BIG DATA

So, what is it?

It is data that exceeds the processing capacity of conventional database systems. It is too big – terabytes or pentabytes, moves too fast, or doesn’t fit the strictures of your database architectures. The data is increasing at exponential pace – both structured and unstructured, and the technology is increasing according to Moore`s law which is helping the companies to store and process such huge amount of data.

What is it`s use?

 “Big Data” is drawing a lot of attention but for decades, companies have been making business decisions based on transactional data stored in relational databases. So, why the hype now? Beyond that critical data (transactional), there is a potential treasure trove of unstructured data: weblogs, social media, email, sensors, and photographs that can be mined for useful information, and understanding of this kind of data needs more than just storage and computing capacity, it requires advances in understanding of data, as this data is subjective and context depended. Eg. When a person posts “unbelievable” on a website regarding a product, we don`t know whether a person is satisfied or dissatisfied with the product. Big data can unlock significant value by making information usable at much higher frequency leading to better decision making.

Second, as organizations create and store more data in digital form, they are able to collect more accurate and detailed performance information on everything from product inventories to sick days, and therefore can boost performance. Leading companies are using data for forecasting to adjust their business according to the demand.              

                                                                                           

Third, big data allows more accurate segmentation of customers and hence better delivery of services. For example, retailers usually know who buys their products. Use of social media and web log files from their e-commerce sites can help them understand who didn't buy and why they chose not to. This can enable much more effective micro customer segmentation and targeted marketing campaigns, as well as improve supply chain efficiencies.

Finally, big data can be used to improve the development of the next generation of products and services. For instance, insurance companies know in advance which customers are likely to leave them in future and on what service aspect they should work on to stop that attrition.

New organizations like social media sites like Facebook and LinkedIn simply wouldn't exist without big data. Their business model requires a personalized experience on the web, which can only be delivered by capturing and using all the available data about a user or member. 

Characteristics of Big Data: 4 V`s of Big Data

Volume: It is the most attractive factor because of which companies want to analyze data as it leads to more accuracy for predictions. High volume of data requires scalable storage and distributed querying approach, along with high processing machines and statistical sampling techniques.

Variety: It is the most significant factor and ability to process the variety of information will determine the future of big data and analytics. Majority of data available is in unstructured form – from social network, text information, image information, audio and video. According to analysts 80% of the data is not numeric which is difficult to process directly into application but is extremely vital for decision making.

Velocity:  It is the rate at which data is being produced and processed to meet demand. The torrent of data being produced is through clicks on internet via computers, tablets and smartphones.

Variability: The flow of data is highly inconsistent and can be highly periodic. Example sales of crackers are more during Diwali and New Year as compared to the rest of the year. This periodicity of data is difficult to manage especially with social media involved.

Big Data Solutions

The kind of complexity involved due to unstructured data requires developing sophisticated algorithms and logic. It requires a combination of business, IT, math and behavioral sciences to define and systematically capture the insights from the data.

The technologies used to manage and help in extracting the information from data are SAS, SQL, Hadoop, parallel processing, clustering, large grid environments and cloud computing.  

Challenges & Future Outlook

As the amount of data being generated is increasing at exponential pace, it is getting ever more difficult to generate insightful information from it. Questions that seek answers from data scientists are which data to store? What to analyze? which data points are relevant? And how to make best use of it?

Another major challenge looming over the Big Data is the shortage of talent. By 2018, in US only there could be a shortage of 140,000 to 190,000 people having analytical skills and 1.5 m managers and analysts to make effective decisions from the analysis of data.

Other issues being faced by data collecting organizations are - capturing the complete and accurate data and policies regarding privacy and security.

If we can find a way to deal with all these challenges then the future of Big Data and analytics will be phenomenal especially in industries like computer and electronic products, information sectors, finance and insurance. 

