Read each Case Study Answer the following question for each case study.Case Study #1Read the Case Study at the end of Chapter 2: Pandora and the Freemium Business Model, and answer the following in a detailed manner (the paper should be no less than one page).1) Compare Pandoras original business model with its current business model. Whats the difference between free and freemium revenue models?2) What is the customer value proposition that Pandora offers?3) Why did MailChimp ultimately succeed with a freemium model, but Ning did not?4) Whats the most important consideration when contemplating a freemium revenue model?Case Study #2Read the Case Study at the end of Chapter 3, Akamai Technologies: When Demand Exceeds Capacity, and answer the following in a detailed manner (the paper should be no less than one page).1) Why does Akamai need to geographically disperse its servers to deliver its customers Web content?2) If you wanted to deliver software content over the Internet, would you sign up for Akamais service? Why or why not?3) What advantages does an advertiser derive from using Akamais service? What kinds of products might benefit from this kind of service?4) Why dont major business firms distribute their videos using P2P networks like Bittorrent?5) Do you think Internet users should be charged based on the amount of bandwidth they consume, or a tiered plan in which users would pay in rough proportion to their usage?
3.7 CASESTUDY Akamai Technologies: When Demand Exceeds Capacity
In 2011, the amount of Internet traffic generated by YouTube alone is greater than the amount of traffic on the entire Internet in 2000. By 2015, the digital equivalent of all the movies ever made will cross over the Internet every five minutes. In the last year, Netflixs subscriber base jumped over 50% to 16 million, most of whom are now streaming movies over the Internet, and they now account for 20% of all Internet traffic in the United States. Because of video streaming and the explosion in mobile devices demanding high-bandwidth applications, Internet traffic has increased 800% since 2006, and is predicted to expand four times by 2015. Internet video is now 40% of Internet traffic and will reach 62% by 2015, according to networking giant Cisco Systems. Mobile platform traffic from smartphones and Wi-Fi devices is growing at 60% and will soon push cell networks and the Internet to their capacities. Cisco estimates that annual global Internet traffic will hit nearly 1 zettabyte in 2015thats 1,000 exabytes, or, in other words, 10 with 19 zeroes behind it!
Experts call applications like Netflix, YouTube, and high definition streaming video services net bombs because they threaten the effective operation of the Internet. At some point, demand will exceed capacity, and either there will be brownouts where everyones connection speed slows down or capping of bandwidth hogs 186187(those 10% of Internet users who consume 60% of the Internets capacity because of extensive video downloading).
Analysts differ on how fast Internet capacity is growing. Large telecommunication companies (AT&T, Verizon, Comcast, and Level3) argue that demand will overwhelm capacity by 2015, while other experts argue that Internet bandwidth can double every year for a very long time, and easily keep up with demand. Perhaps theyre both right: Internet capacity can expand to keep up with demand if sufficient capital is…