But these wo nderf ul benef its co me at the price o

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Unformatted text preview: Rearden maestro s are no t o nly skilled at technical o rchestratio n, but also in co o rdinating custo mer and supplier requirements. As TechCrunch’s Erick Scho nf eld put it, “The hard part is no t o nly the techno lo gy—which is all abo ut integrating an unruly mess o f AP Is and Web services—[it also invo lves] signing co mmercially binding service level agreements with [no w o ver 160,000] merchants acro ss the wo rld.” Fo r its ef f o rts, Rearden gets to keep between 6 percent and 25 percent o f every no ntravel do llar spent, depending o n the service. The f irm also makes mo ney f ro m subscriptio ns, and distributio n deals. The f irm’s f irst custo mers were large businesses and included Co nAgra, Glaxo SmithKline, and Mo to ro la. Rearden’s custo mers can co nf igure the system aro und special parameters unique to each f irm: to f avo r a specif ic airline, benef it f ro m a co rpo rate disco unt, o r to restrict so me o f f erings f o r appro ved emplo yees o nly. Rearden investo rs include JP Mo rgan Chase and American Express—bo th o f who m o f f er Rearden to their emplo yees and custo mers. Even bef o re the co nsumer versio n was available, Rearden had o ver f o ur tho usand co rpo rate custo mers and two millio n to tal users, a user base larger than better-kno wn f irms like Salesf o rce.co m.M. Arringto n, “Rearden Co mmerce: Time f o r the Adults to Co me In and Clean Ho use,” TechCrunch, April 5, 2007; E. Scho nf eld, “At Rearden Co mmerce, Addictio n Is Jo b One, TechCrunch, May 6, 2008; and M. Arringto n, “2008: Rearden Co mmerce Has a Heck o f a Year,” TechCrunch, January 13, 2009. Fo r all the pizzazz we reco gnize that, as a start-up, the f uture o f Rearden Co mmerce remains uncertain; ho wever, the f irm’s ef f ective use o f Web services illustrates the business po ssibilities as techno lo gies allo w f irms to co nnect with greater ease and ef f iciency. Co nnectivity has made o ur systems mo re pro ductive and enables entire new strategies and business mo dels. But these wo nderf ul benef its co me at the price o f increased risk. When systems are mo re interco nnected, o ppo rtunities f o r inf iltratio n and abuse also increase. Think o f it this way —each “co nnectio n” o ppo rtunity is like adding ano ther do o r to a building. The mo re do o rs that have to be def ended, the mo re dif f icult security beco mes. It sho uld be no surprise that the rise o f the Internet and distributed co mputing has led to an explo sio n in security lo sses by o rganizatio ns wo rldwide. K E Y TAK E AWAYS Client‐server computing is a method of distributed computing where one program (a client) makes a request to be fulfilled by another program (a server). Server is a tricky term and is sometimes used to refer to hardware. While server‐class hardware refers to more powerful computers designed to support multiple users, just about any PC or notebook can be configured to run server software. Many firms chose to have their server software hosted “in the cloud” on the computers of third‐party firms. Web servers serve up Web sites and can perform some scripting. Most firms serve complex business logic from an application server. I solating a system’s logic in three or more layers (presentation or user interface, business logic, and database) can allow a firm flexibility in maintenance, reusability, and in handling upgrades. Web services allow different applications to communicate with one another. API s define the method to call a Web service (e. g. , to get it to do something), and the kind of response the calling program can expect back. Web services make it easier to link applications as distributed systems, and can make it easier for firms to link their systems across organiz ations. Popular messaging standards include EDI (older) and XML. Sending messages between machines instead of physical documents can speed processes, drastically cut the cost of transactions, and reduce errors. Distributed computing can yield enormous efficiencies in speed, error reduction, and cost savings and can create entirely new ways of doing business. When computers can communicate with each other (instead of people), this often results in fewer errors, time savings, cost reductions, and can even create whole new ways of doing business. Web services, API s, and open standards not only transform businesses, they can create entire new firms that change how we get things done. QU E S TI ONS AND E XE RC I S E S 1. Differentiate the term “server” used in a hardware context, from “server” used in a software context. 2. Describe the “client‐server” model of distributed computing. What products that you use would classify as leveraging client‐server computing? 3. List the advantages that Web services have brought to Amaz on. 4. How has Southwest Airlines utiliz ed Web services to its competitive advantage? 5. What is Rearden Commerce and which technologies does it employ? Describe Rearden Technology’s revenue model. Who were Rear...
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