Network Effects and Switching Costs 网络效应和转移成本 The Networked Economy(14): Information Management, Strategy, and Innovation 网络经济：信息管理，战略和创新 Network Effects and Switching Costs 网络效应和转移成本

Question 问题 Why does Microsoft have a monopoly in operating systems? 微软为何能垄断操作系统市场？

Reasons that lead to Microsoft’s monopoly 列举微软取得垄断的三个原因 Network effects 网络效应 Adding a user increases the value of the product for existing users 每增加一个用户都会增加产品对现有用 户的价值 Customer lock-in 客户锁定 High switching cost 转移成本高 Assets　 资产（要买硬、软件） Cognitive　 认知（要重新学习） Other 其他 Tight integration with applications 与各种应用紧密结合 Microsoft Office: Priced as bundle Office套装软件就是捆绑定价 High barrier of entry 进入壁垒高 Expensive to produce comparable product suite 生产类似产品系列需巨资投入 High fixed and low marginal cost 数字商品都具有高固定（初始）成本、低 边际（增量）成本的特点 Strategic alliances 战略联盟 Partnerships with Intel etc. 与英特尔等公司结盟

Network effects 网络效应 Network effects 网络效应 The higher the number of users of a product or service, the higher the value for each user 某个产品或服务拥有的用户越多，它对每位用户的价值就越高 Network effects have been amplified in speed and scale through the networked economy 网络效应的速度与规模在网络化的数字经济中被空前放大。 Need for collaboration 必须合作 Document sharing, supply chain integration 文件共享、供应链整合 New releases rolled out almost instantaneously across the world 进行全球同时发布 Microsoft 微软 Microsoft has chosen compatibility over performance 比起性能，微软更重视兼容 Reason: To maintain its network power 维持其网络效应

Switching costs 转移成本 Switching cost := Cost to move to competitor’s product 转向竞争对手产品的成本 Goal to create dependencies: Lock customer into product 目标：将客户锁定于你的产品 The more a product is used, the harder it becomes to switch 使用某一产品越久，就越难转换 Cognitive switching costs 认知转移成本 Learning, corporate re-training 学习、公司再培训 Information assets 信息资产 E.g., customer information and data bases 如客户信息和数据库 Complementary assets 补充性资产 Software, peripherals 外围设备、软件 Other examples?

Microsoft’s monopoly 微软的垄断性 Monopoly (or near-monopoly) suppliers are often a natural outcome in markets for digital goods, especially when there are significant switching costs and/or network effects 处于垄断（或接近垄断）地位的供应商通常是数字商品市场的自然产物，尤其是转 移成本巨大或网络效应显著时 If a product displays network effects, a monopoly can benefit customers 如果某产品显示出网络效应，则垄断恰恰会给客户带来好处 Directly, through network effects 直接源于网络效应 Indirectly, through deep pockets for innovation 间接源于创新 Q: What are the effects of a monopoly on innovation? 问：垄断对创新会产生什么影响？ Risks: of course

Effects of a monopoly on research and innovation 垄断如何影响研究和创新 Positive effects of a monopoly on innovation 对创新的积极影响 Research is expensive 研究成本高昂 Microsoft Research among the best research labs in the world 微软研究中心是世界上最佳研究机构之一 Historic example: 历史借鉴： Telecom monopoly in the U.S. 美国的电信垄断 Costs high for customers 客户支出高 But ability to run great research lab (Bell Labs) 但有能力运营大型研究实验室（贝尔实验室） Monopoly broken up by law 法律打破了垄断 Bell Labs disintegrated 贝尔实验室解体 Long-term research has become very difficult 长期研究非常困难 Negative effects of a monopoly on innovation 对创新的消极影响 Open standards encourage competition 开放标准促进竞争 Competition can stimulate innovation 竞争促进创新 Competition often drives down prices for the consumer 竞争导致用户享受低价产品与服务 Straight line for openness vs cotrol

Microsoft: Legal and regulatory aspects 微软：法律法规因素 Being a near-monopoly (or having close to 100% market share) is NOT illegal in the U.S. 在美国，准垄断供应商（或拥有近100%的市场份额）并非不合法 Aggressively trying to maintain this market share is not illegal 积极维护这一市场份额也并非不合法 However, a company cannot use or leverage its monopoly power in one product area to compete in another product area 然而，公司不能利用其在某一产品领域的垄断力去参与另一产品领域的竞争 E.g., pricing of OS as OEM (original equipment manufacturers) 如，将OS作为OEM来定价（与其他计算机制造商） Illegal: If you want to put it on one computer, you have to pay for it for every computer you sell, whether you put it on or not 如果你想在一台计算机上安装OS，那么不管你安装与否，对于你售出的每一台计算机都必须支 付费用 Vs China Telecom: govt regulations