References:

http://www.mckinsey.com/insights/mgi/research/technology_and_innovation/big_data_the_next_frontier_for_innovation

http://www.sas.com/big-data/index.html

http://www.oracle.com/

-Abhishek Arora

MDI 2012-2014

SOA – Service Oriented Architecture

Service simply put is a Component capable of performing a task 

What is Service Oriented Architecture?

Service-oriented architecture (SOA) is a set of principles and methodologies for designing and developing software in the form of interoperable services. These services are well-defined business functionalities that are built as software components that can be reused for different purposes. SOA design principles are used during the phases of systems development and integration.(Wikipedia)

Understood …No!!! … Neither did I at first … so here is an example

Suppose we are in a business and we have different departments in our organization. In the initial years our business functionality is limited, thus the use of programs is limited but as our business grows the use of programs increases i.e. the number of business processes is increased to process the information more efficiently and quickly. Secondly since the business processes are all linked to one another thus a lot of time is spent in integrating the data for the functioning of the whole business process. Moreover some of the individual parts of the business processes perform the same function. So if any change is made in one part of the process you have to make changes in all the other processes too so as to have standardization of processes all over, meaning a lot of wastage of time as well as a lot of cost to the company. Now this is where SOA comes into picture. In SOA we break down our business process into services. Some services come out to be same and some different. Whenever we want to use a process we pick up those services only, merge them and use them i.e. we make simple modules and use those modules only whenever required. This structure is based on SOA. Rather than focusing on the complete package we use simple modules as per our requirements.

Thus SOA is a set of guidelines, policies and practices which gives us a service orientation to the business process. This architecture has a lot of advantages.

Advantages of this Approach:

• Reusability: Existing business functionality in an application can be reused to meet new business requirements. A business process is decomposed into discrete reusable functional components
• Interoperability: Communication between services and the business process is not dependent on the platform and are standards enabled. The services are also not tightly coupled to the application.
• Scalability: Applications are flexible to the changing business requirements
• Cost Efficiency: This is highly cost efficient as integrating the business resources is standards based. Instead of integrating the whole business process we are integrating just the services.

CBDI defines SOA as a style resulting from the use of particular policies, practices and frameworks that deliver services that conform to certain norms.

In simple words talking about business its dividing your business core functions into small services so that you can incorporate in your business adaptability so that environment/technological/economical or political changes in the environment does not increase your costs. Also you have an added advantage of flexibility as well as interoperability which helps decrease your integration costs.

For a more detailed description of SOA check out the mentioned link:

http://www.youtube.com/watch?v=nRayJZmj2oY

-Ishan Chawla

PGPIM

MDI 2012-14

Enterprise Social Media

Today social media has penetrated into every aspect of our day-to-day lives. The use of social media is no longer inhibited to just making friends and keeping in touch with them, it’s much more than that. It sparked the revolution in Egypt. It acts as a knowledge sharing platform. Companies are today leveraging social media for market research, promotions, building online reputation, providing customer service, getting customer feedback, brand monitoring, academic collaboration etc. According to a Nielsen survey, time spent on social networks is up by 82%.

Enterprise Social Media (ESM) is also one of the many applications of Social Media. It is a relatively new concept but it is slowly gathering speed. The idea of ESM is to bring the power of social media within your company - a free, private and secure social network just for your business. It allows your coworkers to work together and be more productive. Organizations now agree that the question is no longer whether to adopt social media or not but to leverage it to remain competitive. Enterprise social networks enable organizations to reap the benefits and improve innovation, decrease costs and also drive top-line growth. Organizations have increased their spend on social media as suggested by the below chart:

Change in Social Marketing Budget from 2009 to 2010, by Industry Sector

A very good example of an enterprise social media tool that I came across was “Chatter” developed by SalesForce. They claim that it reduces the number of meetings in your organization and thus saves your time, reduces the number of emails sent, improves customer responsiveness, collaboration and helps manage customer information. To learn more about chatter please visit: https://www.chatter.com/why/

