Cloud Computing in Education

Why Education

Base on our assignment 2, our team analysis how cloud computing change IT infrastructure industry and take IBM as an example,  who is successfully shift its strategy from an IT manufacture to a IT consulting firm and save itself from the edge of death. So in our final reports, we will start introduce and analysis industries which IBM serve for. These industries has changed to be "Smarter" and "Magical" since applied modern technology. Education is one of them.


 


Cloud Computing is an IT term. How this technology influences other industries and brings benefit to the public?



Here, let’ take a look how Cloud Computing be used in education industry.
Nowadays, wireless hardware is widely used in the market with rich information can be acquire from Internet. People want to acquire and enhance their knowledge wherever and whenever. Therefore, Cloud Computing is one of the basic solutions for letting the information available and secure whenever and wherever it’s needed with cost reduction and services optimizing benefit.



IBM announced to have IBM SmartCloud for Education services so as to deliver advance software, computer lab resources and services to students and researches at school, colleges and universities.



Cloud computing bring both advantages and risks to education



The classroom can be anywhere and everywhere.


 


With the help of cloud computing, students can easily install educational mobile apps to download or upload class materials. Students can take advantage of their pockets of time to learn no matter where they are. Take City University of Hong Kong as an example, benefits from cloud computing technology, students can look up database ,update their borrow history and studying status through the universities’ mobile apps.



Moreover, with the further development of cloud computing, information education which based on cloud platform will realize the teaching, management and information exchange. Students also can get online education classes from overseas famous universities.



Lower costs of both hardware and software system construction



Instead of purchasing expensive software and hardware, cloud computing enable people get most of what they need for free or in least prices on mobile devices or even in rural areas.



Another advantage is that educational institutions can avoid high software upgrade costs. When the app is web-based, updates happen automatically and are available the next time you log on to the cloud.



Going Green



Without question, education cloud will surely reduce the carbon footprint to realize Green IT.


 


Privacy Security 
Security problem is a controversial issue in Cloud Computing application. On the one hand, schools can use students' data to analysis teachers' teaching and students' learning performance. On the other hand, how to properly use these data and protect teachers' and students' privacy is still a challenge.



Globalization of education – challenge and opportunity


 
Education is undergoing constant changes under the effects of globalization


The globalization of education brings two challenges to the existing education system and institutes. First, in a context of globalization education is facing new responsibilities which are different from responsibilities under Enlightenment framework. There have been changes in the labour market, which have resulted in calls for more knowledge and skilled workers, and workers with deeper understandings of languages, cultures and business methods all over the world. Thus Education in the new era has to respond to additional demands on awareness of environmental issues, cultural diversity, and increasing competitiveness etc.


 


Second, the globalization of education and availability of information technology increase the intense of competition between education institutes. Remote education and online education provided by high quality university is able to invade into the local education, in economic terms. So community education would have to make a decision on how to adapt to the new environment, the educational market.


 


But the globalization brings opportunity as well. Globalization has brought learning system of education technology and the rapid development of communication around the world. It also changes teacher’s role as well as the students’.


 


2) How cloud computing help to tackle the challenge and seize the opportunity


 


In a boarder level, as for students, cloud computing might be an area for the educational institution to provide faster and much chipper resources with globalization. As for education institutes, cloud computing allows them to deliver education as a global service. By doing that, cloud computing has become a powerful supplementary to education (not limited to postsecondary).


 


There are several good examples for applying cloud computing into education as a responding to the globalization.


 


1) Clouding computing could reduce the cost in applying information technology option. Cloud services are flexible in responding to the demand. Students can get access to as much or as little according to their demand, so as to reduce the waste of cost.


 


2) Clouding computing can help education institutes to aggregate their demand, distribute costs to other partners, for example, colleges that share similar resources, and improve their leverage with vendors.


 


3) One big benefit to education giant like university is that, clouding computing realizes the Global Campus. Today, thousands of universities are providing international teaching and research partnerships using the clouding computing technique.


 


4) Clouding computing delivers Education as a Service. Educational content is increasingly digital Cloud and being consumed on remote storage. Cloud itself is spawning a vast ecosystem of educational resources, which enable educators to deliver education as a service.


 


IBM, as we have discussed in assignment 2, is one of the industry giants who has been developing cloud services on education. IBM has set up a platform to manage this innovation. The IBM Cloud Academy is to provide an organization for K-12 schools and higher education institutions that are actively integrating cloud technologies into their infrastructures to share best practices in the use of clouds and to collaborate with partners to create innovative cloud technologies and models. The IBM Cloud Academy includes participating institutions in a community that helps maximize the benefits of cloud computing investments. By providing a forum for the exchange of best practices, the IBM Cloud Academy is helping member institutions to accelerate the successful deployment of cloud computing models that significantly enhance teaching and learning, administration and research at the university level. Since it was first announced in 2009, the IBM Cloud Academy members have been working collaboratively to:


 


Provide a forum or platform for the exchange of best practices to accelerate the successful deployment of cloud computing models that enhance education. This is also an advantage to IBM in refining and maintaining the system.



Enable member organizations to gain early insight about and access to emerging cloud computing technologies development and research from IBM and partners. This will benefit both parties in the implementation of cloud services.



Develop linkages and contribute to repositories for cloud computing curriculum, tools and resources for teaching, skills development and implementation.



Foster pilot projects and collaborative programs by members to evaluate the technical, financial and service qualities of cloud computing. Risks and uncertainties are minimized.



Circulate our insights, performance metrics, benefits and understanding of cloud computing through communications. This will promote and enhance the use of cloud computing and attract new customers.