Content 内容 Network effects 网络效应 Lock-in 锁定客户 Positive feedback  “Tippy markets” 正面的反馈  倾斜的市场 Demand-side vs supply-side economies of scale 需求方与供给方的规模经济 First-mover issues 先动者问题 Lock-in 锁定客户

Positive feedback 正反馈 When does this happen? 何时会这样? Positive feedback: When a firm becomes successful, its success make it likely to succeed in the future 正反馈：企业成功时，它过去和现在的成绩注定了未来继续成功 ‘…success feeds on itself, the strong get stronger…’ ‘…成功自养、强者更强’ When does this happen? 何时会这样? Supply side: More customers  Lower cost per unit 供给方客户增加  单位成本降低 Demand side: More customers  Larger ‘network’  More valuable product 需求方客户增加  ‘网络’扩大  产品价值提高 Products with demand-side economies of scale are most likely to exhibit positive feedback 具有需求方规模经济的产品更可能体现出正面反馈 If the positive feedback is strong enough, it leads to a single firm or product dominating the market (‘winner take all’) 如果正面反馈足够强，则会使单一企业或产品主导市场（‘赢者通吃’） In a market with positive feedback, introducing a new product is difficult because of the ‘collective switching costs’ that need to be overcome 在有正面反馈的市场中引入新产品较为困难，因为需要克服“集体转换成本”

There are two kinds of economics of scale 两种类型的规模经济 Supply-side economies of scale 供应方规模经济 The more you sell, the higher the per-item profit 销售越多，单位利润越高 If there is positive feed-back due to network effects, then also: 如存在网络效应/正反馈，则： Demand-side economies of scale 需求方规模经济 Customers will choose that product which already has many users 客户会选择已拥有较大客户群的产品

Network effect  Demand-side economies of scale 网络效应  需求方规模经济 The more units consumed –> the higher the value per unit 商品消费量增多 –> 单位价值提高 A network product is a product that displays significant network effects 网络产品：显示出明显的网络外延性的产品 value to each user 提供给 每位客户 的价值 number of users 用户数量

Tippy markets 倾斜市场 PRODUCT A 产品 A PRODUCT B 产品 B

Tippy markets 倾斜市场 PRODUCT A 产品 A PRODUCT B 产品 B

Tippy markets 倾斜市场 PRODUCT A 产品 A PRODUCT B 产品 B

Tippy markets 倾斜市场 PRODUCT A 产品 A PRODUCT B 产品 B

Tippy markets 倾斜市场 PRODUCT A 产品 A PRODUCT B 产品 B

Tippy markets 倾斜市场 PRODUCT A 产品 A PRODUCT B 产品 B

Tippy markets 倾斜市场 PRODUCT A 产品 A PRODUCT B 产品 B

Tippy markets 倾斜市场 PRODUCT A 产品 A PRODUCT B 产品 B

Sources of demand-side economies of scale 需求方规模经济的来源 Product is for person-to-person communication 产品用于人际交流 Telephone, fax, email, Instant Messenger, QQ, skype 电话、传真机、电子邮件、Instant Messenger, QQ, skype Value increases with number of subscribers/suppliers/partners 价值取决于订购者/供应商/合作伙伴的数量 Trading exchanges 在线交易平台 Value depends on the quality and variety of complementary assets 价值取决于互补性资产的质量和多样性 Software increases the value of the OS (Windows, Mac OS, Playstation, Xbox) 软件增加了操作系统的价值( 视窗、 Mac操作系统、 Playstation, Xbox) Output or information needs to be shared across users 输出/信息需要被用户共享 Value increases with volume and quality of user-generated content 价值依赖于用户制造内容的数量 Online communities, tagging, reputation systems 在线社区、标签、名誉体系 More general than network effects

When can the winner take all? 赢者何时通吃？ Cost structure 成本结构 High initial cost 初始成本高 Low marginal cost 边际成本低 Fast and cheap distribution 分销快捷、低廉 Network product 网络产品 High switching costs 转换成本高 And how can the winner keep all? 赢者如何保住成果？ High barriers of entry 进入壁垒高

