Alphabet’s (google) CFO announced in a blog post that it will be expanding its New York City operations. More specially Ruth Porat said they will be investing 1 billion into a new campus, in an effort to more that double its current headcount. Google currently has 7000 employees in New York and hopes to add 7000 more over the next decade. Google signed leases for two buildings, 315 and 345 Hudson Street, and are expected to move in the year 2020. They have also signed a letter of intent for a building on 550 Washington street and are expected to move in by 2022. The combination of these three building will make Google’s new Hudson Square Campus which will be the headquarters for all New York operation. Current divisions of google that exist in New York are Search, Ads, Maps, YouTube and Cloud.
Google expansion into New York seems to be following a trend that is going on in silicon valley. The trend being massive expansion of domestic operations. Originally Amazon announced its HQ2 project and decided on having it in New York and outside Washington D.C. Apple announced that it was building a new office in Austin Texas. Now Google is latest tech giant to announce an expansion, but it probably won’t be the last. These huge expansion by these tech giants show how intense competition is among them and the fear they have of rivals gaining a competitive advantage. That is why you are beginning to see the emergence of a multi-point competition in the tech industry similar to that of the auto industry. So if one tech giant makes a move expect the others to follow.
Apple has announced intentions to build a new 1 billion dollar campus in Austin, Texas. The company has also announced plans to expand to over 1,000 staff in Seattle, San Diego, and Los Angeles over the next three years, while adding “hundreds” of staff in Pittsburgh, New York, Boulder, Boston and Portland, Oregon. The Austin campus will employ roughly 21,000 employees and will undoubtedly become the leading employer in Austin. The campus will be environmentally friendly and have up to 50 acres of open space. Quite a big leap for an “American” company who has always manufactured it’s products elsewhere.
This is undoubtedly in response to critics saying that Apple is not really an American company (because they do the majority of their business elsewhere) and treats it’s workers unjustly. We all remember the scandal in Foxconn in 2010 where 14 suicides were committed at Apple’s factory and dormitory. I wonder if Apple has made modifications to that factory and gave them 50 acres of open space. I’m sure they have, but this move still hasn’t won me over.
More recently, it was discovered that Chinese workers were still being treated unfairly in Apple’s factories. Filming on an iPhone 6 production line showed exhausted workers falling asleep on their 12-hour shifts. This type of issue should be addressed before developing new campuses in the US.
An AI vision company is launching a mini camera that you can wear to track your social life. This camera is tiny and can be clipped to any shirt and will be hooked up to your mobile device. What this camera will do is take pictures every second, use facial recognition to keep track of the people you are meeting with along with the amount of time you are with them, and will store pictures of people it does not recognize so you can come back to review it. It is essentially a consumer-based augmented reality device. The purpose of this device is to track and inform you of how much time you are spending with people versus screens. The company wants people to become more aware of their human interaction or lack thereof.
Personally, I think this device is a little creepy because it is essentially vlogging your entire day and taking pictures of everyone you spend time or come across. Although the company created this to increase human interaction by making people more aware of how much they are on their phones or computers, it seems contradictory to build a device like this, a disruptive innovation that uses technology to keep track of everything you do everyday. It has more potential to be used negatively, as does most technology these days, and ultimately may not serve the very purpose it was created for.
Microsoft recently bought the Startup XOXOCO to adopt this emerging technology as an approach to adopt Artificial intelligence in their operation. In the business operation perspective, it represents as a significant investment for Microsoft. ChatBots the artificial intelligence technology was able to replace first-line/ Tier one customer support personnel. Secondly, ChatBots were able to decrease the language barriers for business if they out-source their support operation overseas. In comparison to oversea customer support, ChatBots provide a service that was able to decrease the language barriers and overall support time. For Microsoft, if the company adopt such technology into their operation, they will be able to decrease expenses on first-line customer support.
Lenovo is releasing a new UK product in October that is integrated with the Google Assistant voice activated technology, and it is making big waves within the gadget community. This sleek new device offers all the same functionality as Google’s line of voice activated products, but offers a colorful screen display in addition to audio. This, it turns out, is what people really want and it is stirring up a lot of excitement. This new product unveil has inspired Google to create their own version called the Google Home Hub. This will also be released in October and will give tech enthusiasts a tough choice when deciding what their new premier voice technology investment will be. Although both devices use the Google Assistant, Lenovo’s offering is much more expensive than Google’s.
This is an example of disruptive innovation. Lenovo is a new entrant that created a new product, but unlike normal situations, they chose to try to capture the high end of the market with a premium product meant for undershot customers. Google, the incumbent, is releasing a product to combat Lenovo’s. However, they are continuing along the path of sustaining innovation by gradually attempting to increase the performance of their products to capture undershot customers. They already offer lower end Google Assistant technologies for the overshot customers, so they have quite the opportunity to expand their market share with a reliable yet cheaper option to the high performing Lenovo Smart Display. Only time will tell who comes out on top, but the competition within the AI technology world is growing steadily. Will there be a new company we never heard of with most of the market share by 2050? Will voice technology be replaced by something more advanced by 2050? “Hey Google,” give me the answers!
After a relatively long amount of time, CVS Health Corp is expected to close it’s purchase of Aetna later this month. The company has only recently won approval to purchase Aetna and is expecting to merge Aetna into it’s existing infrastructure. By merging these two giants, we can expect to see a reshaped healthcare sector as it combines one of the largest pharmaceutical providers with one of the oldest health insurers. After learning about disruptive innovations in class, this article seemed to fit as it is combining two companies in the same general field but not specific sector allowing for a more aligned, over arching company. With the combination, CVS could start offering anything from screenings to preventative care services in it’s clinics for customers with Aetna health insurance. Compared to other healthcare insurances, the combination of convenience and reputation that both bring to the table could disrupt the entire healthcare industry.