IBM has also entered the world of ESM through its Lotus Quickr and Lotus Connections technology. In a survey conducted by CompTIA (Computer Technology Industry Association), respondents were asked to identify the top benefits of social media tools.  The top five benefits identified were:

•          Better communication with customers
•          Cost Savings
•          Brand positioning
•          Real-time customer satisfaction
•        Potential lead generation

To just give you a glimpse on how ESM can be leveraged watch the video posted below:

However, organizations have to guard against being reactive. Firms trying to catch up on the social media buzz without having a clear idea of their identity or goals are fraught with risks. Deloitte has come up with an Enterprise Social Media Framework which provides a good starting point for organizations before they launch their social media initiative. A firm typically starts by asking questions clubbed under 6 areas:

      1.       Strategy

a.       What is your vision and strategy regarding social media?

b.      What value creation opportunities exist?

      2.       Program Management

a.       How do you execute your social media strategy?

b.      What is the project roadmap?

      3.       Communications

a.       What are the communication best practices for social media?

      4.       Change Readiness

a.       What are the special cultural factors to consider in your organization?

b.      What type of learning programs should be prepared?

      5.       Technology

a.       Which tools should be used?

      6.       Governance and Support

a.       What risks are associated with the use of social media, and what are the policies needed to govern the use of social media within the organization?

According to a Gartner article (“When Social and Business Processes Collide”) by 2015, 40% of large organizations will have a corporate “Facebook” to enable greater collaboration and circulation of both business and personal data. With the increased globalization and internet savvy workforce, an Enterprise Social Network is a “must have” for organizations. It will not only lower infrastructure costs but also improve employee effectiveness and efficiency.

To learn more about the use of ESM please go through:

http://www.infosys.com/FINsights/Documents/pdf/issue9/social-media-financial-services-risk-reward.pdf

References:

Enterprise Social Media: Exposed and down to earth – Deloitte

Redefining the Social Enterprise Network – Enterasys Secure Networks

Social Networking in the Enterprise – Forrester Consulting

https://www.chatter.com

http://www.itworld.com/it-managementstrategy/260136/top-5-business-benefits-social-enterprise-tools

http://www.forbes.com/2010/08/19/salesforce-microsoft-internet-technology-chatter.html?partner=contextstory

-Rahul Mukherjee

MDI 2011-13

Captive or Outsourcing - What suits your business?

Captive is basically a service model (a type of Business Process Outsourcing) where an organization invests and develops its own subsidiary rather than investing in a Third Party vendor. The benefit of such an arrangement is that organizations are able to leverage the cost savings of offshore resources, while having complete authority over the center. It also allows them to build domain/knowledge capital over time. However, running a captive data center involves huge infrastructure cost in terms of land, buildings, servers and networking equipment, security personal, power and generators cost, electronic surveillance. Apart from these, complexity costs like installation, maintenance and monitoring requires highly skilled technical professionals, data protection and software experts, data warehouse and storage experts, etc.  On the other hand you have Third party vendors who have all the infrastructure set up and can provide you the required service efficiently at a much lower cost. Citigroup, Unilever, Deutsche Bank, Dell etc. are few of the Fortune 500 companies who have shut down their captives in recent years. Some 60 per cent of all such captives fail to meet expectations. Third party offshore outsourcing industry, particularly in India, has reached a maturity level that one wonders why a company would take the hassle of setting up their own shop abroad.

And yet the Captive Center lives on. According to NASSCOM there are more than 750 multi-national companies with captive centers in India. The captive centre market has grown to $11.1 billion in annual revenue, which represents a 300% plus growth since 2003. According to international Data Corporation (IDC) India, Captive Centers are expected to grow at CAGR 16% in next two years. MNCs like MetLife Inc. started its captive center in India three years back and currently employs close to 2500 employees. Indian banks like SBI, ICICI Bank, PSB and Bank of Baroda have their own data centers. BSNL, Bharti Airtel, Reliance Communications and Tata Communications are the leading telecom operators that have captive data centers. How have the captive centers managed to survive when it makes absolutely no business sense to invest in one? What are the driving forces that make a company opt for a captive delivery center rather than outsourcing? 

