interest to firms that provide information goods, due to both the unique characteristics of such goods and the fact that such products are increasingly offered free by online providers. Using the magazine publishing industry as a context, this paper provides an empirical exploration of various revenue streams and relates them to manager assessment of the performance of the firm’s online efforts. These results present, to the authors’ knowledge, the first empirical exploration of the link between the performance of an online effort and various revenue streams pursued.

E-commerce and the undulating distribution channel

Understanding the role of e-commerce in restructuring distribution channels by examining the factors influencing the collapse, shift, and expansion of channels.

Business process digitization, strategy, and the impact of firm age and size: the case of the magazine publishing industry

Abstract Despite increasing interest among researchers and practitioners in the field of Internet commerce, significant controversy remains regarding the large incumbent versus nimble newcomer dynamic. This paper explores issues related to firm age and size and the firms propensity to engage in Internet-enabled process digitization by conducting an empirical investigation based on a sample of 150 firms in the magazine publishing industry. Results suggest that (a) differences exist as a function of firm age and size in the degree and manner in which firms digitize business processes through the Internet, (b) Internet-enabled digitization of business processes is associated with both strategies of innovation and of low cost, and (c) the digitization–strategy relationship is stronger for new versus established firms and for smaller versus larger firms.

Viewpoint: challenging the new conventional wisdom of net commerce strategies

A fter years of hype, significant confusion exists among scholars and practitioners regarding expectations for e-commerce market development and the selection of effective Internet commerce strategies. Adding to this confusion is the realization that several assertions in the early stages of Internet commerce have not materialized as predicted. Lessons from the several billion dollars in Internet commerce that have taken place provide the hindsight necessary to challenge a number of popular assertions—the new conventional wisdom— regarding business strategy and its relationship to e-commerce.

Strategic Orientation, Competition, and Internet-Based Electronic Commerce

This paper investigates the relationship between strategic orientation, competition, and Internet-based electronic commerce. We propose that firms use the Internet to support their strategy, and in a manner that will help them compete in their environment. We use technology policy and entrepreneurial orientation as examples of strategic orientations, focusing on (a) the extent to which linkages exist between these orientations and conducting business activities over the Internet, and (b) whether these linkages vary as a function of the competitive intensity of the environment in which the firm operates. Analyses are based on a sample of 150 firms from the magazine publishing industry. Our results show that the more aggressive the technology policy and the stronger the entrepreneurial orientation, the more the firm uses the Internet to conduct business activities. More important, the competitive intensity of the business environment moderated these relationships: Technology policy and entrepreneurial orientation were associated with the use of Internet-based electronic commerce under high levels of competitive intensity, but significantly less so under low levels of competitive intensity.

Information Technology Choices in Dissimilar Cultures: Enhancing Empowerment

Empowerment is an important and desirable state for employees within business enterprises around the world. Yet, the pursuit of empowerment across national boundaries may vary due to innate diferences within cultures. This may be particularly true with respect to choice of technologies for achieving empowerment. Using an interpretive field study of Fellows within the Japanese MITI and U.S. Department of Commerce Manufacturing Technology Fellowship (MTF) Program, this study suggests that the achievement of empowerment through choice of information technology is matched to cultural context. Specifically, employees of Japanese companies prefer, need, and use media-rich information technologies in their efforts to achieve empowerment. In contrast, employees of American companies prefer, need, and use collaborative information technologies in the pursuit for empowerment. These findings suggest that information technology is used synergistically with cultural attributes in the enhancement of employee empowerment.

Software Outsourcing in Vietnam: A Case Study of a Locally Operating Pioneer

This paper explores the following question of key interest to researchers and practitioners concerned with offshore IS outsourcing in developing countries: How are potential offshore partners operating in developing nations to mature to be considered more attractive to suitors? Indeed, for firms located in what Carmel (2003) refers to as Tier Four, or less developed IS producing and exporting nations, an advancement to become a strategic partner challenges conventional wisdom and theoretical expectations. However our work has identified a firm that has become a strategic partner despite being headquartered in a Tier Four country. In exploring this question and examining our exemplar firm, the paper makes three key contributions: First, the contemporary context for offshore outsourcing in a Tier Four nation (Vietnam) is explored, illustrating the nations advantages as well as key challenges that limit expansion. Second, against this backdrop we offer a case study of a successful strategic partner that has emerged despite being headquartered in a Tier Four nation. A theory‐grounded analysis of the firm, Glass Egg Digital Media, provides a lens for identifying success factors that enable firms in developing nations to emerge as strategic technology outsourcing partners. Finally, we end by exploring how existing models for considering firm attitudes toward offshore outsourcing can be expanded and we highlight potential areas for future research. Our work demonstrates the important interplay of firm, industry, and national factors in enabling a firm operating in a Tier‐Four nation to make the leap to strategic partner.

Choosing a Client/Server Architecture: A Comparison of Two-and Three-Tier Systems

The architectural design of a client/server system affects the initial development cost, day-to-day transactional performance, ongoing maintenance costs, and long-term flexibility and scalability of the application. The choice between a two- and three-tier architecture should be based on the scope and complexity of a project, the time available for completion, and the expected enhancement or obsolescence of the system. A three-tier architecture requires more planning and support than a two-tier architecture, but it offers advantages in openness, flexibility, scalability, and integration.