Instagram: Lightweight models and cost effective scalability

Hi Everyone!

Today we will be discussing about Tim O’Reillys 8th pattern Lightweight models and cost effective scalability. Lightweight models means easy integration with other systems and cost effective scalability means the delivery of services, not packaged software.

To illustrate this pattern, I will be talking about Instagram.

 

instagram

Instagram

In short Instagram is a popular photo capturing app which allows you to apply filters and enhance your photos to certain extent. Instagrams lightweight model example is shown by its capability to integrate with popular social networks such as Facebook, Twitter, Tumblr, Flickr and Foursquare.

Scalability:

As with any software and application you want to able to scale your business model and the technology at the same time. With over 200 million active users permonth Instagram has definitely had to scale their technology to meet this business model.

Syndicate business models:

Instagram was bought by Facebook for $1Billion US Dollars in mid 2012 and does not have any type of premium services. Instagram also leverages on the  network effect this is done by integration with popular social networks and next is by word of mouth. Due to its ever increasing user base, Instagram has become a very valuable application.

Scale your pricing and revenue models:

Instagram has been a free service since its launch and does not yet have a revenue model.Instagrams attempt to make revenue by selling users photo was not successful in 2013. But there are few ways how Instagram can make revenue as told by Dan Frommer from Business Insider:

  1. Charge for “pro” or “premium” features, either as one-time sales or subscriptions.
  2. Display advertising or sponsored photos.
  3. Charge developers to use its APIs.
  4. Charge consumers to download the Instagram app or use the service.

 

References:

Craig Smith (2014). Interesting Instagram facts. Retrieved from http://expandedramblings.com/index.php/important-instagram-stats/#.U4HjcZSSz-g

Dan Frommer (2014). Instagrams growth is amazing: Heres how it can make money. Retrieved from: http://www.businessinsider.com.au/instagram-revenue-2011-6

Peter Nowak (2013) 100 Million user yet no revenue. Retrieved from https://ca.finance.yahoo.com/blogs/dashboard/instagram-100-million-users-yet-no-revenue-193855273.html

 

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Steam: Leveraging the long tail

The long tail is a theory by Chris Anderson of Wired Magazine, which suggests that our economy is shifting away from the more popular “mainstream” products in a market and heading towards to smaller niche markets aimed towards a specific audience. In an era without the constraints of physical shelf space and other bottlenecks of distribution, narrowly-targeted goods and services can be economically attractive as mainstream fare. –Chris Anderson

 

Steam delivers a range of video games straights to a computers desktop. Comparing Steam to traditional gaming stores that only offers very few game choices (usually the high end popular ones) Steam offers a larger variety of game choices catered to specific audiences because of their unique business model which allows Steam to only pay for games once it has been purchased by the customers. As Steam does not have to pay for the delivery and the storage of the games it has very few costs involved which allows Steam to leverage the long tail by offering niche titles by independent developers.

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Best practices employed by Steam as detailed by Tim O’Reilly

 

Build on the driving forces of the Long Tail
Steam builds on the driving forces of the long tail by offering a huge range of video games aimed towards specific niche markets.  Steam also gives its users selected game titles to play for free during the weekend.

 

Use algorithmic data management to match supply and demand
Steam uses certain algorithms, which suggest new games similar to the ones the user has purchased.

 

Use an architecture of participation to match supply and demand
Steam lists and classifies all of its games and allows the user to try a game before they make a purchase.

 

Leverage customer self-service to cost effectively reach the entire web
Steam allows its user to manage their account from the very basic to changing their login information to more complex settings like managing games update statuses. As with many other platforms, Steam also has a community powered forum where users can describe their problem and may get help from other forum users.

 

Leverage the low-cost advantages of being online 
Steam offers discounted and low cost price games for it users as Steam doesn’t have to pay for delivery or storage of the games.

 

 

 

 

REFERENCES:

Valve Corporation (2014) . Steam Community.  Retrieved from http://steamcommunity.com/communitycontent

O’Reilly Media Inc, (2013). What is Web 2.0. Retrieved from http://oreilly.com/web2/archive/what-is-web-20.html?page=5

Chris Anderson, (2009). Long tail FAQ. Retrieved from http://www.thelongtail.com/about.html

Steam inc, (2013). Steam. Retrieved from http://store.steampowered.com/

 

WhatsApp: Software above the level of a single device

Hi Everyone! Welcome to my first blog.

This week in the blog we will be focusing on Software above the level of a single device.

The PC is no longer the only access device for internet applications, and applications that are limited to a single device are less valuable than those that are connected.Therefore: Design your application from the get-go to integrate services across handheld devices, PCs, and internet servers. -Tim O Reilly.

According to this statement by Tim O Reilly we can understand that most users are now on the go and using Mobile Devices more often for everyday tasks such as Emailing, Messaging, Banking, Looking at Maps, Sharing files and so on and are not dependent on PC only available software. To illustrate this pattern, I will be talking about WhatsApp today.

whatsapp-4in

WhatsApp-1

WhatsApp is a cross platform mobile messaging app that lets you send text, pictures and videos to your contacts anywhere for free (It requires internet connection though!).

Unlike Apple’s iMessage, WhatsApp works on all the major mobile operating systems which includes iPhone, BlackBerry, Android, Nokia and Windows Phone.

WhatsApp was started by two former Yahoo Employees, Jan Koum and Brian Acton. In February 2014 Facebook acquired WhatsApp for $US19 Billion in cash and stock. The purchase was the biggest internet deal since Time Warner’s $US124 billion merger with AOL in 2001.

An interesting story about this acquisition story is that both Jan Koum and Brian Acton applied for a job in Facebook and were rejected in 2009. Expressing disappointment over the rejection, Brian Acton tweeted “Facebook turned me down. It was a great opportunity to connect with some fantastic people. Looking forward to life’s next adventure.”

In addition to basic messaging WhatsApp users can create groups, send each other unlimited images, video and audio media messages.  WhatsApp is also looking to introduce an in app calling service which lets you receive and make free voice calls over the internet to your WhatsApp contacts.

REFERENCES:

Tim O Reilly (2005) What is Web 2.0. Retrieved from: http://oreilly.com/pub/a/web2/archive/what-is-web-20.html?page=1

Sarah Frier (2014) Facebook buys WhatsApp. Retrieved from: http://www.smh.com.au/it-pro/business-it/facebook-buys-whatsapp-messenger-for-21-billion-20140224-hvd4u.html

Rediff (2014) Amazing rags to riches story of WhatsApp founder Jan Koum. Retrieved from: http://www.rediff.com/business/slide-show/slide-show-1-special-tech-the-amazing-success-story-of-whatsapps-architect-jan-koum/20140220.htm#2

Tom Gara (2014) What is WhatsApp? One highly addicted user explains. Retrieved from:http://blogs.wsj.com/corporate-intelligence/2014/02/19/what-is-whatsapp-one-highly-addicted-user-explains

Pavithra Rathinavel (2014) WhatsApp to add Voice Calling feature to Anfroid and iOS shortly. Retrieved from: http://au.ibtimes.com/articles/547591/20140410/whatsapp-facebook-voice-calling-skype-android-ios.htm