Captive Model

Drivers:

Control over operations

Companies prefer to keep a very tight control over the sensitive matters of their business, like new product launches, product costing data, engineering data, etc. Since captive center model enables them to have complete operational control and transparency, it is preferred over other models.

Reduce Cost

When companies have ambitious and aggressive plans for offshoring and would like to do it on a large scale, they would like to retain the 'economies of scale' and set up their own centers. Companies already having an existing set up in the low cost region would prefer to extend these centers to support engineering activities as well.

Knowledge Transfer and Retention

Some companies believe that best knowledge repositories are their own people who have worked in the organization for several years and have been part of multiple product launches. So companies prefer captive centres where they can leverage the knowledge of their employees to train new employees and thus retain the knowledgw within their organization.

Strengthen their presence in local market

Companies want to establish a strong foothold in emerging markets like that of China and India. local presence will enable these companies to understand customer prefernces well and they can leverage the local resources to bring products faster and cheaper to the market.

Data Security

Insurance and banking companies are extremely sensitive about customer data. These companies deal with account details, social security numbers etc. of their customers which if leaked can result in severe penalties and lawsuits. Naturally, companies would prefer having their own captive centers.

Challenges:

Lack of Scale

Scale of operations is the most important parameter determining the success of the company.

Higher than anticipated costs

Many companies don't pay premium salaries to attract top talent in their captive units.Desperate to scale up, captives often pay well above market rates throwing the entire cost model out of order. This is a serious demerit of the captive model especially hurting the start-up units which operate on a shoe-string budget.

High Attrition

High attrition is a major deterrent which kills productivity and at the same time destroys morale of the resources. Industry statistics show attrition at captive centers is almost twice as high as the average rate for the third-part providers. There are several factors that drive attrition. 

There is sense of lacking as far as career path opportunity is concerned, especially at smaller captives

Second-class-citizen status

In many cases off-shore teams at the captives are considered as second class employees doing uninteresting work that is not important to the main function of the organization

Managing Attention Wanes

The management team is initially excited about the captives. But it is generally observed that the management support and the enthusiasm are very short-lived. It is highly essential for the captive model to be experts in managing their operations without diverting attention from the core focus of the company.

Poor Development Process and Integration

Many captives face a lot of difficulty in establishing strong development processes. Ability to integrate rigorous procedures like CMMi, Six Sigma and other measures into practice are seldom found in the captives. Further they often lack proven processes for knowledge transfer and collaboration.

Perception Change

Due to heavy startup costsand the lead-times involved in showing the ROI and tangible results, captive centres develop an image of a cost center in an organization. To change perception within the parent organization from being a 'Cost center' to a 'Profit center' would be a challenge.

Key Reasons for failure:

• Lack of vision and focus from the parent company
• Thrust on short term goals and to show quick benefits
• Inability to attract, develop and retain talent in local markets
• Trying to maximize benefits from labour arbitrage rather than focus on building a value chain in these centres.

Outsourcing Model

Drivers:

Shorter lead time to get started and to get results

Since vendors have an established setup they can provide a quick start and have the ability to ramp up operations quickly

Companies have the option of doing a pilot execution before any large scale operation

Upon successful piloting, companies can choose to strengthen the vendor-partner relationship to support the large scale operation or set their own captive operations

No large upfront investments required

No wind-up hassles/costs involved

Challenges:

Domain Skills and Knowledge Transfer

For engineering companies finding vendors with core domain and technical expertise is very difficult. under such circumstances, companies would have to invest a lot of time and money to ramp up the knowledge levels of their vendor partner

IP Protection

Companies believe that it is risky to carryout core engineering activities with vendor partners due to fear of losing IP.

