BUSINESS MODELS Categories

1. BUSINESS MODELS Categories

2. Examples Retailer Amazon.com Marketplace QuckenInsurance Exchange ebay Differentiators Control Sell Price set PhysicalLikely Likely Inventory online online product/service revenues costs yes yes no yes sales Possibly yes no no transactions Focused Distributors

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. 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 Portal models

6. Examples Manufacturers Ford.com Service providers American Express Educators Harvard Business School Advisors Ernst& Young (ey.com) Information and News services Wsj.com Custom suppliers Dell Differentiators Sell/serveSell/serve Level of LikelyLikely online offline customization revenues costs yes yes low to moderate yes possiblymoderate to high yes yes moderate to high yes yes moderate to high yes yes moderate to high yes yes high Producer Models

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. Examples Retailer Staples.com Marketplace Techdata.com Exchange Converge.com Differentiators Control Sell Price set PhysicalLikely Likely Inventory online online product/service revenues costs yes yes no yes usually yes bidding yes Possibly yes yes Infrastructure ProviderDistributor models

9. Examples Equipment manufacturers Cisco Micron Software firms Microsoft Oracle Services firms Doubleclick Custom suppliers-hardware Micro Age Custom suppliers-software Sapient Differentiators Sell/Serve Sell/Serve CustomizationLikely Likely online offline revenues costs yes yes low to moderate yes yes moderate to high yes yes high yes usually high sometimes yes high Infrastructure Providercontinued

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. Example Horizontal AOL.com Att.com Vertical Application Service providers (ASPs) aspstreet.com Differentiators Content, commerceHosting Likely Likely Community solutions services revenues costs Trough through partnerships partnerships with non-infrastructure portals & ASP yes Usually Infrastructure Portal models

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