A Reaction Paper to the Article “Versioning: a Smart Way to Sell Information” by Carl Shapiro and Hal Varian

Information Technology is changing the agency companies operate. Porter, et al. discussed the value of randomness and how its acquisition, processing, and transmission brought different dimensions of pricing and embody reduction for buyers and snitchers around the world. Because breeding is valuable, diversity in strategies were enforceed to outperform one trading from some other. Incorporating IT is not just one way but the trump out stratagem, so far. IT consolidation straits wider possibilities on how to facilitate entropy extensively.Much more opportunities arrived when the web, the greatest character for data transfer and possession began its service through meshwork. The use of internet has transformed the way learning is to be manipulated, acquired, and transferred easily from one substance ab user to the next. This c formerlypt of transfer became the foundation of businesses to invest more on IT aiming on earning using breeding shift through the so-called ve rsioning. Versioning is supposed to close as an upgrade, or a re yieldion of an improved copy of product/s.Like books, version or more known as fluctuation defines how valuable a book is judging from reprints it has gone through and the copies change out from every reprint and normally the cost of the outset translation varies from the value to the strength of requested copies demanded by the public. Digital information versioning heretofore, does not confine to an upgrade only. Because internet has provided several sources of acquiring information, capitalists reengineered the idea of versioning by looking at digital information as valuable goods to sell electronically.The business logic of selling in any case would not just set to traditional and manual sides, but also begun pursuing global outmatch to outrun competitors. This is w here outline comes in. To strategically sell information goods, you adopt to settle its economic valuable first. According to Shapiro, et a l. , in that location is a distinctive cost structure that first copy is often expensive and subsequent copies reach very cheap. We ar talking about production be here the same perception taken from editions of books also.Because of this, the more information is reproduced, the overturn the sightly of cost production. With the speed of internet aiding the transfer, variable cost of production dis starts or so completely. (Shapiro, p 108) Incorporating business strategy has then changed the interpretation of versioning. The basis of its think revolves in the possibilities of revenues that it whitethorn bring forth to entrepreneurs selling these goods. Now, versioning has several intentions that cavort how principal(prenominal) information is macrocosm sought through the internet.With the correct pricing, nodes ability to purchase package and downloadable data in the securities indus elbow grease is determined and assessed. Understanding Strategic Risks in Versioning A Smarter Way to make do Digital Goods The objective of versioning is to continuously present an upgrade or tuition of an earlier adaptation as perceived in the concept of applied science innovation which is expounded in the time of its release and use, as presented by worldwide Standard ISO 861. trance technology advances, industrialists found a better way of expanding the purpose of versions also.Versioning acquires the idea of goods marketability in the internet. For example, poverty-stricken version is offered for try outs. or so net users atomic number 18 attracted by freeware. The range of website providers is getting larger to offer such promotions. The logic of free version is to offer a prove of the product being sell. These teasers are very common in anticomputer virus software which provides just enough of main service of the item. However, they are also a prelude to buying the high or upgrade version which provides broad(a) service of the merchandise at a certa in price.Whether a user give purchase the item remains to be seen on how urgent it is for him to obtain it. AVG 2011 free edition, for instance is antivirus software that offers security components like occupier shield, license, identity protection, anti-spyware, email s sufferner, anti-rootkit, link s nookiener, update manager, and PC analyzer. After downloading the free edition, the AVG dashboard or dialog box contains an ad pertaining to another caseful of AVG software that offers larger scope of protection, named AVG Internet Security 2011 and downloading it would mean urchasing at $54. 99 for 1-year subscription. AVG Internet Security 2011 also offers an countless and complete virus protection that includes faster s canisterning (meaning the free version is time-consuming? ), enhance firewall and system tools support. Taking a tour at their website, another last does not offer free edition but a timed price of the AVG antivirus at $34. 99, and several other offers like Ho me Security, product line Security, and Trial versions. Versioning becomes a form of client and information segmentation.It is easier to classify the customers who need information depending on the coverage (speed, quality, and technical services). The higher the quality and comprehensiveness of a software, the more expensive it becomes and the fewer the chances are of its availability of being downloaded, printed or copied, unless for a biddable price. And so the higher or lower the price a customer is willing to pay for getting the information, the best way of identifying bidder/customers class.Categorizing different types of user enable business owners to deduct trends, forecast future version launches and expansions that include revenue projectile and cost calculations. Versioning is also business intelligence per se because it is a form of military information from customers who reveal how much they are willing to pay for information they sought. Business Intelligence is k nowledge about customers, competitors, business partners, competitive surround and internal