Data Security

Companies in insurance and banking sector are very sensitive about their customer's data. Any misuse of such data can lead to heavy penalties and lawsuits.

Having seen the drivers and challenges of both service models, a company should choose the model that fits their short-term and long-term plan best. The decision to select an off-shore model should be based on the Total Cost of Ownership. If a company is opting for Captive Service Model, it should assess its strengths and weaknesses w.r.t. the country where it is planning to establish the center. Management support, Infrastructural facilities, Government policies etc. are some of the key points to be taken note of.

On the other hand if a company is opting for a Third Party Vendor, it needs to assess its partner from various perspectives and narrow down to the best choice. However, going ahead I believe that a blend of these two service models is what will suit the business best - a hybrid model where service providers complement the operations of the company. For example, a service provider can help in setting up the captive center initially using its own resources. Once it is setup, the service provider along with the parent company can start recruiting talent and train them. Once the processes are established and the center is stable, ownership can be transferred to the parent organization. The service provider can take the role of a consulting partner after transfer of ownership. There can also be a scenario where a company opts for a service provider and within the Third party's premises sets up its own personal space to handle sensitive data and key processes. In fact this is something that is already in practice e.g. Microsoft has Offshore Development Centers (ODCs) within Infosys premises. The costs of operating the ODC like electricity, maintenance, employees etc. is borne by Microsoft.

According to Eric Simonson, managing principal of the Everest Research Institute, an independent research and analysis organization on taking a sample of captives, you might find that a fairly high number are struggling. But if you weight it and look at the larger and more mature organizations, the number that are struggling is dramatically less. Many of them that are struggling are less experienced companies that have come to the market more recently. So some are in the early stages and experiencing growing pains, others might have been late adopters to begin with and maybe not as adept in understanding offshoring or the culture in which they are operating. So yes, it's right that a fair number of captives are struggling. But if you look at where the work is occurring, the mass will tell you a different story.

(you can read the complete interview at http://www.itbusinessedge.com/cm/community/features/interviews/blog/captives-vs-outsourcing-combining-approaches-may-be-best-answer/?cs=22760)

References:

Offshore Models for Engineering Product Development: Captive Center vs Vendor Partner - Vijay Machigad, KNS Acharya (White Paper)

http://www.cio.com/article/149154/Total_Cost_of_Ownership_Comparison_of_Outsourced_Versus_Captive_Solutions_for_Capturing_Outsourcing_Value

http://community.forrester.com/thread/3993

http://articles.economictimes.indiatimes.com/2011-04-21/news/29459331_1_captive-centre-captive-units-offshore-vendors

http://www.iit-nearshore.com/captive-vs-outsourcing.html

-Rahul Mukherjee

MDI 2011-13

Google Drive: Google joins the Cloud Wars

Google has blown the bugle in the Cloud Wars by announcing the launch of Google Drive on 24th April,2012.

"Just like the Loch Ness Monster, you may have heard about Google Drive. It turns out, one of the two actually does exist." This is how Google introduced the long-awaited Google Drive. Google Drive includes 5GB of free space while paid plans start as low as US$ 2.49 (Rs 130) per month for an additional 25GB. If you are already a paid subscriber of a Google storage plan for Gmail or Picasa, you automatically get 25GB on Google Drive instead of 5GB.

Like any other service on cloud, Google Drive can be used to store, share and sync files across devices. However, this service marks a significant change in Google's philosophy of making money. In the past, revenues were generated by selling ads online - search ads and graphical display ads.