Cloud Computing

What is Cloud Computing?

At its most basic level, the "cloud" is simply the Internet, or the vast array of servers around the world that comprise it. When people say a digital document is stored, or a digital task is being performed in the cloud, they mean that the file or application lives on a server you access over an Internet connection, via a Web browser or app, rather than on "local" devices, like your computer or smartphone. (Walter S. Mossberg, 2010)

Cloud computing means “Internet Computing” which is a computing term or metaphor that evolved in the late 2000s, based on utility and consumption of computer resources. The Internet is commonly visualized as clouds; hence the term “cloud computing” for computation done through the Internet. With Cloud computing, users can access database resources via the Internet from anywhere, for as long as they need, without worrying about any maintenance or management of actual resources.
There are 3 types of Cloud Computing in the market:

1) SaaS (Software as a service)

Cloud-based applications or software as a service to run on distant computers “in the cloud” that are owned and operated by others and that connect to users’ computers via the Internet and, usually a web browser.

2)PaaS (Platform as a service)

It provides a cloud-based environment with everything required to support the complete lifecycle of building and delivering web based applications without the cost and complexity of buying and managing the underlying hardware, software, provisioning and hosting.

3) IaaS (Infrastructure as a service)

It provides companies with computing resources including servers, networking, storage, and data center space on a pay-per-use basis.

Cloud Computing Boost the IT infrastructure?

In the past, Company needs to equip traditional IT infrastructure e.g. servers, hardware, licenses and also to install software so to run its business. This is talking about huge investment of a company especially small and medium company.

Recent years, company starts to shift from traditional server-centric approach to a service centric approach because of Cloud Computing developed.

There are several deployment models of Cloud Computing for the company to select so as to fit their business needs. By the flexibility advantage, it’s sooner to be adopted by the market and influence the overall IT industry:

Cloud Computing concept delivers a well-defined set of services, which are perceived by the companies to have infinite capacity, continuous availability, increased agility and improved cost efficiency.

Comparison of Cloud Deployment Models:

How Cloud Computing Influencing the IT Industry

1) Traditional IT jobs are being changed. New skills and specialties are increasingly demanded.

Most of the jobs are outsourced or provided by the cloud providers, most likely the company is not required its IT staff to necessary know how to build the serve, maintain the system, etc.

2) Change on the IT infrastructure.

More applications are being moved to private or public clouds. Software developments and companies have to find ways to create and delivery applications to its target customers.

3) Need for IT support staff is reduced.

4) The effort to maintain the data is diminished.
    
Moving the data to cloud means the company doesn’t require managing the data in house as it already outsourced to the cloud provider. However, it will have another issue that most of the companies are concerning – Security.

5) Security

Security is one of a big concern of Cloud Computing. The Cloud Computing providers their experts on managing the data to their customers.

Cloud Computing Companies in the market

Amazon – Per Jon Brodkin (2009), Amazon is providing web-based computing, offering pay-as-you-go access to virtual servers and data storage space. In addition to these offerings, it offers SimpleDB, CloudFront and the Simple Queue Service to the market. By launching the Elastic Compute Cloud in 2006, Amazon has become almost synonymous with “cloud computing”.

Google – Google started to release App as part of the company business than consumer search market. It mains focus is crawling, the Web and delivering advertising-supported search result, it provides software-as-a-service applications for business is hastening the industry’s move from packaged ssoftware to Web-hosted service, and App Engine provides a credible alternative in the PaaS market.

Microsoft – Microsoft’s is the first big foray into the cloud as it develops the operating system for home and work computers. But with all forms of application moving to the web-hosted model, it make Windows available over the cloud e.g. Exchange, Sharepoint, Office Communications, etc.

Industry Profile Report

Cloud computing offers tangible benefits to the real world businesses that need to meet the demands and take advantage of the opportunities. As the world grows smarter, cloud computing offers ways the organizations can work more efficiently and productively, simultaneously saving money and enhancing the business and IT operations. It helps the companies in cutting down the operating costs compared to tradition IT approach.

As you can see on above figure, there has been a drastic increase on cloud services. Global spending on cloud services is expected to grow 18.6% in 2012 to $110.3B, achieving a compound annual growth rate of 17.7% from 2011 through 2016. The total market is expected to grow from $76.9B in 2010 to $210B in 2016.

IBM is one of the key service providers of the cloud computing technology and it has put a lot of effort in improving the platform. The fiscal year 2014 cloud revenue was $7 Billion and it was a 60% increase from fiscal year 2013. IBM predicts that by 2016, there will be an 11% shift of IT budget away from traditional in-house IT delivery, toward various versions of cloud computing as a new delivery model. By 2018, more than 60% of enterprises will have at least half of their infrastructure on cloud-based platforms.
Opportunities of Cloud Computing

1. Globalizing the workforce that worldwide employees can access the cloud provided they have an internet connection. Improved flexibility in case of sudden change in processes.

2. Reduced spending on technology infrastructure by minimizing the licensing of new software and the need of IT staff.

3. Easy partnering with other organizations in exchanging data and information.

Pitfalls of Cloud Computing

1. Possible downtime without internet connection

Cloud computing is totally dependent on the internet connection. When the internet connection or network is down, cloud services are down as well. If the connection runs slow, then the services will also run slow and be delayed. The operations may become idle if one does not have a backup or alternative internet connection. Even if cloud computing providers take precautions to ensure that the network has a great uptime, the risk always remains.

