Al-Najah National University Nablus

Faculty of Graduate Studies

Master of Business Administration

Complementing the requirements of the course

.Management Information Systems (451521)

case

2016/2017

.It doesn't matter

CASE SUMMARY:

Proprietary technologies vs infrastructure technologies.

Proprietary technologies can be owned, actually or effectively, by a single
company can be
the foundations
for long-term
strategic advantages,
Supervisor
: Dr.Rani
Shahwan
enabling companies to reap higher profits than their rivals.
Infrastructural technologies, in contrast, offer far more value when shared
than when usedBy
in isolation,
the earliest (11558196)
phases of its build out can take
: NourinSawafta
the form of a proprietary technology, steal a march on their competitors
by having superior insight into the use of a new technology and lead to
broader market changes. Here, too, a company that sees whats coming
can gain a step on myopic rivals. Infrastructural technology is open only
briefly. When the technologys commercial potential begins to be broadly
appreciated, huge amounts of cash are inevitably invested in it, and its
build out proceeds with extreme speed.By the end of the buildout phase,
the opportunities for individual advantage are largely gone. The rush to
invest leads to more competition, greater capacity, and falling prices,
making the technology broadly accessible and affordable. Thats not to
say that infrastructural technologies dont continue to influence
competition. They do, but their influence is felt at the macroeconomic
level, not at the level of the individual company.
The Commoditization of IT.

The most important characteristics are 1- a transport mechanism (carries

digital information) 2- highly replicable 3- The arrival of the Internet has
accelerated the commoditization of IT by providing a perfect delivery
channel for generic applications. 4- IT is subject to rapid price deflation 5ITs evolution has closely mirrored that of earlier infrastructural
technologies .As with earlier infrastructural technologies, IT provided
forward-looking companies many opportunities for competitive advantage
early in its build out, when it could still be owned like a proprietary
technology because that Many companies have gained a competitive
advantage through the deployment of innovative technologies But the
opportunities for gaining IT-based advantages are already dwindling. Best
practices are now quickly built into software or otherwise replicated .The IT
build out is much closer to its end than its beginning due to ITs power is
outstripping most of the business needs it fulfills, the price of essential IT
functionality has dropped to the point where it is more or less affordable to
all and the investment bubble has burst, which historically has been a
clear indication that an infrastructural technology is reaching the end of its
buildout.
From Offense to Defense
The most important lesson to be learned from earlier infrastructural
technologies may be this: When a resource becomes essential to
competition but inconsequential to strategy, the risks it creates become
more important than the advantages it provides because the greatest IT
risk facing most companies is overspending Nevertheless, is driven by
vendors strategies. Studies of corporate IT spending consistently show
that greater expenditures rarely translate into superior financial results. In
fact, the opposite is usually true.