Advantages and disadvantages of being first to market 先动者具有优势吗？ When is there a advantage of being first to market? 什么时候先动者具有优势？ When first mover can lock-in customers 当先动者可以锁定客户 When size of customer base increases the value of the offer 当客户基础规模在一段时间内提高了产 品/服务的价值 When entry by competitors can be deterred by high fixed investments 当高额固定投资能够制约竞争对手进入 What are the disadvantages of being first to market? 首先进入市场的劣势 Market poorly understood 对市场的了解可能不够 Product creation inefficient 产品生产可能效率低下 Product or service unreliable, unfamiliar 产品/服务可能不可靠、不熟悉 Market may not yet have large demand市场可能还没有足够的需求

Content 内容 Network effects Lock-in 锁定客户 Positive feedback  “Tippy markets” 正面的反馈  倾斜的市场 Demand-side vs supply-side economies of scale 需求方与供给方的规模经济 First-mover issues 先动者问题 Lock-in 锁定客户

Switching computers vs cars 换电脑 vs 换汽车 Upgrade: Windows PC to another Windows PC 升级：从任何计算机到其他计算机 Copy files, reinstall software 复制文件、重新安装软件 Shortcuts, bookmarks,… 快捷键、书签… Get used to the feel and layout of new keyboard 熟悉新键盘的感觉/布局 Across brands: Mac to PC 品牌间：从Mac到PC Buy new peripherals 购买新的外围设备 Buy new software 购买新软件 Convert all Mac files to PC-compatible files 将所有Mac文件转换到PC兼容文件 Learn how to use the new OS (get used to the new UI, figure out what the mouse does when you right- click, double-click, what the control and function keys do, …) 学习如何使用新操作系统－熟悉新的用户界面，了解 右击、双击时鼠标的作用，以及控制键和功能键的作 用… Find a new ‘support group’ 找到新的“支持小组” Cars 汽车 Upgrade: From any car to any other car 升级：从任何汽车到其他汽车 Getting license plates, registration, insurance, spending time at DMV/AAA 取得牌照，进行登记，购买保险，向机动车 辆管理局/美国汽车协会进行咨询 Getting used to 'how the car drives‘ 熟悉“汽车如何驾驶” Across brands: Honda to BMW 品牌转换：从本田到宝马 Find a new service shop 找到新的服务点 Find where to get spare parts 找到零配件供应点 Buy new accessories/toolkit 购买新附件/工具包 Adapt to the new dashboard, figure out where all the controls, switches and levers are 适应新仪表盘，了解所有控制件、开关和操 作杆的位置

Switching costs in the Mac-PC example Mac-PC例子中的转换成本 Buy new peripherals (OS-specific) 购买新外设（与操作系统匹配） Buy new software (OS-specific) 购买新软件（与操作系统匹配） Convert your Mac files to PC-compatible files (OS-specific) 将所有Mac文件转换到PC兼容文件（与操作系统匹配） Learn how to use the new OS (OS-specific) 学习如何使用新操作系统（与操作系统匹配） Find a new ‘support group’ (OS-specific) 找到新的“支持小组” （与操作系统匹配） Switch from a HP to a Lenovo 从惠普PC转到Gateway PC Microsoft makes more money on a PC than the computer manufacturer of the PC 微软在一台电脑上赚的钱要比电脑生产商多的多。 The ‘piece’ of the product that drives switching cost gets most of the margin 导致转换成本升高的产品“组件”看来获取了绝大部分利润

Lock-in: Overview 锁定：概览 Switching cost: Cost borne by customer when switching from one ‘supplier’ to another 转换成本：当客户从一家“供应商”转向另一家时所承担的成本 Switching brands 转换品牌 Switching technologies 转换技术 Switching vendors 转换销售商 The costs here are distinct from 在此，成本不同于 Differences in price 价格差距 Differences in product quality 产品质量差距 High switching costs  Lock-in 高转换成本  锁定 Price supplier can charge = (quality & competition adjusted price) + (switching cost) 商家可以设定的价格＝（质量和竞争调整价格）＋（转换成本）

Lock-in: Overview 锁定：概览 Brand Selection 品牌选择 Lock-In 锁定 Sampling 试样 Entrenchment 稳住