2. Security and privacy issues

Although security in the cloud is generally good and reliable, there are still serious security concerns that hackers can attack and breach the system. As the servers are interconnected in the cloud, hackers can breach one system and then make their way into other linked systems. Privacy is another area of concern. If a user can log in from any location to access data and applications, it’s possible the user’s privacy could be compromised. There are still chances they private data are revealed.

3. Cost

Analyzing cost and savings before implementing Cloud computing is always an important task. For a small business enterprise a cloud computing application may appear to be a lot cheaper than installing a particular software solution. On the other hand, it may appear expensive to set up cloud computing on a small-scale basis. The company needs to check if the cloud application has all the features that they intended to have and if not, they need to evaluate how important the missing features are to them. Also if a company has a specific IT needs, they may be better off with custom-designed software than general cloud based application software. It is also important to analyze the plan and fee structure of the cloud computing services being used.

Factors that drive technology leaders to manage Cloud Computing

1. Add on service

Knowing that Cloud system needs to maintain regularly and improve at certain of time. In addition, companies might want the Cloud or the services within it to be re-designed to fit their needs. Cloud suppliers can keep offering all these services to their customers once they purchased the package. Unlike traditional IT infrastructure and software, the suppliers can keep generating business in this way.

2. Operational and development advantages

Cloud applications are true cloud applications are based on multi-tenancy. All customers make use of the same configuration. Instead of installing and maintaining a server or separate configuration for each customer, all customers use the same one. Patches and bug fixes only need to be applied once, and upgrading to a new release immediately moves all customers to the latest version eliminating the substantial cost of needing to maintain old releases. On the development side the advantage is the number of platforms. One no longer needs to build and maintain a Windows, Unix and Mainframe version, rather, offers only a cloud version. There is no need to maintain many versions, releases, and platforms and that makes an
enormous cost difference to the supplier.

3. Flexibility

All of the Cloud customers do not want to use an identical system. They will want to be able to customize the service to their specific needs. Early cloud application suppliers have invested substantially in building a specific new development platform to do this. Such a platform typically includes a menu system, a user rights administration system, a reporting system and many more items that traditional software suppliers had to build before they could start developing their core functionality. Several of these early cloud providers took their development platform and offered it to other cloud providers as a platform or as a service to generate business.

Characteristics of Cloud Computing

The market for Cloud computing is booming for the past a few years. It is become a business solution for a wide range of fields, from government to financial sector. There are some key structure characteristics of the technology in application.

1.      As a business solution

One of the interest characteristic of Cloud computing lies in its product nature as business solution, which means as a product in market it won’t be affected by economic downturn. As the Vice President, High Performance On Demand Solutions, IBM, Willy Chiu, admitted,“No matter how compelling the economics are, cloud strategies can’t run counter to business strategies” (Miller, 2008)

IBM has been expanding the scope of cloud computing service from verification procedures for service providers to cloud consulting services. More recent plan of IBM cloud computing service is targeting at the growth of cloud computing on several levels, and provide some services for customers’ own infrastructure, while providing the hardware, construction and consulting companies to establish their own "private cloud."

2.      Enter Strategy

There are two ways to adopt the cloud computing system for companies. For the first, partnership with technology players is the key step in adopting cloud computing. To build up its cloud computing system, company should partnered with several technique provider, such as hardware providers e.g. IBM or HP, and then software specialists such as Citrix Systems. The partnerships with technical giant would help target companies reduce the time cost and also risks that is related to technical problems. An alternative way to establish a cloud system for the company is that purchase built-models from service providers, or even buyout. One prominent case would be, AT&T who bought application services provider USInternetworking (USi) in 2006 for US$300 million in order to develop capabilities in delivering on-demand services and managed enterprise software solutions (Capgemini, 2010).

3.      Production cycle

Compared to classic way of doing computing, the benefits of the cloud that it actually helps company reduce their concern on managing computing systems. However there is another side of the story. One of the unique features of information technology application, especially the software, is that the production cycle is very short, though the money cost for update is relative low. And once the

4.      Information Security

When applying a cloud computing, it means company is giving up a certain degree of control over a number of services, for example operating system configuration in a Web-based contract (EDUCAUSE, 2012). Another unusual characteristic of cloud computing is the multitenancy, which means that different, unrelated customers will be sharing hardware resources, especially the  memory and storage. Not only suffered from risk of data leakage, but also there are risks of sharing resources. Multitenancy exploits are very worrisome because one flaw could allow another tenant or attacker to see all other data or to assume the identity of other clients. Several new classes of vulnerabilities derive from the shared nature of the cloud. Researchers have been able to recover other tenants' data from what was supposed to be new storage space.

Thus, Clouding computing brings business opportunity but new challenges to IBM customers as well. In order to tackle the problems, customers need a proper planning, to manage the disruptive nature of cloud computing with the help from IBM. Customer has to change their traditional management way in order to get adapt to the cloud computing.

New analytical framework and Suggestions

Because of the nature of the product, the risk management should be on the top of concerns when company decides to introduce in a cloud computing system. One usual misunderstanding on cloud is that, by applying the cloud computing, company is avoiding all security problem in their side.  

1.      Contract

Different from traditional information security control, company using cloud computing should apply access control and compliance solutions on both sides of these interfaces, companies and cloud service providers. In the case, a solid and specific security contract should be signed between the customer and Cloud computing service vendor. The contract could at least ensures that the company obtain security commitments from service provider in writing.

