Stanford Computer Industry Project

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The Stanford Computer Industry Project (SCIP) is an interdisciplinary research program dedicated to exploring the business, political, and technological dynamics of the worldwide computer and information technology industries. Launched in 1991 with a grant from the Alfred P. Sloan Foundation, research from the Project has already established Stanford as a center of knowledge about this important industrial sector.

Research is conducted by a core of faculty, research associates, and graduate students from across the university, including the Graduate School of Business, the departments of Computer Science, Industrial Engineering, and Political Science, the Center for Economic Policy Research, and the Institute for International Studies.

Results of the Stanford Computer Industry Project include articles for technical and academic journals, working papers, case studies for graduate courses, and a major international database, "Excellence in Electronics." Research findings contribute to courses in the Graduate School of Business, the School of Engineering, and the Department of Computer Science. Members of the Project serve as advisors to government agencies and firms around the globe. In addition, the Project hosts weekly seminars and an Annual Forum in September to enable industry leaders both to contribute to on-going research and to benefit from Project findings on national policy initiatives and successful business strategies.

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1998 Review

Over the past seven years, SCIP has evolved from a "startup" project to a mature research organization that has become a thought leader for a number of important issues facing the computer industry. This 1997-1998 academic year has been an especially pivotal period in the maturation process. During this year, we have:

  • added key core researchers, enhanced our outreach capabilities, increased the number of corporate sponsors, and entered into a number of new collaborative research projects with outside groups;
  • added 5 new corporate partners, bringing the total to 20;
  • moved the curricula of several Stanford schools and departments towards a deeper understanding of the significance of information technology to their fields; and
  • contributed to important public policy debates in the areas of antitrust, Internet regulation, IT labor, immigration and education, global technology trade, and national IT policy, both here and in other countries in Asia and Europe.

Our public policy advisory role has expanded even further this year, as we put to use the perspective and expertise we’ve developed from six years of observation and investigation. We have become a knowledge resource for the academic, government, and business communities, as well as a objective source for the press. (See inthenews.html) In essence, we have become what we set out to be, a "center of excellence" for research on the computer industry.

Our research portfolio has changed this year. Some of the research that was begun under our generous grant from the Sloan Foundation was finished coincident with the completion of a Ph.D. degree or a collaborative project deadline. Other long-standing lines of research have reshaped themselves over time, and continue to yield interesting results. Several new initiatives are in the offing too. For these we will pursue funding from a variety of foundation and business sources, including additional corporate sponsors. When we look at these old and new initiatives in the aggregate, and our growing list of corporate partners, we see that SCIP has the momentum to continue its productive work beyond the original Sloan grant period.

We look forward to the continued interest and support of our current corporate partners beyond their initial commitment periods. Moreover, we welcome a variety of participation models. For example some corporate sponsors have expressed an interest in more in-depth research on a particular topic of mutual interest. In 1997, several SCIP faculty and doctoral students undertook a major collaborative research project, the Global Electronics Study, with our sponsor Andersen Consulting. The research was successfully concluded with the publication of a major Andersen report, "Explaining Uncertainty: High Performers Change the Dynamics of Competition." That collaboration provided the inspiration to undertake or propose several more joint research projects with current or prospective corporate sponsors. Some of these proposals are discussed in more detail below.

Established activities. The SCIP weekly seminar series, an on-going event for the past five years, has become well-known to Silicon Valley as an important forum for dialog about long-term trends and issues in the computer industry. Not only do faculty and student researchers have the opportunity to present their latest work, but the series also attracts outside lecturers who can make a strong contribution to the discussions of various industry-related issues. Adding another dimension to our interactions with corporate partners, some of these outside guest lecturers have also been senior executives from our sponsors, such as Toshiba and Philips.

In 1996 SCIP instituted a week-long executive education program called Strategic Uses of Information Technology (SUIT). This program attracted senior executives from all over the world and received high-marks for professionalism and relevance to the real-world needs of its business participants. Last year the program became a permanent course in the Executive Education curriculum of the Graduate School of Business. Moreover, SCIP has been invited to present all or parts of this program abroad. One program has already been presented in Japan, and two others are planned for Mexico and Malaysia. SUIT ‘98, presented in May, was well-received. In 1999 Haim Mendelson will join William Miller as co-director of SUIT. They intend to bring in additional faculty instructors and to expand the SUIT program to twice a year.

