Saturday, November 10, 2007

The Economics of Information Technology: An Introduction

The Economics of Information Technology: An Introduction By Hal R. Varian, Joseph Farrell, Carl Shapiro
summary available through Google's Book Search - interesting points:
  • constant fixed costs and zero marginal costs (the first product costs the $ and each incremental delivery is near $0) - example given that a chip fabrication plant costs about $7 Billion to setup, etc. but each incremental chip only costs a few dollars.
  • every now and then a technology emerges where the components can be reconfigured to create new/various products - once standardization sets in (prior examples of standardizing gears, pulleys, electrical current (AC/DC), etc. - a 'recombination' effect.....internet boom was mostly about networking - TCP/IP........
  • the 'recombination' effect for the internet occurred much faster then prior technology revolutions - '...the internet revolution is minor compared to other technology revolutions of the past....'......maybe...or are we just at the beginning and what we have are limited amateur recombinations.....
  • open source allows for greater advancements because it provides a quick and low cost view of what works and how things are constructed (the amazing point that countless people from around the world openly work to create great systems such as Linux, PHP, etc.....the barriers of cooperative competition have disappeared).
  • 'market of one' - highly specialized products can be developed and sold to individuals at personalized pricing.....HW/SW configurations based on needs and available funding. Mass marketing is going away because we can learn what individuals want and can provide product and an acceptable cost
This along with Creative a lot to think about.......

No comments:

Post a Comment