2.      Audit

Another way to reduce information leakage risk is to doing regular based audit. First, the customer should determine what information will be involved and the security classification of the information. That helps customer to determine what part of the information should be mitigated locally and what information be obligated to service provider. Cloud service Employees could get access to sensitive information like financial, personal information of the client organizations. Auditors from customers will be glad if they could see procedures and policies that reduce access to information as much as possible and provide oversight and training for anyone who does retain access.

3.      Information Security Software

Other suggestion includes security software, which is able to leverages a cloud-based threat protection network, by preventing malware email threats before they reach company’s workstation. 

IBM’s Strategic Change

It might surprise the world that the American giant International Business and Machines, short for IBM, has already shrink the percentage of manufacturing hardware to 20% of its total business.(Online Source: "Smart" Change in Strategy The Journal Of JVBL Values Based Leadership 2011.)The remaining 80% is the IT consulting service based on cloud computing. The shift of its core business indicates that IBM has changed its corporation strategy direction from hardware manufacturer to consulting program-shared one word Smart, which offered in 2008. The aim of Smart Planet is to take advantage of IBM’s technology advantage to help its clients capture the potential of these smarter system to achieve economic growth.

IBM’s Strategic Approach

1 First Mover Approach

IBM is not only a leader in cloud computing but also the first one to present an image as a B2B IT consulting company.

Obviously, “company that introduces a new technology many earn a long-lasting reputation as a leader in that technology domain.” (Melissa A. Schilling, (2012). Strategic Management of Technological Innovation. 4th ed. London: McGraw-Hill/Irwin.) According to Melissa, such a reputation can help the company to acquire brand loyalty and market share, this advantage is sustainable, even after competitors have introduced comparable products. So being a first mover can transform this advantage into sustainable profits. (Melissa A. Schilling, (2012). Strategic Management of Technological Innovation. 4th ed. London: McGraw-Hill/Irwin.)First Mover approach combines with IBM’s technology advantage enhance its leadership and brand loyalty in IT industry at the same time, it also rise buyer switching costs potentially which help raise competitors’ entry barrier.

2 Smarter Marketing Strategy

IBM finds a theme around its vision to promote its concept. This theme integrates its different programs into a brand family and also expand its meaning beyond IT area. IBM's consulting programs all share one common characteristic: the word SMART - or a derivative thereof - typically precedes the name of the specific consulting program involved. This method helps IBM’s smart area become borderless. IBM received several awards for its branding and marketing efforts around Smarter Planet, including a “Gold Global Effie” for the most effective global campaign.(Online Source: IBM 100 2011.)

3 Collaboration Innovation

Through establishing Collaborative Innovation Centers and University Awards, IBM builds connections with universities to boost its Innovative capability.
By cultivating T-shape Professionals (depth and breadth) through education and training, IBM Collaborative Innovation Centers (CIC) tries to build competency for new technology and design a regional workforce with T-shape Professionals who are adaptive innovators, highly-socially networked, lifelong learners, and make excellent entrepreneurs to putting knowledge to use and creating direct impact on economic growth.
In this collaboration innovation system, government can act as a public entrepreneur and venture capitalist. This collaborative method enable IBM connect with regional government, academic institutions and business to accelerate research innovation into markets and driving regional economic development.

Strategic Fit Assessment

1. External Environment

As many economics around the world were slowing, both business and governments were looking for ways to rebuild their infrastructure to be more cost-effectiveness. IBM captured this change and believe this is a golden opportunities to address this problem and challenge. That is the original idea of IBM’s smarter planet. Soon it became the overarching framework for IBM’s growth strategy.

IBM’s Smarter Planet vision was driven by three I’s—instrumentation, interconnectedness and intelligence. From smarter power grids, to smarter food systems, smarter water, smarter healthcare and smarter traffic
systems.

2 Internal Environment

In the early 1990s, IBM faced a fierce competition. Its stock price was the lowest it had been since 1983. (J. Bruce Harreld &Charles A. O’Reilly III &Michael L. Tushman. (2006). Dynamic Capabilities at IBM: Driving Strategy into Action. Stanford Business. 49 (1), pp.3) By 1992, the company was almost failing. After rethink its business model, in order to cut down cost and increase revenue, top managements decided to change its corporate strategy, make IBM to be a broad-based solutions provider from a technology company.

3 Strategic fit analysis

IBM is the leading player in the application infrastructure, software and big data market. (Market line, (2012). Company Profile: COMPANY PROFILE International Business Machines Corporation. 38 (3), pp.4) Its competitive advantage is technology advantage and strong R&D ability. Since the corporate strategy has shift to solutions provider role, IBM’s company vision changed to become the best solution provider. IBM focus on continues investment in R&D and innovation. Its leading advantage in big data field combines with cloud computing technology to achieve information insight to provide its customers professional IT consulting service. Now IBM has 12 labs across 6 continents around the world. (Online Source: IBM corporate (2011). IBM research. [ONLINE] Available at:
http://www.research.ibm.com/labs/. [Last Accessed 10/04/2015].) Taking advantage of its resource and core competitiveness, IBM’s strategy change helps IBM capture times’ opportunity and survive from nearly death in 1993.

4 Lessons Learn from IBM

1. Changing times can imperil even the most successful companies. Hubris is a business killer, transformation is a continuous process that can never end. Managements should face the change they face and success comes from leadership.

2. Long-term thinking sometimes may lead to a safe, steady but conservative outcomes. This thinking pattern sometimes impede companies to transformation or change easily when external environment has been different.

3. At last, the most important one lesson is that “Soft” Capabilities like the ability to reallocate and reconfigure sources must be developed over time. Such Dynamic ability is important to companies especially to some big computers, it is not easily for big companies to be dynamic, such dynamic ability is such important under this situation.