Key Features: 

• Cheaper paid Storage: The price you pay per GB works out to a mere US$ 0.10 per month i.e., just Rs 5 per GB per month. 
• Plays well with other Google services: Can be used in conjunction with other Google services like Picasa & Google+ to transfer data. 
• Offers enhanced search: Search through your Drive using keywords or apply filters to sort data on the basis of file types. Google not only searches file names but the entire contents of each document for the search phrase. 
• Google Docs users get instantly ported: Google Docs is now a part of Drive. All files are instantly ported when you launch Drive for the first time. 
• No learning curve for the service: The interface of Drive is the same minimalist UI that Google Docs had. There's no need to learn a new system. 
• Supports multiple file formats: Drive lets you open over 30 file types in your browser window itself (including HD video and Photoshop files).
• Local Synchronization: Google has a program you can download and install on your PC or Mac that creates a synchronized copy of your files on your local hard drive. Files you add to Google Drive in the cloud (in your browser) appear in the drive folder on your local machine, and vice versa. Dragging a file into your drive folder copies it into the cloud. 
• Optical Character Recognition: Google scans the contents of PDFs and images for text and uses optical character recognition to convert the text to metadata you can search on 

Privacy Implications

However, a number of companies including 'The New York Times' have voiced their concerns about privacy and intellectual property implications of using Google Drive. By signing up to Google Drive, users give the tech giant a global license to use, host, store, reproduce, modify or create derivative works and to publish, publicly perform and distribute that content. In short you give Google right to do whatever they want to do with your data, one of those things being giving your information to law enforcement agencies without a subpoena. Google's terms-of-service agreement includes this language: "When you upload or otherwise submit content to our services, you give Google (and those we work with) a worldwide license to use, host, store, reproduce, modify, create derivative works (such as those resulting from translations, adaptations or other changes we make so that your content works better with our services), communicate, publish, publicly perform, publicly display and distribute such content." 

Competition 

Not to be left behind, Microsoft has released a similar synchronization program for its rival SkyDrive cloud storage service and it too syncs cloud folders with local ones. But Microsoft's syncing software does not work on ancient Windows XP machines. 

Dropbox revealed a couple of new features. One is an expanded automated photo/video upload service that includes most cameras, PCs, tablets, connected SD cards and smartphones. After images are uploaded, users can view them on the Web from Dropbox's new Photo Page. Dropbox's second feature is that a simple link now can be sent to non-Dropbox users to share a file or folder. With one click they can preview the file in a browser, whether document, photo or video, without having to sign up for Dropbox. They won't be able to edit or change it in any way while it is in that queue, however.

	Google Drive	MS SkyDrive	Dropbox	Apple iCloud
Free Storage	5 GB	7 GB	2 GB	5 GB
Maximum file size	10 GB	2 GB	300 MB via browser; unlimited if uploaded from desktop	25 MB for free accounts; 250 MB for paying subscribers
Pricing Plans	25GB- $2.49 per month; 100GB- $4.99 per month; 1TB- $49.99 per month. Maximum plan is 16TB for $799.99 per month	20GB- $10 per year; 50GB- $25 per year; 100GB- $50 per year	50GB- $9.99 per month / $99 per year; 100GB- $199 per year / $19.99 per month; 1TB and up- starts at $795 for five users	10GB- $20 per year; 20GB- $40 per year; 50GB- $100 per year
Desktop apps	Windows and Mac (free)	Windows and Mac (free)	Windows, Linux and Mac (free)	Windows and Mac (free)
Mobile apps	Android (free), with an iOS version "coming soon"	iOS and Windows Phone (free)	Android, iOS and BlackBerry (free)	iOS

Which cloud service to use is the prerogative of the end-user/business however, the decision should include a lot many factors rather than just comparing specifications and prices. Its better to invest some time in a service and find out which one suits your needs better and then go for an upgrade.

Also read :

http://news.cnet.com/8301-1023_3-57419024-93/google-drive-its-slick-integrated...and-not-exactly-free/

To get a Hands On experience read:

http://www.techradar.com/news/internet/web/hands-on-google-drive-review-1077614

-Rahul Mukherjee
MDI, 2011-13

Online Reputation Management

In this post we will try to explore the concept of “Online Reputation Management”. The purpose is to introduce you to this concept and give you a quick overview.

