Killer apps, goods or services that establish quickly and dominate the market, are displacing traditional planning and strategy in business. These revolutionary realities such as email, the first word-processing program, and e-commerce are sudden and dramatic changes that have recently found success in changing the face of business. Companies that use existing technologies are finding possible killer apps as a way to gain advantage over competitors and serve their customers in a more efficient manner. Companies that choose to use existing, traditional ideals of strategy and planning are being passed over as the power of emerging digital solutions attracts their customers.
Companies must now adopt a digital strategy to help produce their own killer apps to survive in their marketplace. This digital strategy encourages full staff involvement in the development of possible improvements in processes, rather than having a group of people who spend years developing strategies. This full staff involvement brings together the ideas of workers on the front lines of production who have real world answers on how to make their work faster and eliminate non-essential processes.
Once developed, killer apps take their market by storm. For example, electronic mail has established itself as the way of communicating notes and short correspondence over the traditional ways of writing letters. The US Postal Service has experienced extreme loses in revenue due to the hands of email. Killer apps will dominate a market quickly as customers find its advantages over traditional services and products.
Moore’s Law, Metcalfe’s Law, and the economic theories of Ronald Coase help support the rise and domination of killer apps. Moore’s law focuses on the constant growth in computing power. The law states that for every 18 months, processing power doubles while cost holds constant. Killer apps are now able to constantly evolve faster, smaller, and more efficient while keeping costs somewhat constant. In 1980, a gigabyte of storage cost several hundred thousand dollars and took large storage space. Moore’s law has made it possible to shrink cost to $200 and drastically reducing storage space to the size of a credit card. This ever-improving processing power will serve as the backbone to the future of killer apps. Companies that choose not to invest in these technological answers to problematic issues will soon find themselves at the bottom of the market. This leads us to Metcalfe’s law.
Metcalfe’s law explains why technology spreads so rapidly, and how quickly people so readily accept it. R. Metcalfe is the founder of 3Com. His law states that new technologies are valuable only if people use them. His concept is easy to understand. If only two people have email accessibility, email would not be very important. Only those two people could communicate with each other using electronic mail technology. If the entire office were given the same email accessibility, email would become much more important. The more people use something, the more valuable it becomes, which will attract more people to use it. A prime example of the validity of Metcalfe’s law is the Internet. As more people use it, it will become much more attractive to others.
Economic Theories of Ronald Coase
The economic theories of Ronald Coase have produced many opportunities for smaller companies to compete easier with larger, more established firms. Coase believed that firms are set up to minimize transactional costs. A larger firm can produce products like steel at lower economies of scale and more efficiently than an individual. Existing corporations are now competing against the economies of cyberspace.
The economies of cyberspace significantly lower transactional costs more than traditional firms do because of the greatly reduced costs of land, labor, and capital. An online bank can offer as many advantages that traditional banks currently offer. This is because the transactional costs of an online bank are much lower. Their website serves as their “land” and their employees mostly work part-time. Clearly, Moore’s Law, Metcalfe’s Law, and the economic theories of Ronald Coase have provided a prosperous environment for killer apps to flourish in today’s society. Killer apps will provide opportunities for many firms to find a new niche or service using digital technology that can help them revolutionize their markets.