Reference:
The Journal Of JVBL Values Based Leadership (2011). "Smart" Change in Strategy:
IBM'sResponsetoChallengingTimes.[ONLINE Availableat:http://www.valuesbasedleadershipjournal.com/issues/vol4issue1/strategy.php. [Last Accessed 09/04/2015].

Melissa A. Schilling, (2012). Strategic Management of Technological Innovation. 4th ed. London: McGraw-Hill/Irwin

IBM100 (2011). Smart Planet. [ONLINE] Available at: http://www-03.ibm.com/ibm/history/ibm100/us/en/icons/smarterplanet/
[Last Accessed 10/04/2015]

J. Bruce Harreld &Charles A. O’Reilly III &Michael L. Tushman. (2006). Dynamic Capabilities at IBM: Driving Strategy into Action. Stanford Business. 49 (1), pp.3

Market line, (2012). Company Profile: COMPANY PROFILE International Business Machines Corporation. 38 (3), pp.4

IBM corporate (2011). IBM research. [ONLINE] Available at: http://www.research.ibm.com/labs/. [Last Accessed 10/04/2015]

Walter S, Mossbery. (2010, May 6). Learning About Everything Under The 'Cloud'. Retrieved from http://www.wsj.com/articles/SB10001424052748703961104575226194192477512

Job Brodkin. (2009, may 18). 10 cloud computing companies to watch. Retrieved from http://www.networkworld.com/article/2268033/virtualization/10-cloud-computing-companies-to-watch.html

Miller, Rich. 2008. IBM Targets Cloud Services Market. Available from http://www.datacenterknowledge.com/archives/2008/11/24/ibm-targets-cloud-services-market/

Capgemini, 2010. Cloud Computing The Telco Opportunity Telecom & Media. Available from Insightshttps://www.capgemini.com/resource-file-access/resource/pdf/Cloud_Computing_____The_Telco_Opportunity.pdf

Brukbacher, S. 2012. Practical strategies for managing the risk in cloud computing. Available from https://net.educause.edu/ir/library/pdf/ERB1103.pdf

How Polaroid Finds FUTURE Today?

Company Background

The Polaroid Corporation was founded in 1937 by Edwin Land. While its early products focused on everything from eyewear to gun sight filters, the company was most famous for its innovative instant film cameras that hit the market in 1948. At the beginning, Polaroid technology was used by military personnel, such as in aviator goggles. During the next three decades, Polaroid became one of the most successful technology companies in the post-war era.

After the war, Land was on a beach with his daughter, who asked why she couldn’t print out photographs from a camera, so he turned his attention to producing a product that could. This lead to the creation of the Polaroid instant camera. The instant camera became widely used both in the consumer market and in the business market for such purposes as driver's licenses, crime reports, and real estate advertising. Now Polaroid's core business is the design, manufacture, and sale of instant photographic imaging products. In instant camera industry, Polaroid has been a synonym for instant camera.

Industrial Analysis

Industry overview

Photographic products including cameras, camcorders, optical instruments and other photographic equipment. Leading players on the world photographic products market include Fujifilm, Casio Computer, Kodak, Sakar and Panasonic. Samsung, headquartered in South Korea, employs over 220,000 people worldwide and operates almost 340 offices throughout 58 countries. Leica, Hewlett-Packard, Sanyo, Sony and Toshiba are also leaders on the market. Camera industry is only a market-line of the photography industry. With technology constantly evolving to offer more options and to greater ease of use, consumers are eager to keep up with the times. Companies will continue investing in research and development to stay at the industry’s cutting edge. In addition, demand will be driven by new technologies. However, the market is also threaten by the development of smartphones and other handheld devices. As smartphones and other handheld devices like tablet PCs have cameras of increasingly better quality incorporated, they will continue to eat into the camera market.

While within the camera industry, it was divided by traditional film industry and digital camera division. Despite the dominance of digital cameras, it hasn’t killed off film photography entirely. Instant film is among the film segment. Unlike standard film, instant film doesn’t need to be consistent. It was a one-step, one-minute process that produced a fully finished photograph, something no one had ever seen before. This process was the beginning of a new genre of creating photographs called instant photography. Major players in this niche market are Polaroid, Kodak and Fuji. Polaroid dominated the market for this unique and easy photographic process. By 1989, 42% of Polaroid's research and development funding was being spent on digital imaging. By the late 1990s Polaroid was a top seller of instant cameras. But unfortunately, Polaroid fails to adjust the business environment as the introduction of digital camera to the masses in the late 90s. Technology innovation change the big picture of the whole industry, but Polaroid did not adjust to the market reality, between 2001 and 2009, Polaroid filed for bankruptcy twice.

Supplier Bargaining Power: Weak

As instant photography is belong to traditional film industry, the supplier of instant camera companies are the film manufactures. Instant cameras companies rely heavily on the traditional film makers. As the shrink of the whole traditional film industry, more and more companies have exit the industry, even though film makers are significant to the instant cameras manufactures, the supplier bargaining power is still weak. Also instant cameras makers can enter its suppliers’ industry to threat the suppliers which drives the bargaining power of the suppliers is become even weaker.

Threat of New Entrants: Weak

Polaroid has dominated in the instant camera industry already, currently Polaroid has become sign of instant camera industry. So it is costly for competitors to enter into the industry to shake the status of Polaroid. Brand loyalty is another barriers to entry. Polaroid also won customers’ brand loyalty already. It is cost to shake a major players’ status and change customers’ brand preference. The greater the costs are that potential competitors must bear to enter the industry. So the threat of new entrants is weak.