Online Reputation Management (ORM) as the name suggests, is the art of monitoring information flow on the internet of a person, brand or business with the purpose of decreasing the visibility of negative content and promoting positive or neutral content. In today’s era, anyone with a device connected to internet can post information, reviews and comments about you or your brand on dozens of highly visited online destinations. Businesses can no longer afford to create a website and assume that prospects will learn about the company solely from there.  Your customers are online and not just looking at your Website and Facebook page for information about your company. What took you years to develop in local reputation can be brought down in a day with negative commentary. Therefore, it pays to protect your brand where ever consumers are offered a degree of interaction. It is imperative that businesses actively participate in ORM especially when the battlefield has shifted online. ORM is not only about responding to the negative; it’s equally important to amplify the positive.

Some of the ways to get started on a reputation management program are:

What’s Buzzing?

Before you turn negativities into a positive spin you need to find out what’s being said about you, your company, its products and services. Google lets you set up custom searches on Google News for any phrase. When you subscribe to this search through RSS or e-mail, you receive an alert anytime this search phrase shows up in the news feed. To monitor closely what’s being said online in real time use Twitter’s search.twitter.com feature

Participate in social media

One of the best ways to fight negative comments is to make sure that there is lots of positive content showing up for searches of your name or company. Having a frequently updated blog, well written Facebook and LinkedIn profiles, submitting articles to article directories can help you ensure that there is substantial positive content attributed to your name

Employ social search engines

Claim and enhance your business listings on search engines such as Yelp, InsiderPages, CitySearch and JudysBook. These sites enhance your business listings and allow users to rate your services and write testimonials

Build your reputation

Off late, a number of sites such as Naymz.com and RepVine.com have been launched with the purpose of allowing you to build an online reputation by inviting people to write reviews about you and your work. LinkedIn also allows and encourages this practice

Encourage Brand Evangelism

People tend to complain more often that congratulate, however that doesn’t mean they don’t like sharing experiences. They just need a little encouragement. Create brand evangelists by giving them incentives to spread good news about your brand

A good example of ORM could be the campaign done by Chevy for Tahoe. In March 2006, Chevrolet ran a social media promotion where consumers could create their own ads for the new Tahoe. Anti-SUV activists took up the call, creating ads that portrayed the Tahoe as a gas-guzzling monstrosity that caused global warming and destroyed the environment. These negative ads became popular and quickly began making the rounds on YouTube. Instead of pulling these ads , Chevy openly acknowledged them on the company’s blog, dealing with the issues brought up in the ads and highlighting the new Tahoe’s good qualities, such as the fact that it gets 22 miles per gallon, can run on ethanol and has a high safety rating. By keeping the dialog open and addressing these legitimate concerns people had with their product, Chevy was able to turn a potential negative into a positive. ORM means addressing your consumer’s concerns and showing them how your company is striving to make things better.

-Rahul Mukherjee

 MDI, 2011-13

Facebook Credits - An Overview

Facebook Credits is a payment system that allows users to purchase items in games and non-gaming applications on the Facebook Platform. One US dollar can get you 10 Facebook credits. Currently, Facebook credits supports more than 80 payment methods in more than 50 countries. It provides users a consistent way to buy on Facebook across mobile, desktop, games as well as non-game apps. Developers get 70 percent of all revenues earned through credits while the remaining 30 percent goes to Facebook. In March 2011, Facebook created an official subsidiary to handle payments namely, Facebook Payments Inc. In September 2010, Zynga announced that Facebook credits would become the exclusive payment method for all games developed by it and hosted on Facebook.

