Background Note | HBS Case Collection | December 2000

Networked Utility Providers

by Thomas R. Eisenmann and Alastair Brown


Defines and describes ways to categorize networked utilities, software "applets" such as RealNetwork's RealPlayer, Macromedia's Shockwave, and AOL's ICQ that are downloaded via the Internet. Networked utilities extend basic Web browser capability to allow users to complete specialized tasks, such as accessing "rich" media files (audio, video, animations) or chatting in real time with other users. Discusses the economic model for networked utility providers, focusing on their revenue and cost drivers. Examines some of the challenges they encounter in establishing a technical standard, and describes tactics that they can employ to improve their odds of success. Building on that analysis, the final section examines the payoff to networked utility providers from aggressive growth strategies.

Keywords: Business Model; Software; Web Services Industry;


Eisenmann, Thomas R., and Alastair Brown. "Networked Utility Providers." Harvard Business School Background Note 801-309, December 2000.