Threat of substitutes: Strong

As mentioned above in the industry overview part, photographic companies will continue investing in research and development to stay at the industry’s cutting edge and the market is also threaten by the development of smartphones and other handheld devices. Technology changes the big picture of the whole industry and customer habits. The whole industry is changing rapidly and both dynamic and weak. So the threat of substitutes are strong.

Industry Rivalry: Strong

The competitive structure of an industry refers to the number and size distribution of companies in it. In instant photography industry, this niche market is dominated by a number of large companies (an oligopoly) in this kind of industry, players are often in a position to determine industry price. One company’s competitive action or move will directly affect the market share of its rivals and thus their profitability. Rivalry become strong as companies attempt to undercut each other’s prices or offer customers more value in their products, pushing industry profits down in the process.

Buyer Bargaining Power: Strong

For Polaroid, its instant camera business is its core business. The company’s profitability is heavily relies on the number of instant camera sales. In other words, the company Polaroid depends on the buyers for a large percentage of its total orders. In this situation the buyer bargaining power is strong.

Journey of Polaroid

February 21, 1947 – Edwin Land demonstrated the instant camera at a meeting of the Optical Society of America in New York City.

Conception of Land’s camera

(Online Source: from http://www.edn.com/electronics-blogs/edn-moments/4407362/Polaroid-introduces-the-instant-camera--February-21--1947)

1948 – Polaroid Land Camera Model 95 was on sale at the Jordan Marsh department store in Boston for $89.75.

The Sales and profit of Polaroid grew at an annual rate of 23% and 17% respectively when they launched its instant film cameras to the market.

1963 – Polacolor file was introduced to the market which enabled the cameras to produce color pictures.

1975 – Polaroid introduced SX-70.

(Polaroid advert from 1975 / Flickr user Nesster)

1977 – Polavision (instant movie system) was launched to the market in 1977.

1980 – Edwin Land resigned as CEO of Polaroid.

2001 –Polaroid’s stock price was decreased from $18 to -$6 in Q4 of 2000 that made them finally needed to filed for Chapter 11 bankruptcy protection.

(Stock price of Polaroid in 2000 and 2001)

Reason of success of Polaroid

Had a great founder who always bring innovative ideas to the company

-          Land’s who was the founder of Polaroid. He was an inventor with many great innovative ideas came to the market. He received 535 United States patents.

-          He started to invent the first instant camera by her daughter.

http://electronics.howstuffworks.com/29594-invention-the-first-polaroid-camera-video.htm

Discovery Channel's "Invention"

Be the market leader of instant camera and film

-          Brand became the name of the end product itself

-          People said “Polaroid” to represent “a photography”

Market strategy of Polaroid – Differentiation

-          Built Polaroid as a cult status to maintain it’s competitive and increase the loyalty of its customers. E.g. the Muppets appeared in a number of commercials for Polaroid cameras that created a image of “Polaroid means fun”.

-          Worked with Ansel Adams, an internationally acclaimed landscape photography and other artistes, photographers, etc. to establish Polaroid as a potential art form.

 

Advertising of Sesame Street (Online Source: http://muppet.wikia.com/wiki/Polaroid)

Packaging of Polaroid SX-70 (Online Source: http://giam.typepad.com/the_branding_of_polaroid_/page/3/)

Reason of failure of Polaroid

Poor manufacturing decision

1)    Broke off relations with Kodak

Polaroid decided to develop “opacifier” (chemical compound that would cover the picture when it had developed” by themselves so to make their relationship with Kodak became worse.

2)    Focused on non-core part of instant camera

In order to compete with Kodak, Polaroid decided to make their instant camera more complex, they decide to fit battery to every film.

Due to technology issue, they decided to produce battery in-house.  Polaroid had become a fully vertical-integrated manufacturing company.

Changing of market that make Polaroid lose most of the market share

1)    More affordable conventional cameras launched to the market

2)    Emergence of one-hour photo shops

The strategy of Polaroid is low cost of camera but costly films, so once the above trends were appeared in the market in early of 80’s. The market share of Polaroid in US was losing quickly because people could get high quality photos in an hour instead of waiting a week. The quality of the photo is much cheaper and better than Polaroid. From below chat, the total number of photos taken each year was almost the same as “Polaroid” but it was falling down sharply in 2000 because of the market has been changed. The number of photos taken each year was kept raising with an increasing percentage.

Polaroid failed to notice this market signal that was surely harm their business. Moreover, with it slowly reaction to the market changing, they finally needed to file chapter 11 in 2001.

(Online Source: http://www.brainpickings.org/2012/09/27/instant-the-story-of-polaroid/)

Lack of market research so as to make them became a late adopter

Land was focused on engineering to see how to breakthrough some technical problems that bring quality instant film to the market. However, he forgot to do market research to understand the needs of his customers’ needs that make them difficult to change themselves into a digital-imaging company and win back the market share that losing because of the popular of home computers and digital cameras. People now can not only take pictures but also can view them instantly and sent them to your friends via computer at a comparative lower cost than using “Polaroid”.