Let’s have a look at the benefits of Facebook Credits from a business perspective:

• It gives you access to an approx. 1 billion person marketplace
• Simplifies purchasing of virtual goods
• Secure payment and billing environment
• It provides you an effective mechanism to convert fans into paying customers of premium or exclusive services
• Gives access to a growing base of merchants who reward customer loyalty and buying with credits. The concept is similar to that of airline miles
• A common currency, thereby consolidating virtual currencies across multiple providers

However, like all new business models Facebook Credits has its fair share of growth inhibitors:

• The 30 per cent transaction rate is considered too high by most of the content providers given the fact that the market still has to determine the ROI
• What if Facebook loses its charm and users switch to other social networks
• Any breach in privacy or security , could create a major resistance for usage of social network for commercial purposes
• There is a group of users who believe that new features like Timeline and news feed advertising are too invasive. This may cause those users to exit the platform. It remains to be seen if Facebook managers to restrict the size of this group and keep the users contented

Facebook credits also find application in improving Ad Performance. It has been found that given two ads – one featuring a discount offer of say $10 and another rewarding the customer with Facebook credits instead of monetary discount, the user is more prone to select the ad that provides Facebook credits. Many studios like Warner Brothers, Universal etc have started deploying movies through Facebook. Users can now buy movie shows online through Facebook credits and invite upto five friends to watch the movie online together.

The benefits are many and like anything new challenges are galore but this model has far reaching implications. Let’s see how it all pans out.

-Rahul Mukherjee

 MDI, 2011-13

Social Gaming

In the Social Gaming context, 2011 will be remembered as the year when Google launched Google+, Facebook credits was launched after the beta stage and the social network game developer Zynga filed for its IPO. With its IPO, a first in the social gaming arena, Zynga expects to raise upto $2 billion to fund its global expansion. Meanwhile developers are still navigating through the Facebook credits model. At the same time Google is pulling out all stops in its effort to launch a serious competition to Facebook as a social gaming platform in North America since the demise of MySpace. In this blog we will take a look at some statistics pertaining to the social gaming industry, browse through Facebook Credits and speculate on the future of social games.

The recent statistics and trends suggest that the social gaming industry is on an exponential growth curve. The US social gaming market is expected to blow past $5.5 billion in 2015.

Source: Morgan Stanley

The Nomura Research Institute says that Japan’s social gaming market will likely be worth 393.5 billion yen (US$5.1 billion) in fiscal 2016, roughly doubling in size when compared with 2011.

Source: Morgan Stanley

In a recently released report Deutsche Bank predicted that China’s social network gaming revenues will double by 2011, reaching $3.5 billion. According to a study done by business and consulting firm Pearl Research, the online games market in China was expected to cross $8 billion by 2014. Although the Chinese gaming market experienced a slow growth initially in 2010, but by the end of the year it had rebounded to 25 percent overall growth, reaching $5 billion in sales. The bright outlook for Chinese gaming is bolstered by the fact that country’s top online game companies experienced another banner year of growth in 2010, led by gaming colossus Tencent, which saw revenue push $1.4 billion. Tencent was followed by Netease at $749 million, Shanda Games at $680 million, Perfect World at $374 million, and Changyou with $327 million. In February 2012, Electronic Arts (EA) announced that the popular franchise The Sims will move into China’s leading social network, Tencent Open Platform.

In India, Social Gaming is a relatively new phenomenon but one which has seen increasing popularity amongst Indians. As per a report by Ficci and KPMG, the social gaming market in India was Rs 240 crore in 2010 and expected to touch Rs 1430 crore by 2014. According to Ashish Khoria, Country Manager of MOL India, a leading payment service providers for online games, over 500mn people worldwide play social games and in India alone, more than 10 million or over 50 per cent of India's Facebook users play social games. Recently, online gaming company Ibibo’s CEO Ashish Kashyap announced that they aimed to increase their market share in the country’s social gaming space to 50 percent in the next two years, from 30-35 percent at present. Given the above facts, it is quite evident that social network gaming is going to be one of the major revenue-generating and profit making businesses.

-Rahul Mukherjee

 MDI, 2011-13