Technology Can Save Your Business Too

July 28, 2008

I commented last week on how many businesses are turning to innovative telephony services such as conferencing to avoid the high costs associated with employee travel. Today while reading about Netflix’s second-quarter net income, which climbed 3.8%, I thought to myself “How did they do it?”

In the middle of googling for other reports about Netflix it hit me – technology is saving their business!

As the price of gas continues to rise, so do the cost of going to the movies. As a result, more consumers are staying at home to watch movies & many of them are renting those movies through Netflix. Unfortunately for Netflix, higher fuel prices are also driving up the costs to deliver movies to the consumer’s mailbox. Netflix’s margin is already pretty thin & those margins can be completely eaten up if you have a consumer base that is exchanging movies almost as fast as they get them. Netflix’s subscritpion model allows their users to exchange as many movies as he/she wants per month & their subscription fee stays the same. This model works very well for the consumer & until recently worked for Netflix too.

Rather than drastically changer their model & risk loosing existing subscribers, Netflix responded with an innovative solution using technology to their advantage. This new solution actually provides more to the consumer & cleverly works in Netflix’s advantage too!

First Netflix began offering a “Watch Instantly” option from their website. Users were allowed a certain amount of hours per month to watch streaming movies to their PC for free. Netflix realized very quickly that this feature resulted in the shipment of less movies to their consumers because they were watching more movies on-line. The costs for Netflix to offer live streaming videos versus mailing movies was significantly less & they quickly removed any maximum on the amount of viewing hours they offered to their users in hopes that the number of shipments required would continue to drop while usership would continue to rise.

Netflix also just announced a deal with Microsoft to stream movies directly to a user’s Xbox 360 game console. It obvious that Netflix is looking to offer their consumers as many options as possible to view movies as long as it doesn’t involve shipping that movie to the consumer. Again, the rationale being that as more users view their movies on-line, the less likely they are to order their movies through the mail & the net result is higher margins & ultimately more profits for Netflix.

Each day I imagine more things that companies can do with technologies to save their company time, money, & resources. One of my greatest pleasures at work is seeing so many companies actively taking advantages of the technologies that we & Jaduka have developed to save money & improve their business processes with communications.

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Using Innovative Telecommunication Products to Save Money

July 23, 2008

Let’s face it, the costs associated with travel are only going to continue to rise & as a result company travel budgets will be strained. Whether we are talking air travel or simply getting in a car to commute for an across town meeting, rising fuel costs are affecting all modes of travel. At NetworkIP & Jaduka we have over 300 miles separating our three offices located in Texas (Austin, Dallas, & Longview). We are part of a growing number of companies that are reducing the number of face-to-face meetings that we have with our teams in order to save money.

Telecom technologies such as voice, web, & video conferencing that have been around now for many years are really beginning to experience an upswing in their usage. We have always taken advantage of our own audio & web conferencing services & today that statement is truer than ever. Given that we can host up to 50 participants on a single conference call & because everyone at the company has access to the conferencing product we host conference calls all day long for any number of reasons. After adding document sharing capabilities to our web conferencing solution a few years back it really did become hard to justify traveling between offices for presentations.

In just the past few months, we’ve seen significant increases in the volume of conferencing minutes hosted through our solution. While a good portion of this increase in conferencing minutes is a result of the new applications & services from 3rd party developers that are using Jaduka’s conferencing API (announced at the Web 2.0 Expo in April of this year), our NetworkIP customers who are rebranding & selling our conferencing solution have seen a significant increase in usage too.

In addition to saving companies money & still allowing employees to effectively communicate these innovative telecommunications products are also creating a greener environment for the world. I read an article in the New York Times this morning that said Cisco alone is avoiding $100 million in yearly travel costs & reducing its green house gas emissions by 10% by making use of these types of products. Imagine that, companies can save money by using these telecom products & at the same time they are supporting a greener environment. It’s a win-win solution.