The Polaroid Corporation was once a very successful company on technology. In early 1950s, Polaroid had introduced the world’s first innovative instant film cameras which was its greatest technological breakthrough. The cameras quickly dominated the market after release and was rated one of the most innovative products in that era that changed the life experience of many people. The technology invented had very high potential driving up the sales of the cameras bringing exponential profits to the company. One of the largest advantages of using the instant film cameras is that it consumes instant films, which are consumables made by Polaroid itself and also Kodak. The average retail price point of Polaroid’s cameras was about $80 and the film itself costs about $1.75, which was considered to be quite expensive relatively. Kodak was the main manufacturer of instant films in the market that time and it monopolized the market after Polaroid’s instant film camera become available. Billion rolls of instant films were produced each year to cope with the rising demand. Kodak firstly saw it as a great opportunity to ride on Polaroid’s back to enhance its sales but ended up making a strategic decision to release its own instant film cameras which are compatible with their own instant films. Kodak turned out to be Polaroid’s major competitor in the industry.

Polaroid’s instant film camera business had gone into an extremely difficult situation after the invention of digital cameras in 1990s. The digital technology brought the photo-taking experience from paper to computer. No consumables such as instant films needed for functioning which makes the usage of digital cameras more economical and planet friendly. Another advantage of digital cameras is that they are lighter and more compact in size making it more convenient in transportation. In a technological point of view, digital cameras allow the user to choose and edit the taken photos whenever and wherever they desire. In a functional perspective, digital cameras are installed with different settings that well assist the user in shooting any kind of pictures under any kind of situations, unlike Polaroid’s “one button” approach. Digital cameras had filled in the gaps Polaroid’s instant film cameras failed to deliver since they first hit the market.

Nowadays in 2015, the consumer focuses on “smart” technology. All newly released phones are integrated an digital camera, therefore, the desire on getting a separate one is getting less and less. The world pays so much attention on the release date of the next generation smart phones rather than expecting what Polaroid’s instant film cameras are capable to offer in the near future. No doubt smart devices are dominating the digital market and gradually replacing the open price point digital cameras and most importantly, Polaroid’s instant film cameras. Smart phones such as Apple’s IPhone and Samsung’s Galaxy change their design and develop new innovative technologies in each generation to fit consumers’ needs from time to time, including water resistance and finger print security systems. Both manufacturers are very successful in capturing consumers’ needs and expectation and applying on to their products. There are so many designers and engineers working behind the screen in generating new ideas on the outlook, interface, and technology on the phones in order to stay competitive in the market. Polaroid is in comparative advantage due to the look and function remains identical from years to years, without any impressive development. Although Polaroid released its first digital camera in mid 1990s, it was too late to retain the consumers and they lost the market share in the industry.

The Forecast and Problems of Polavision

Polaroid is an innovation-driven company. Until nowadays, Polaroid’s instant cameras remain among the most popular consumer-electronics products. There was once a big move of Polaroid to extend the Polaroid – the still image camera – into Polavision, which made instant movies by capturing an amazing eighteen instant photos a second, courtesy of a handheld camera that used handy film cartridges. (McCracken, 2009) And thus in 1977, with the consistent efforts of its founder Edwin Land, after years of development, the company launched Polavision instant movie. However, the amazing engineering achievement brings a catastrophic failure.

Forecast by Polaroid on Polavision:

1.    Innovation leads the demand. The management team of Polaroid (actually mainly the founder, Edwin Land) holds a belief that technology innovation always creating a consumer demand. Edwin Land was convinced that he needed to take his instant photography concept from the portrait camera to the movie camera. He believes that Polavision will be as successful as SX-70, which dominates the market, so he start the project and launch the Polavision in 1977. (Brown and Vestal, 2008)

2.    Revolutionize moviemaking. Land believed Polavision would revolutionize moviemaking. Polaroid assumed that Polavision will occupy a unique position as an image-making technology. They believed that Polavision would not only change the way movies were made, but also would alter the way people perceived and experienced the world. Following the development and commercial success of instant still pictures, Polavision was touted as the “the second revolution in photography.” just as instant still images, Polavision offer a “new way of responding moment by moment to the scene around you”. (Czach, 2002)

3.    The self-contained system. Polaroid Company had dominated instant photography market for 30 years until 1970s. They have shifted from the black-white format to color system. All these products share the same system: a camera and a proprietary film pack. This design was lucrative for the company because no others players could get in. Under this consideration, Polavision was designed as a combination of a movie camera, a film cassette, and a tabletop viewer. Every element of the system was incompatible with the rest of the photographic industry. Even the film could not be viewed with the incumbent projection equipment.

4.    A new system for television. In his attempt to map out a revolutionary new moving image terrain, Land was insistent on developing a language specific to Polavision. The film was not simply film but phototape, and the projector was not a projector but a player. This new language aligned Polavision with both television and emergence of mass consumer video technology. Land described the system as “the current American modality of television”. While polavision claimed to offer the convenience of television, it produced a photomechanical film image rather than an electronic image.

Weak assumption behind the forecast

Despite internal concerns, Polarvision was released to an under researched market and was quickly overpowered. The management at Polaroid had not taken the necessary precautions to reorganize their company structure for more productivity in a new market. Once again, Polaroid released a product to market that had not been properly given market research.

1.    False belief on “Innovation leads demand”. Many cases have shown that this theory does not work all the time, especially when there are cheaper products that provide a similar function.