AI has a high impact on healthcare. It offers multiple benefits such as identifying new techniques that can prevent diseases, perform clinical diagnoses. AI also has the capability of detecting meaningful relationships in a data set that can be used in meaningful situations. For instance, there are startups like Cerebro that focuses on improving nurse staffing.
Day and night, hospitals require high-quality clinical staff for their patients. To meet their needs, hospitals increasingly rely on inefficient, insufficient staffing agencies. The agencies rarely find all of the necessary staff or only after a long delay. At the same time, agencies treat themselves to high margins instead of rewarding the clinicians’ valuable work.
Cerebro is a SaaS enabled marketplace that disrupts the traditional means through which healthcare organizations connect with clinicians for contingent work. It offers a faster, responsive healthcare solution that connects healthcare facilities with verified, ready-to-work clinicians to book appointments, manage prescriptions, tracks patients diet and exercise, post and accept both per diem and contract shifts, without reliance on intermediaries. These activities go directly to the hundreds of nurses on the Cerebro mobile app. Therefore, allowing for immediate responses and shortening time to procurement to nearly zero. The app tracks and delivers quality nurses on time and makes supplemental staffing more capital efficient by better utilizing each dollar of spending from the healthcare organization.
Elon Musk has just announced a new feature in Telsa vehicles called Summon. Summon is a parking feature that allows the owner of the vehicle to call it to their phone’s location by using a smartphone. This new feature will be released through a over-the-air software upgrade and will be accessible in vehicles made in the past 2 years. Musk also announced that owners will be able to “drive their car like a big RC car if in line of sight.”
Tesla is widely known for their amazing innovations in auto-piloting vehicles, and this is another step in that direction. The “controlling a car like an RC car” is a little frightening to me at first glance, but it’s only if the car is within a certain range of the smartphone.
We have discussed disruptive innovation in class recently and this is a great example of sustaining innovation. Elon Musk understands that in order to stay profitable, you must continue to innovate your products and provide users with better and better experiences. Even though there aren’t really many competitors in the auto-piloting motor vehicles space, Telsa continues to disrupt.
According to the inventor of the World Wide Web, Time Berners-Lee, the overbearing dominance of few Tech Giants (Facebook, Google, Amazon, Apple) is becoming too large. In an interview, Berners-Lee states that, “what naturally happens is you end up with one company dominating the field so through history there is no alternative to really coming in and breaking things up.” Prior to splitting them up, Berners-Lee states, that it is important to see whether a small player beats them out of the market, or if the overall shift in interest within the market affects these companies instead. He continues to explain that the overall “individual empowerment” that comes with the Web, has in a way, dissipated.
With excessive market power, these giant prevent the entrance of new innovations because they are established enough to see off their potential rivals. An interesting point that Barners-Lee made was about the potential for a disinterest within the market. However I seem hesitant to believe that with a shift in interest within the market will stop these companies from also shifting alongside it due to their vast amounts of financial resources and dominance over such an omnipresent industry. But you truly never know what the future holds.
In “Blue Ocean Strategy: How to Create Uncontested Market Space and Make the Competition Irrelevant,” authors W. C. Kim and R. Mauborgne present a strategic sequence for evaluating innovations, similar to the framework we use in MIS4596. Using this sequence, I will examine how the product GrandPad, a low-tech, easy-to-use, wifi-connected tablet is a low-end, sustaining innovation that taps into a new market of nonconsumers.
First, the sequence looks at six buyer utility levers. GrandPad touches on four of these levers. GrandPad increases utility in the simplicity category by limiting the number of apps and features to only those users use regularly. It increases convenience by using larger icons and an intuitive interface, meaning no training or assistance is required. It increases utility in the risk category by providing seniors with a private family network, eliminating concerns regarding internet scams and risky browsing. Finally, because it’s focused on the family, it has greater utility to seniors in the fun and image category.
After establishing exceptional utility, the next step is to price the product strategically. Because the GrandPad innovation lacks excludability, rivals can take the idea and customers along with it. Therefore the price must be set low to retain customers. At $200 for the tablet, plus accessories and support, and $40 per month service fee, this product is at the low-end of the tablet and cellular service markets. This matches the price-sensitivity of seniors as well.
The next step is ensuring costs are low enough to hit the company’s profit target. The levers the authors of “Blue Ocean Strategy” reference are streamlining operations, partnering, or changing the pricing model of the industry. GrandPad uses the latter two options in its strategic costing. GrandPad is a product of Consumer Cellular who partners with large cellular companies like T-Mobile by buying their unused capacity at a reduced cost. Their pricing model is unusual in that they bundle cellular and tablet costs which reduces marketing costs for the cellular arm of the company.
The final step is to address anything that would limit users from adopting the product. The GrandPad could face user adoption issues if seniors had to buy a lot of additional components or call their families every time they needed help using the product. GrandPad solves these issues by providing complementary products like stylus pens, charging stations, protective covers, and specialized user support in the product’s bottom-line price. One user adoption issue they still need to revisit is coverage. The cellular coverage in rural areas, where many older people choose to retire, is not as good as in dense, urban centers. Despite this, the product is making waves in the tech industry: https://www.bloomberg.com/news/articles/2018-05-07/an-ipad-for-80-year-olds-senior-citizen-carrier-bets-on-tablets