Ethics and leadership in organizational contexts

Ethics and Leadership

Using the Internet to Advance and Expand an Industry

The many potential business models the Internet continues to serve as a catalyst of are also bringing rapid change to intellectual property rights, licensing, pricing and compliance online. The pace of business model innovation is far outstripping these factors however, and paradoxical situations such as those that included Napster have brought to light just how nascent laws, licensing, pricing and compliance are online (Jeong, Lee, 2010). Where the Internet has sparked profitable innovation despite these emerging and often highly conflicting areas however is in digital content distribution over closed ecosystems such as Apple iTunes, and on a much broader scale, the browser competitive landscape between Firefox, Google, Microsoft and hundreds of smaller software producers. As Software-as-a-Service (SaaS) continues to grow three to five times faster than traditional enterprise software, the Internet's ability to fuel entirely new business models in software development and delivery is becoming readily apparent as well (Gray, 2010). This paper will evaluate the business models that Internet has made possible to operate profitably, while also taking into account the constraints formed from the nascent levels of maturity in licensing, pricing, contract management and rights management.

The Internet as a Catalyst of Collaboration

In the mid-1990s when Napster and the many other online music sharing services were flourishing in what was comparable to the Wild West of the Internet, collaboration was rampant. Ironically, the true collaborative nature of the Web was not fully visible or realizable until social networks as diverse as Facebook, Friendfeed, LinkedIn, MySpace, Twitter and many others quantified and brought to the foreground of the industry just how collaborative the Web really is. The ability to bring customers into the conversation for the first time, being able to capitalize on the inherently egalitarian nature of the Web, was the basis of social networking's success (Bernoff, Li, 2008). Ironically when extreme egalitarianism became reflected in application and product designs, such as is the case with Facebook and Twitter, which rewards egalitarianism with more followers and higher status, did the true collaborative nature of the Web emerge. Visionaries including Steve Jobs who designed the iTunes system, a virtual cash generation machine that takes digital content, sells it online for 99 cents a song and takes up space on Apple-produced and sold devices, monetized this collaborative aspect of the Web (Sobel, 2007).

Apple was successful with their business model where others had failed due to several key success factors, the greatest being their preemptive use of digital rights management and contract management ownership of all supporting technologies, ordering, pricing and content systems (Jeong, Lee, 2010). Apple realized that they would need to have a fully functioning digital rights management ecosystem that would protect the pricing and rights on a global scale (Sobel, 2007). This was very difficult to accomplish given the various legal systems globally yet Apple was able to define their own MP format, which helped to further differentiate their products relative to mainstream MP3 music files and systems (Knapp, 2009). This technology direction helped to also establish precedence of digital rights ownership as well. Apple had been successful in monetizing the inherent collaborative aspects of the Internet by creating an entire platform capable of growing to support all forms of digital content. This has resulted in the eventual inclusion of video capability in all iPods, the launch of the iPad, and the aggressive launch and development schedules for the iPhone. All of these devices are inherently designed to capture, store, share, and publish digital video. The eventual inclusion of digital video content that is licensed and conforms to the same legal constructs as iTunes music means the traditional television, movies and entertainment industries will face significant disruption (Knapp, 2009). All of this is being driven by the innately collaborative and increasingly stable platform of the Internet.