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Topic: Digital Software Distribution

Statement / Thesis: Digital Software Distribution is becoming more and more important to the computer and entertainment industry. All companies related to the topic should act now and deliver working solutions within the next month. 1. Technical Development As described in the Microsoft research „Being Human“1 the computers developed from big mainframe systems in the 1960s to personal desktop computers in the 1980s. As the technical development went on the machines got smaller and more powerful resulting in the mobility era in the 2000s. This era of computing - and the near future - are the points the focus will be on in this assignment.  
Graphic 1: Trends in mobile era, mid-picture from „Being Human“1
 Nowadays there are two clear trends concerning the technical development2. First, computing moves towards small devices and gadgets, phones are becoming quite impressive computers already and the size of gadgets is not necessarily mean a device is not usable. The second aspect is that people have access to information technology almost wherever and whenever they want. This is an interesting aspect especially for companies, as they can gain an even higher customer-connectivity through permanent connection to the user/customer. Think e.g. of facebook3: with mobile applications for facebook people are even closer to this social network and tend to use it more often. It will be even more integrated in everydays live. This „being connected“ is important for the digital distribution of content as it means that customers are able to consume it anywhere and anytime. To explain why digital distribution is interesting for companies and why products (which were normally shipped on a data medium like a CD or a DVD) are nowadays or in near future distributed via the internet, the Long Tail Theory is looked at in part 2 before getting closer to Digital Distribution in part 3. 2. Long Tail Theory Like mentioned above many products are distributed digitally. The main reason is the price and the speed. It is clear that companies try to have the cheapest possible solution to distribute content. On the other side the customer gets the content faster (not necessarily cheaper). But why is it so interesting to distribute so many different things? To explain this, the Long Tail Theory is quite interesting. Normally, niche products are hard to sell. E.g. special interest books or music are hard to find in a normal shop. For conventional businesses or shops the costs are often to high because they have to pay staff and expensive sales area. The Long Tail Theory describes the possible niche strategy of businesses, especially internet businesses. The idea is to sell a large number of different, unique items, each in relatively small quantities, but all together the enormous number makes a good turnover. Exactly there the digital way of selling and the internet as marketplace comes into action. Amazon for example did exactly this by selling all kinds of articles, even those products customers could never find at Amazons competitors. As a result, a big profit is achievable. To sum it up one can say that the internet as a channel can offer a variety of products with much lower costs on the supplier side. 3. Digital (Software) Distribution So far the focus was on regular products which have to be shipped. Only the channel and sales process was digital yet. But what about products that can be distributed digitally? All of the mentioned products are already available fully digital. Mp3- downloads replace CDs, video-downloads make up for DVDs, e-books can be an alternative to the paper version, video games can be downloaded via own channels for all the major systems. And software? Software can be downloaded often from the producing company itself - but what is missing here is a centralised platform for different software from different producers. Something like the Amazon Music Download or Apple's iTunes Store concerning music, videos and TV-series.
So what is the trend with digital distribution for software? Is there a chance for a platform? The answer is that there is already a centralised platform for applications. After introducing the iPhone in mid of 2006, Apple didn‘t want third parties developing native applications running on the iPhone (the only planned online applications in the browser). Due to the hacker scene and the fact that the iPhone OS4 was hacked and applications could be installed directly on the device, Apple was forced to do open the OS to external software-developers. To mange the software available for the device, they started the AppStore which is available via the iTunes Software on any PC or Mac and directly on the iPhone itself. Developers can produce all kinds of applications (with some restrictions, e.g. no sexual content) and upload it to the AppStore. A fair 70/30 regulation ensures 70% of the revenues for the developers, 30% stays with Apple for running the system and marketing purpose. Of course customers have the advantage, that they only need the AppStore for getting software. Due to the digital distribution the prices are moderate - for example if one compares the price for a game from the AppStore to a similar game on a classical videogame-system (e.g. the Nintendo DS) which comes on a physical medium, the price for the game from the AppStore is much cheaper. A further advantage is, that software is available anywhere and anytime. Even directly from the mobile phone software can be loaded via mobile data services. Altogether, Apple already brought a cheap and more important global and easy distribution for software. This is especially interesting for small developers with niche products or just small applications. Thinking on the last end of the tail (compare point 2, Long Tail Theory), also products for special intents can be sold globally with financial profit. To sum it up one can say that digital software distribution will get a big market in future as the amount of technical devices will grow and because other big players as Microsoft announced application platforms as well. What will be interesting is the question, if there will be a platform offering „real“ applications for PC and Mac or even other systems like Linux. The main topics for that are, if a company like Apple or Microsoft can convince big software companies to publish their desktop software and if there will be adequate DRM5 to prevent companies from piracy. As mentioned in the statement it is absolutely necessary for companies to be aware of the digital distribution now - it will be one of the main topics in computer industries and no one can afford to ignore it - not without an enormous cause of losses and power.

23.1.09 20:50

bisher 5 Kommentar(e)     TrackBack-URL


(23.1.09 20:58)
Wow, super! Genial... jetzt kann man endlich auch Kommentare über die Arbeiten der anderen schreiben...


Adela (24.1.09 14:09)
If you, as private person or company are not present in web with real identity you will be becoming not your real identity. The (web) identity which is not controlled by you is based on assumptions. Don’t let others give you an identity. Create the own, real one...so there would be no place for assumptions!


Susanne (24.1.09 14:40)
I think that a company's homepage is its face to the world and the starting point for most user visits. Increasingly, potential customers will look at a company's online presence before doing business with them, regardless of whether they plan to close the actual sale online. Improving the homepage multiplies the entire website's business value, so following key guidelines for homepage usability is well worth the investment.


Alex (24.1.09 15:42)
The privacy in the digital world of human computer interaction is a highly complex and sensible topic, because not all people are of the same opinion as I am and they think completely on the other way round. From my point of view the privacy in the digital world will be discussed in the future a lot and there has to be some control institution that will interrupt such too extreme interruption of the privacy.


Franziska (25.1.09 14:38)
... nowadays it is essential for a company to have its own homepage. It does not matter if the company is a small nail studio or a big logistic company, looking up the address, contact person or products - having an own homepage is a "must have" to survive. But even more important than just having a homepage is having a "professional and well designed" homepage. You can have the most common brand name or product, but a bad homepage is an issue for losing customers and with that loosing revenue, market share etc. Even having no homepage is better than having a bad one, because in this case the user cannot get an idea of the company, and that is still better than getting a bad impression about a company.

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