MySQL, Google, Electronic Arts - Essay Example

?Cases write up Case question MySQL) Open source business model is used by software technology industry. The companies which develop different software for individual or commercial use generally make huge investments in research and development of the products. The software developers write source codes that are proprietary documents of Software Company of closed source. These source codes contain company’s business model, which consists of complementary products and license fees for the use of the software and services. After 1990, worldwide software companies discovered a new phenomenon called open source business model, and they started developing and distributing open source software. These types of software are distributed free both for private and commercial use. MySQL is the world’s most popular Relational Database Management System. It provides multi-user access to, and runs as a server of, a number of databases. MySQL was first released in 23rd July in 1995 by three Scandinavian founders, Axmark, Larsson, and Widenius. The company was incorporated in 2011 as MySQL AB in Uppsala, Sweden (MySQL, “About MySQL”). MySQL used open source business model and used it as a viral marketing vehicle for penetrating in the global information technology market. For its open source status, it has gained a higher extent of visibility among the software developers community, including individuals and companies. Using the open access model, MySQL made available its products under a dual licensing policy allowing anyone to download them under GPL and use them for individual or commercials purposes. They required no fees for the use, and commercial users can purchase them at the minimum price, much lower than competitive market prices of other database management systems (O’Reilly 8). The company started commercializing and distributing the product with non-open source software, which includes a warranty from MySQL AB and came with the development support from the company. There was a driving force behind the open source business model of the company. It was the valuable support which the company received from those companies that noticed MySQl as a good business opportunity for their existing business line-ups. Open source business model helped the company to lower its cost of production and distribution. This type of business culture allowed MySQL to become a virtual organization. 120 employees of this organization are scattered across 17 countries across the world, and they efficiently communicated with each other through email and other means of internet communication. It can be stated that this model has provided the company with effective global penetration at a very low cost of operation. MySQL marketing strategy was developed based on the open source business followed by the company. The strategy was to supply a better product at a lower price. Its goal was to penetrate global information technology market to develop a positive distribution network trough a wide installed base (Krishnamurthy 11). This strategy of open source business model helped the company to achieve a tremendous growth in its specific segment of target customers. Thus, open source business model has eventually superseded more traditional business models, and the companies that implemented this model enjoyed higher demand of their open source products. Case question 2 (Google) Google is recognized as the most successful and innovative business in the current internet-based business world. Microsoft has proved its rapid growth through innovations in the sphere of computer technology, whereas Google has showed its innovation in information technology, analytical decision-making, efficient product development, experimentation and other types of relatively unusual and uncommon ways of innovation. Google has been successfully balancing innovative ideas, evaluation methods, and the use of advanced technologies for the evaluation of innovative ideas. Google has made itself recognizable as a leading exponent or a creator of new approaches for innovation-based business and management. Google had a tunnel vision at an earlier stage of its business when the company predicted that internet-based technology can dominate the future technology world, and became an early adopter of such a technology. It has legendary infrastructure of information technology, which is the strength of the company. Strategy and technology are the two core factors of Google’s business, which are inseparable and even mutually permeable at Google. In the last one decade, it has proved that technology can also stimulate the strategy development process for the growth of the business. Two main attributes of Google are a massive infrastructure of information technology and its category killing search engine, which are really hard to emulate by others (Faghani 12). The company has well architected advanced information technology to develop organizational and cultural strategies. Through implementation of advanced technology based on innovation, Google has proved that technology can be used not only for supporting a business but also for increasing the worldwide use of internet and information technology. Thus it engendered a strategic opportunity for the growth of the company. A sustainable