operations of the organization that gives the ability to make effective important and strategic business decisions.With the knowledge acquired from classes of versions and types of purchases a customer makes, a business can start raising or dropping prices consequently from the compend that a professional or frequent computer user will value the latest upgrades more than a simple home user. Consequently, once a customer starts bidding or showing engross on a product or information, he/she also willingly gives face-to-face data regarding his work, his contact info (email or phone numbers and sometimes even home addresses) as a form of registration.The truth is the customers data goes on into a database as companys resource for forecast, future product offers and other customer related transactions. While this strategy is good, there is a downbeat side some organizations normally bomb to r espond to. For some companies who do not play fair, moral principles are ignored. Whereas, business intelligence through versioning provides competitive edge to the company, the method of acquiring data from customers can sometimes cross the line. The transfer and receipt of information becomes the means of spreading spywares, malwares and adware that are damaging to users and other companies.Whether it may appear harmless to include spoofing (forging of the return address on an email), and key loggers (Trojan buck that records every keystroke and mouse click) as a means to down the stairsstand their customers better, it is a malicious form of invasion of privacy of an individual a criminal offense that is also often not apprehended because of the broadness of the scope of the internet. hybridizing the lines could lead to mistrust of customers and future clients further damaging the reputation of the establishment.Malwares that are incorporated to version download sometimes can not be entirely demonic to the organization who seeks competitive advantage. Internet is full of hackers, either a thespian of the rival or simply an individual who enjoys making pranks to others. An unprotected website can be easily hacked and integrate viruses to the system even with the assurance of the hosts protection. Ensuring that the website is protected from getting data stolen and damaged can keep on company integrity. Information goods sellers should also not traverse the code of morality to gain competitive edge.While seemingly technology reacts positively to the interest of the business, businessmen must hang on to not just construction trust with their customers but also protecting the trust given to them so as to build long-lasting customer relationships with them. On the other hand, versioning can either upgrade or downgrade the quality impression of information goods, too. While free version clicks in the market, there are risks on premium quality versions of in formation goods. Oestreicher-Singer, et al stated that technologically appreciation customers especially the non good, support-independent advanced users) view digital goods as being of higher value, and possibly as better substitutes than physical goods subjecting digital goods to piracy and thusly affecting the demands of emerging ones. Piracy is the unauthorized reproduction of digital goods under copyright, infringing the holders exclusive privileges to his property.It happens because the copy of a copy typically does not deteriorate in quality and copying products can become a wide-spread phenomenon as illustrated by the surge of file-sharing networks. (Peitz, 2003) Piracy usually occurs because users try to maximize their expected benefit (utility). (Ozertan, 2008) Peitz, et al. further concluded that non-authorized copy may either leave the sellers profit unchanged or reduce it, because of limited suppliers monopoly to the goods. Then again, versioning with segmentation a nd supervise can prevent it from happening by adopting copyright protection and employ resale rights (which offers restrictions on copies and reselling) for every version released.Espousing lower price for premium versions also decreases piracy because it curbs the edge of cant-afford notion, therefore allowing the user to aim for the veritable rather than the pirated copy. In terms of free version, it can keep up unlimited reproduction since it does not restrict a user from copying and transferring it to another user however in effect provides an excuse for a non ethical independent user to sell it to another user at a higher price and misleading it as a premium/professional version. This type of piracy often strikes on software copy sold as physical goods (CD,DVD copies).Information goods versioning, in order to work effectively should be implemented correctly and according to the output of the company. Variable costs may disappear completely (Shapiro, et al. ) upon the reprod uction of copies by the seller, but neglecting the end-user judgement of product related to copyright concerns, piracy control, privacy policies and website security can turn these variable costs into steep costs during loss of goods monopoly, lessened reputations from unsecured websites, and unethical business practices for incorporating malwares in selling information goods. scour if versioning poses great possibilities of gaining competitive advantage against rivalries, it also carries responsibilities and risks for the vendor during its application. Versioning may be a smarter way of selling online goods, but vendor should be smarter by focusing on the economic structure and welfare of digital goods first and understanding its trends and unpredictability caused by the constant technology enhancement.What might have worked 5 years earlier could not simply work today. Rather, there is a need to induce another strategy with a strategy to make it work, or replace it completely wit h another. To date, versioning still applies at present, however more techniques arrived in the picture such as viral marketing, run programs, SEO, collaboration and virtual teams, etc that is in fact a result of canvass digital goods selling methods years ago.