Sources of lock-in 锁定的来源 Type of Lock-In 锁定类型 Switching Costs 转移成本 Contractual Commitment 合同约定 Compensatory damages 损坏赔偿 Durable purchase 持久购买 Replacement costs, complementary products 替换成本、补充产品 Brand-specific learning 特定品牌学习 Interface learning, corporate re-training 界面学习、公司再培训 Information and databases 信息与数据库 Cost of transfer, re-creation, imperfections 转换成本、再创、缺陷 Search costs 搜索成本 Cost of time, attention, uncertainty 时间、精力与不确定成本 Loyalty programs 忠诚度计划 Lost accumulated benefits 累计利益损失

Search Costs 搜索成本 Drivers 动因 Pattern of lock-in 锁定方式 Actually finding new supplier (attention, time, evaluation) 确实找到新的供应商（精力、时间、评估） Aversion to uncertainty from unknown alternatives (loss of knowledge gained from experience) 回避未知选择所引起的不确定性（失去根据经验所得的知识） Pattern of lock-in 锁定方式 Customer invests in finding a supplier 客户花钱寻找供应商 Customer evaluates and understands quality of supplier 客户评估和了解供应商的质量 Customer pays premium for current supplier, trading off cost of search against higher prices 客户为现有供应商支付溢价，使搜索成本与更高价格相抵 Supplier strategies 供应商战略 Pay special attention to first-time customers 特别关注首次客户 Highlight reductions in uncertainty 强调不确定性的减少

Brand-specific training 特定品牌培训 Drivers 动因 Learning how to use product 学习如何使用产品 Training employees 培训员工 Pattern of lock-in 锁定方式 Customer invests in learning to use product/interface 客户花钱学习如何使用产品/界面 Customer becomes adept at usage (increases with time) 客户精于产品的使用（与日俱增） Customer sticks with product to avoid re-learning 客户坚持使用该产品以避免重新学习 Company standardizes product to reduce training costs 公司实现产品标准化以降低培训成本 Supplier strategies 供应商战略 Reduce learning barriers to adoption 为了适应减少学习障碍 Consciously design-in learning over time 有意识地在产品中设计长期学习程序 Cookies / local info: state

Information and databases 信息与数据库 Drivers 动因 Transferring product-specific information/files/media (actual transfer, imperfect transfer, re- creation) 转移特定产品的信息/文件/媒介 （实际转移、不完全转移、再创造） Pattern of lock-in 锁定方式 Customer invests in product 客户投资于产品 Customer stores/gathers product-specific information with use (increases with time)客户收集特定产 品的使用信息 （与日俱增） Customer stays with existing product to avoid transfer costs 客户坚持使用现有产品以避免转移成本 Supplier strategies 供应商战略 Actively encourage informational investment, offering convenience, cost reductions in return 积极鼓励信息投资，产品方便性及成本降低 Build interfaces to your competitors’ products 建立与竞争对手产品的界面 Offer free conversion tools 提供免费的转换工具

Managing lock-in 管理锁定 Attract the right customers 吸引合适的客户 Isolate and target the buyers with high switching costs 以高转换成本来孤立和瞄准购买者 Look for buyers with a high sphere of influence (connected, credible) 寻找影响力范围较大的购买者（有联系、可靠） Entrench them 稳住他们 Design-in gradual ease of use, informational investments 在客户设计中考虑使用的逐级方便性，信息投资 Highlight reductions in uncertainty, value from their investments 强调不确定性的降低及投资的价值 Leverage your installed base 利用客户基础 Up-sell complements, premium services (own/partners) 增加销售辅件，溢价服务（自己/合作伙伴） Sensibly sell access to your installed base 明智地出售有关客户基础的联系资料 Share value, Sell list e.g., to Mac Users

Lock-in is powerful 锁定意义重大 Setting standards (e.g., VCRs) 制定标准（录像机） Sources of lock-in 锁定的不同来源 Weak: Loyalty, contractual 锁定弱 ：忠诚度、合同约定 Strong: Complementary assets 锁定强：补充资产 Tangible: Peripherals, other software 有形：外设、软件等 Intangible: Information and data, learning 无形：信息、数据、学习、搜索 E.g., Switching your phone number vs your handset 例：更换新电话号码 vs 更换一只新手机 Strategies to create to lock in 实施锁定战略 Conversion (free tools) 转化（免费工具） Convenience 便捷 Pornography example: both VCR and Web