business model should always focus on the development of the industry and environment, fruitfulness of research, and development of the company in a society. Google has just creatively used the existing innovations, queries, information and technology advancements made by others and continues doing this. On the other way, its products and services are integrated by the free users and paid customers of the company. It has developed an ecosystem where the company is benefited by providing benefits to others. The best example of this is the information search and availability of any kind of information. But the key sustainability factor is the Google’s ecosystem, where free benefits of its advanced and innovative products and services are used by the millions of users daily (Teece 181). Millions and millions of people use the company’s major products, such as the search engine, mail services, and many others, for free. Google has become a universal platform to the advertisers, content providers, global consumers and also innovators outside the company (Clemons 20). All of these major categories intangibly benefit others and are benefitted by them through a sustainable global business platform – that is Google. Case question 3 (EA) Electronic Arts is the world’s leading video game producer and publisher. The company was founded by Trip Hawkins in 1982. It has become the world’s third largest gaming company according to its revenue. Earlier, video game industry was a hit-driven business, as companies could only generate huge revenue if video games became hits in the gaming market across the world (Seal, “Gaming Industry”). EA is the only firm which became very profitable by releasing few blockbuster games, and no other company in the world has produced more blockbuster games than Electronic Arts. In 1998, six releases of the company were sold more than one million copies each; few years later it published 22 games, and each of them was also sold in the same amount. Then the company started only blockbuster releases of video games as only blockbuster games can stimulate the revenue of a video game company. The revenue of the company grew by more than 435% during this pick era of the company’s success (EA, “About Electronic Arts”). Few years later, top management of EA realized a major possibility of decline of the gaming industry at that time due to the change in the trends of the gaming market and customers’ tastes and preferences. Therefore, EA concentrated on the valuable resources like research, development, and marketing of video games. These two are the only key factors of videogame industry that can produce attractive video games and also accompany their publishing with an appropriate promotion. They started renovating to develop a new strategy of releasing blockbusters. The top management of the company changed the company’s target segment from niche customers to the mass audience of teenagers and youths (Nuzio, “Targeting More Customers”). They highly concentrated on research and development for production of highly attractive games with unique and complex features, so that target audience does not want to play substitutes created by other brands. They started upgrading few blockbuster titles created earlier. The customers who highly enjoyed playing the previous versions of a game will surely buy the new version of the same title. It is nothing but stimulating of the existing customer base of the company, so that they do not shift to new releases of other companies. EA tested a new appealing concept by creating a small team that was given resources to develop a typical brief game. If the testing of the promo received a high appeal from the mass market, the team would start developing the full version of the game. This strategy dramatically reduced releases that did not bring much profit. The designers were motivated to stop using the traditional design to invent new thoughts and add complexity and innovations to the games. These strategies help the company to retain huge customer acceptance of the new titles and of the upgraded versions of previous hits of the company. Therefore, the company dealt with the elements of a realistic approach to competitive management and has been enjoying a monopoly market within its own huge customer base, though the gaming industry is highly competitive. Works Cited Case 1: Krishnamurthy, S. “An Analysis of Open Source Business Models.” faculty.washington.edu. University of Washington. 2003. Web. 26 July 2012. . O’Reilly, T. “Open Source Business Model Design Partners”. Eclipsecon.org. 2005. Web. 26 July 2012. . MySQL. “About MySQL.” Mysql.com. 2012. Web. 26 July, 2012. . Case 2: Clemons, K.E. “Regulation of Digital Businesses with Natural Monopolies or Third Party Payment Business Models: Antitrust Lessons from the Analysis of Google.” Law.northwestern.edu. 26 may 2010. Web. 26 July 2012. . Teece, J. D. “Business Models, Business Strategy and Innovation.” Econ.upf.edu. 2010. Web. 26 July 2012. . Faghani, H. “Business Model and Examples.” Gsme.sharif.edu. N.d. Web. 26 July 2012. . Case 3: Nuzio, A., et.al. “Electronic Arts.” Siena.edu. 18 April 2008. Web. 26 July 2012. . EA. “About Electronic Arts.” ea.com. 2012. Web. 26 July 2012. . Seal, Steven. “The Business of Electronic Arts.”personal.psu.edu. 2011. Web. 26 July 2012. . Read More