Who are the primary users of scm systems

7 CHAPTER

Networks: Mobile Business

CHAPTER OUTLINE

SECTION 7.1 Connectivity: The Business Value of a Networked World

SECTION 7.2 Mobility: The Business Value of a Wireless World

Overview of a Connected World

Benefits of a Connected World

Challenges of a Connected World

Wireless Network Categories

Business Applications of Wireless Networks

What’s in IT for me?

The pace of technological change never ceases to amaze. Kindergarten classes are now learning PowerPoint and many elementary school children have their own cell phones. What used to take hours to download over a dial-up modem connection can now transfer in a matter of seconds through an invisible, wireless network connection from a computer thousands of miles away. We are living in an increasingly wireless present and hurtling ever faster toward a wireless future. The tipping point of ubiquitous, wireless, handheld, mobile computing is approaching quickly.

As a business student, understanding network infrastructures and wireless technologies allows you to take advantage of mobile workforces. Understanding the benefits and challenges of mobility is a critical skill for business executives, regardless of whether you are a novice or a seasoned Fortune 500 employee. By learning about the various concepts discussed in this chapter, you will develop a better understanding of how business can leverage networking technologies to analyze network types, improve wireless and mobile business processes, and evaluate alternative networking options.

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opening case study

Disrupting the Taxi: Uber

Ray Markovich started driving a taxi in Chicago three years ago after shutting his struggling wireless phone store. Driving a cab wasn’t particularly gratifying or lucrative—he had to pay $400 a week just to lease his white 2011 Ford Escape. It was predictable if monotonous work. Well, there’s nothing monotonous about it now. In June, Markovich, a thin, well-dressed man with short brown hair and spots of gray in his mustache and goatee, walked into the local office of Uber, the San Francisco-based taxi technology start-up. Uber put him through an hour of orientation, gave him a free iPhone that carries its car dispatch app and some gear to mount it on the windshield, and sent him on his way.

Since then, Markovich has had to dodge flak from traditional cabbies who complain that they can no longer pick up riders in the city’s tonier neighborhoods, and he’s receiving a constant flood of emails from Uber itself, offering steep discounts on new cars and other perks to secure his loyalty. At the same time, he has increased his earnings by about 20 percent and says he’s simply evolving along with his customers. “No one under the age of 40 with a smart phone is going out and getting a cab anymore,” says Markovich. “I say if you can’t beat ’em, join ’em.”

A battle for the future of transportation is being waged outside our offices and homes. Uber and a growing collection of well-funded start-ups, such as the ride-sharing service Lyft, are trying to make getting a taxi as easy as booking a reservation on OpenTable or checking a price on Amazon—just another thing you do with your smart phone. Flush with Silicon Valley venture capital, these companies have an even grander ambition: they want to make owning a car completely unnecessary. They’re battling each other, city regulators, entrenched taxi interests, and critics who claim they are succeeding only because they run roughshod over laws meant to protect public safety. “Being out in front of the taxi industry, putting a bull’s-eye on our back, has not been easy,” says Travis Kalanick, the 37-year-old chief executive of Uber. “The taxi industry has been ripe for disruption for decades. But only technology has allowed it to really kick in.”

Nearly four years ago, Uber introduced the idea of allowing passengers to book the nearest town car by smart phone and then track the vehicle on a map as it approaches their location. After the ride, the service automatically compensates the driver from the customer’s preloaded credit card—no awkward tipping required. It’s a simple experience and a much more pleasant way to get a ride than stepping onto a busy street and waving at oncoming traffic.

Uber has raised $307 million from a group of backers that include Google Ventures, Google’s investment arm, and Jeff Bezos, the founder of Amazon. It operates in 270 cities around the world and was on track to book more than $1 billion annually in rides in 2013, according to financial information that leaked to the gossip website Valleywag last November. In February alone, Uber expanded to Dubai; Honolulu; Lyon; Manila; Milwaukee; Pittsburgh; Tucson, Arizona; and Durban, South Africa.

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In the process, Uber has managed to become one of the most loved and hated startups of the smart phone age. Its customers rave about the reliability and speed of the service even as they bitterly complain about so-called surge pricing, the elevated rates Uber charges during hours of high demand. Uber has also been blocked from operating in several markets by regulators out to protect the interests of consumers or entrenched incumbents, depending on whom you ask. After customers complained about the ban in Austin, Texas, the Austin City Council adopted a regulatory structure for ridesharing, enabling Uber to operate in the city. In Boston and Chicago, taxi operators have sued their cities for allowing unregulated companies to devalue million-dollar operating permits. Things grew especially heated recently in Paris when incensed taxi drivers shut down highway exits to the main airports and gridlocked city traffic.

Kalanick calls the cab industry a “protectionist scheme.” He says these protests are not about the drivers but cab companies “that would prefer not to compete at all and like things the way they are.”

His opponents are equally critical. They accuse Uber of risking passengers’ lives by putting untested drivers on the road, offering questionable insurance, and lowering prices as part of a long-term conspiracy to kill the competition, among other alleged transgressions. Fueling the anti-Uber cause is the tragic case of a 6-year-old girl in San Francisco who was struck and killed by an Uber driver. “Would you feel comfortable if you had a 21-year-old daughter living alone in the city, using a smart phone app to get in a vehicle for hire, and that vehicle ends up being a 2001 Chevy Astro van with 300,000 miles on it?” says Trevor Johnson, one of the directors of the San Francisco Cab Drivers Association. “I’ve made it my personal mission to make it as difficult as possible for these guys to operate.”

Kalanick calls himself the perfect man for the job of liberating drivers and riders. His previous company, video-streaming start-up Red Swoosh, was well ahead of its time, and Kalanick limped along for years taking no salary before selling it to Akamai Technologies in 2007 for a modest sum. “Imagine hearing ‘no’ a hundred times a day for six years straight,” he says. “When you go through an experience like that, you are sort of a hardened veteran. You only persevere if you are really hard-core and fight for what you believe in.