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Backward Compatibility

the ability to take advantage of complementary products developed for a prior generation of technology

blue ocean strategy

An approach where firms seek to create and compete in uncontested "blue ocean" market spaces, rather than competing in spaces and ways that have attracted many, similar rivals.

complementary benefits

Products or services that add additional value to the primary product or service that makes up a network.


when 2 or more markets, considered distinctly separate, begin to offer features and capabilities. Example: the markets for mobile phones and media players are converging

same-sides exchange benefits

benefits derived by interaction among members of a single class of participant (e.g. exchange value when increasing numbers of IM users gain ability to message each other)

cross-sided exchange benefits

when an increase in the number of users on 1 side of the market (console owners, e.g.) creates a rise in the other side (software developers).


a market where there are many buyers but a single dominant seller

network effects

Also known as Metcalfe's law, or network externalities. When the value of a product or service increases as its number of users expands.


a market dominated by a small number of powerful sellers

one-sided market

a market that derives most of its value from a single class of users (instant messaging)


products and services that allow for the development and integration of software products and other complementary goods. windows, the iphone, and the wii, and the standards that allow users to create Facebook apps are all platforms.

staying power

the long time viability of product or service

switching costs

The cost a consumer incurs when moving from one product to another. It can involve actual money spent (e.g., buying a new product) as well as investments in time, any data loss, and so forth.

technological leapfrogging

completing by offering a new technology that is so superior to existing offering that the value overcomes the total resistance that older technologies might enjoy via exchange, switching cost, and complementary benefits.

total cost of ownership (TCO)

an economic measure of the full cost of owning a product (typically computing hardware and/or software). TCO includes direct costs such as purchase price, plus indirect costs such as training, support, and maintenance.


customers who are tightly anchored to the firm


customers that flutter away to rivals

two sided market

network markets comprised of 2 distinct categories of participant, both of which that are needed to deliver value for the network to work(video game console owners and developers of video games)

cloud computing

Replacing computing resources—either an organization's or individual's hardware or software—with services provided over the Internet.


describes the use of cloud computing to provide excess capacity during periods of spiking demand. cloudbursting is a scalability solution that is usually provided as an overlfow service, kicking in as needed.


capable of continuing operation even if component fails

hardware clouds

Models often referred to as utility computing, platform as a service, or infrastructure as a service. Can let firms take their software and run it on someone else's hardware—freeing them from the burden of buying, managing, and maintaining the physical computing that programs need


An acronym standing for Linux, the Apache Web server software, the MySQL database, and any of several programming languages that start with P (e.g., Perl, Python, or PHP).


an open source software operating system.

marginal cost

the cost of producing one more unit of a product.

open source software

software that is free and where anyone can look at and potentially modify the code


ability to either handle increasing workloads or to be easily expanded to manage workload increases. in a software context, systems that aren't scalable often require signicant rewrites or the purchase of development of entirely new systems.

server farm

A massive network of computer servers running software to coordinate their collective use. Server farms provide the infrastructure backbone to SaaS and hardware cloud efforts, as well as many large-scale Internet services.

service level agreement (sla)

A negotiated agreement between the customer and the vendor. The SLA may specify the levels of availability, serviceability, performance, operation, or other commitment requirements.

software as a service (SaaS)

A form of cloud computing where a firm subscribes to a third-party software and receives a service that is delivered online.

total cost of ownership (tco)

All of the costs associated with the design, development, testing, implementation, documentation, training and maintenance of a software system.

virtualization (virtual desktop)

A type of software that allows a single computer (or cluster of connected computers) to function as if it were several different computers, each running its own operating system and software. Virtualization software underpins most cloud computing efforts, and can make computing more efficient, cost-effective, and scalable.

thin client

a computer or a computer program which depends heavily on some other computer (its server) to fulfill its traditional computational roles.
similar to SAAS like turbotax

Application programming interface (APIs)

programming hooks, or guidelines, published by firms that tell other programs how to get a service to perform a task such as send or receive data. ex. Facebook lets Farmville use part of its code so that Farmville can write an app that facebook users can use. Same thing with Microsoft and Blackboard

cash-flow positive

When a company's revenues can cover its operating costs


The act of taking a job traditionally performed by a designated agent (usually an employee) and outsourcing it to an undefined generally large group of people in the form of an open call.

dark web

Internet content that can't be indexed by Google and other search engines.

free rider problem

When others take advantage of a user or service without providing any sort of reciprocal benefit.

goes public (IPO)

The first time a firm sells stock to the public; formally called an initial public stock offering.

Hunt vs. Hike

Hunt looking with a purpose, Hike no purpose just exploring.

social graph

The global mapping of users and organizations, and how they are connected.

switching costs

The cost a consumer incurs when moving from one product to another. It can involve actual money spent (e.g., buying a new product) as well as investments in time, any data loss, and so forth.

web 2.0

term given to describe a second generation of the World Wide Web that is focused on the ability for people to collaborate and share information online.

venture capitalists (VCs)

Investor groups that provide funding in exchange for a stake in the firm, and often, a degree of managerial control (usually in the form of a voting seat or seats on the firm's board of directors).


A term describing the extensive use of data, statistical and quantitative analysis, explanatory and predictive models, and fact-based management to drive decisions and actions.

Business Intellegence (BI)

A term combining aspects of reporting, data exploration and ad hoc queries, and sophisticated data modeling and analysis.

data mining

The process of using computers to identify hidden patterns in, and to build models from, large data sets.

data warehouse

a set of databases designed to support decision making in an organization

database management systems DBMS

software for creating maintaining and manipulating data

foreign key

non-key column or filed in one table that links to a primary key to another table

legacy system

older information systems that are often incompatible with other systems, techonologies, and ways of conducting business. incompatible systems may be a major roadblock to turning data into information, and they can inhibit firm agility holding back operational and strategic initiatives.

Market basket analysis

Data-mining technique for determining sales patterns. Shows products customers tend to buy together.

primary key

a column in a table whose values uniquely identify the rows in the table.


ask questions of a database and pull records that meet certain criteria

record or row

represents a single instance of whatever the table keeps track of

relationship (relational database)

the most common standard for expressing databases, whereby tables (files) are related based on common keys.

canned report

provide regular summaries of information in predetermined format

rfm analysis

a method used for analyzing customer behavior and defining market segments. It is commonly used in database marketing and direct marketing and has particular attention in retail

structured query language

a language used to create and manipulate databases


a list of data arranged in columns (fields) and rows (records)

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