I am increasingly concerned with the possibility that the SHA1 algorithm, that is at the heart of e-commerce, may be on the verge of succumbing to the relentless march of Moore’s Law.
A very convincing calculation by Jesse Walker (shown in Bruce Schneier’s blog), estimates the cost of a single collision attack to fall bellow $200,000 by 2018, and below $50,000 by 2021. This simply means that a determined hacker with a strong financial motive will soon be able to launch a successful attack on 99% of all organizations that engage in online commerce.
I just read Wharton Professor Pinar Yildirim’s article on how Facebook can potentially monetize Instagram without alienating its user base (too much).
Prof. Yildririm makes sense. He basically says that major options for Facebook include:
- a subscription-line service (think Dropbox or Flickr) where photo album space is only free up to a point
- advertising, including location-based or contextual ads
- selling users’ content, but with explicit user consent and by sharing the revenue with them
I think there is a fourth option that makes more sense for Facebook: don’t monetize Instagram.
I think Facebook is already walking on thin ice with many of its users. Adverting on the website and on its mobile apps is becoming increasingly noticeable and intrusive. The company is approaching what much of its user base is willing to take. Not monetizing Instagram would move that line a bit further away.
Facebook should consider Instagram as a billion dollar product feature that makes its core product that much more attractive to users, and restores some of the users’ goodwill that the company has squandered. Not monetizing Instagram is actually the best way to monetize it.
I posted as a guest blogger at the Hellas Direct blog. I am excited about what this talented team is up to and I’m looking forward to writing about them as a success story.
In the first part of the post I commented on borderless software development. Coming up in the second part, the “outsourcing of prediction algorithms” and the “platformication of products”.
More at the Hellas Direct blog
[This is based on a recent presentation I gave. You can grab the presentations slides here.]
Cloud computing offers well documented benefits to firms, governments and, though indirect and induced effects, to the entire economy. However, for start-ups, cloud computing is not just a welcome boost to the bottom line, it is what can make the difference between spectacular success and oblivion.
There has emerged today a new breed of start-ups that employ cloud based collaboration, cloud based delivery of services and cloud based product development. Their founders embrace the cloud to run a nimble, lightning fast, and borderless company.
How do these firms embrace the cloud? A good example is Recruitment Genius, the London-based start-up that allows employers to fill job openings with rock-bottom prices. The front page of their website boasts filling 40 jobs for the retail chain Tesco, for less than £200. Recruitment Genius manages to stay profitable at these prices, only by having a highly automated (frictionless – according to zdnet) process that covers everything from the initial job post by the employer, to the display in selected job boards, to the collection and filtering of promising CVs, and finally to the delivery of the top leads to the employer. How does Recruitment Genius does it?
Those of us who have waited for hours in line in Sina Road in Athens to buy a railroad ticket to Thessaloniki, the introduction by OSE (ΟΣΕ- Hellenic Railways Organization S.A. and its subsidiary Trainose) of an online reservation system last year must have seemed like too good to be true, coming from an organization who is single-handedly responsible for a sizeable portion of Greece’s debt and still owes about 8 billion Euros to the Greek state (link to company’s unofficial blog in Greek).
Last week’s article in New York Times about Carrefour (Carrefour Rethinks Its ‘Bigger Is Better’ Strategy) is the perfect argument in favor of the view that there is no substitute for a sound strategic analysis of the competitive environment.
The gist of the story is that Carrefour bet heavily during the last decade in expanding the average store size from 8,927 square meters in 2000 to 9,647 square meters in 2010, going against the trend of more compact hypermarkets that its competitors preferred. Carrefour judged that online commerce is too small in total size to be of any serious threat to its business. But, as usual, the devil is in the details: the added capacity was primarily used to offer non-food items that represent infrequent consumer purchases, exactly the type that is increasingly being sold online. Predictably (in retrospect), the extra capital investment was nowhere near as productive as Carrefour would have hoped, costing the company in market capitalization and probably costing the CEO his job.
Those of us that think and do research about Information Systems Strategy, should never forget that as important as network economics and IT-enabled strategic resources are, a proper analysis of the competitive environment, including substitute products and services, is the one step we can never afford to miss.
Photo by Kees van Mansom (flickr) Attribution-NonCommercial licence