2.    Rising VCR producers. VCR has started gaining mass market traction in 1975. Six major firms were involved in the development of the VCR: RCA, JVC, AMPEX, Matsushita Electric / Panasonic, Sony, and Toshiba. The VCR started to become a mass market consumer product in late 1970s, so Polavision is not a unique product on home movie shooting at that time. What is even worse, Polavision was costly ($675) and the movies it created were short (two minutes and forty seconds) and without audio. The movie could only be watched on the bundled tabletop screen. Former Polaroid freelancer Paul Giambarba remarked:“I tried using the product but it was obviously a turkey compared to anything I was using that Kodak offered, Instant movie film was an engineering achievement but it’s precisely what separated Polaroid techies from Polaroid pragmatists. There just weren’t enough customers out there on whom to work the magic.” (Lefler, 2010)

3.    Self-contain systems. Self-contain system deprived Polavision of the chance of being a supplementary to the widespread Videocassette recorder in the late 1970s. One observer wrote in 1979, he was curious to know if photo tape could be used with the Kodak color film video players that play Super 8mm films through TV sets. If it could, the Polavision camera would be a low-cost field camera. Quick processing, the system could offer a supplementary module to a videotape operation. However, it would not work. (Lohmann, 1979)

Factors on forecast failure:

1.    Being a charisma founder and also leader of Polaroid, Edwin Land has too much influence on the company. Even Polaroid’s president Bill McCune was highly skeptical on the project, the project had been in the R&D pipeline for over a decade and was championed personally by Edwin Land.

2.    Past successful experience made Polaroid careless in making market decisions. Polaroid's hubris was assuming that customers would always want a physical copy of their photos, which allowed the company to become too dependent on its instant film business.

3.    Being blind on the market. The incumbent president McCune felt that Polaroid was investing too much into a new technology bet which “lacked any type of market research” (Lefler, 2010).

Recommendations

1.    Company should not hold by a charisma leader. The power should be distributed.

2.    Market research before and during the development of new products is very important.

Reasons of Polaroid’s failure

Polaroid's instant-film business started to fade to black in the mid-2000s. Sales declined nearly 25 percent annually for several years. When the Polaroid film factory in the Dutch town of Enschede shut down in June 2008, it signals that Polaroid camera, one of the world’s most ingenious and popular innovations----Polaroid’s instant camera could be history as digital cameras flooded the market.

Why was Polaroid unable to capitalize on its success and unable to make the transition to digital photography successfully? The fundamental reason is that Polaroid’s top management did not follow and capture the market trend.

First, Polaroid leaders believed that customers would always want a hard-copy print. They deeply believed that as electronic imaging becomes more prevalent, there remains a basic human need for a permanent visual record. Through the 1990s, Polaroid executives continued to believe in the importance of the paper print. When customers abandoned the print, Polaroid was taken by surprise. "It's amazing, but kids today don't want hard copy anymore," said DiCamillo, CEO from 1995 to 2001,"This was the major mistake we all made: Mac Booth, Gary DiCamillo, people after me…. That was a major hypothesis that I believed in my marrow that was wrong."

Second, Polaroid’s managements failed to shit its business module. As instant film was the core of financial model of this company. So if change Polaroid’s business module, it means managements have to replace it with something that was equally profitable or approximately as profitable. The instant film business profit accounts for more than 65% of the company’s profits which created an obstacle to think about new business models.

What we learn from Polaroid’s failure

From Polaroid’s fail experience we can acquire valuable experience that business innovation is about new value, not new things. Innovation is relevant only if it creates value for customers------and therefore for the firm. Thus creating “new things” is neither necessary nor sufficient for business innovation. Customers are the ones who decide the worth of an innovation by voting with their wallets. It makes no difference how innovative a company thinks it is. Polaroid did not have enough courage to replace its profitable business to shift its business model and structure cause the end of itself. They forgot actually what matters is whether customers will pay. The technology companies that succeed will be those that have developed skills at listening and a sophisticated understanding of their customers’ industries.

Polaroid’s instant film business’ fail has some similar with the Nokia. Both of these historical brands fail to react to the changing business environment. Top managements did not capture the opportunities and react immediately when the industry has changed. Technology development can both change the industry profile and customers’ thinking and habits. When Edwin Land first invented his camera and film, he imagined that instant photography would change people's lives. He said that the camera should "go beyond amusement and record-making to become a continuous partner of most human beings... a new eye, and a second memory." Land did not realize how right he was. When he wrote those words, the camera was a bulky appliance, and the print was stored in a heavy album. Today the camera and hundreds of images, which are produced instantly, can be carried in one lightweight device. Now that the camera has been joined to the cell phone and other handheld devices, it is truly "a continuous partner of most human beings." Ironically, the fulfilling of Land's vision led to the end of his company.

How Polaroid help itself find future in digital times

Now Polaroid is working hard to find a future in the digital times. Polaroid has tried to venture to find new product categories. They tried to enter into an adjacent category and building around their core business. While the company’s core business was instant photography, Polaroid has expanded beyond photography; into tablets, televisions and other digital media. But Polaroid had to tread carefully so as not to weaken the brand. It went through a process of dissecting the brand’s DNA to understand the attributes of the brand and how it was perceived by the customer. One of the success attempt is the television business, Polaroid used its technology to produce the core component of the technology that allows you to view the picture on a flat-screen TV. “Almost every LCD flat-screen television has a polarizer on it.” Polaroid’s current CEO Hardy said. With no doubt, Polaroid had paid great price for its mistake, now this brand which has rich history is trying hard to stay its brands’ DNA as well as to find a new business model at the same time.

Reference:

<Q&A polaroid eyewear history & facts> 30 June 2011 marketing Week




<Finding a Place for Polaroid in the digital age> Posted on August 14, 2013 by Cassandra Rowbotham

<What was Polaroid thinking?> Posted by the Yale University

<Polaroid, Kodak, Apple: No One Escapes the Winds of Creative Destruction> Forbes, Sept 5, 2012.

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