Major publications. Kathleen Eisenhardt’s new book has now been published. Harvard featured the book, Competing on the Edge: Strategy as Structured Chaos, in its Spring 1998 bulletin of teaching materials. An article from the book will appear in the Harvard Business Review.

Ward Hanson’s new book is in final editing for publication, and will appear in 1998. His book, Principles of Internet Marketing, will be the first textbook ever published on the subject of Internet marketing.

The SCIP web site () offers a complete bibliography of all SCIP researchers’ publications. Some of these papers are available for downloading, while others may be obtained by contacting the Project Administrator, Ronda Burginger, at 650-725-7096 or

New projects. Francois Bar’s Intranet and Organizational Communications research roundtable now has 19 corporate participants. Each company has provided an extensive body of data relating to its intranet usage for analysis. In addition, company representatives are committed to meeting every 6 weeks to examine and debate data analyses, and put forth issues for discussion. A formal survey of participants’ practices is also scheduled for this year. This research undertaking is still in an early exploratory stage and will most likely continue well beyond 1998.

John Richards, who joined SCIP in July 1998 from the Sloan industry research project at the University of California at San Diego, will be starting the International Computer Services initiative funded by the Sloan Foundation. His political science background will offer a fresh perspective on the regulatory and business-cultural issues that effect the course of development of the IT services industry in the US, Europe and South America.

Ward Hanson, Tim Bresnahan, and James Lattin have proposed a substantial three-year research initiative. This joint research project will focus on understanding effective Internet marketing strategies. We expect this work to begin in the fall of 1998. The project will accommodate several Ph.D. and masters level students as well as staff researchers and additional faculty from other departments.

William Miller, Director of SCIP, and Avron Barr and Shirley Tessler, the Co-Directors of the Software Study, have developed a research proposal to study the rise of entrepreneurism in the global software industry. They observe that, in the US, certain kinds of innovations involve high-risk investments that must come from the entrepreneurial sector. There is now some evidence that a number of other countries are serious about creating similar business environments, in hopes of becoming international competitors in the software industry. The initial focus of the study will be on Pacific Rim countries. The project team hopes to find several funding sources in Japan, Korea, and the US for this multi-year, multi-disciplinary examination of an important emerging phenomenon.

Barr and Tessler’s work on the software talent shortage continues through their contributions to the public policy debate (on immigration and education), and in their work with individual companies about the implications of the shortage on personnel policies and business strategy. They have also proposed a new initiative focused on the future of corporate software development and procurement — Software in the Enterprise, 2010. During the next decade, a constellation of changes in personnel, technology, and departmental mission will dramatically transform the Information Systems function.

Unifying themes. The rapid pace of technological and market change is a key theme for both sellers and users of technology. It drives changes in organizational structures, allowing the more nimble firms to leverage pace for strategic advantage. In Haim Mendelson’s work, we see that "Information Age" companies possess a set of attributes that allow them to succeed in a dynamically-changing environment better than their peers. This manifold collection of desirable attributes include decentralization, clarity of goals, flexibility, and effective alignment of information with decision-making.

Kathy Eisenhardt has also explored how successful high-tech firms have implemented Information Age principles in their approaches to management of product development to permit informed decision-making about market and product choices; manage multiple alliances; create effective product development teams and facilitate their transition from one project to the next; and most importantly, enable speedy market introductions. She has also examined some of the less effective practices that rapid change promotes, such as those in "dumb fast" firms that respond to the rapid pace of change, but sacrifice decision-making quality to speed.

By definition, Information Age companies know how to use information technology to better advantage. Francois Bar’s work on corporate intranets looks at the real intranet usage of 19 firms from a variety of industries. He is analyzing these data in the context of both the company’s stated goals and the actual impact of these intranets to date on the organizations. Preliminary findings show that these companies have so far tended to use these newly-introduced intranet technologies to automate existing processes. A few organizations, however, have also succeeded in facilitating broader process improvements.

Tim Bresnahan and Garth Saloner examined this same phenomenon from the point of view of the "co-invention bottleneck." Their work illuminated the mismatch between the pace that technology vendors produced new enabling tools and technologies, and the slower pace of technology adoption. The underlying reason for the slower adoption rate was that many companies cannot make innovative use of these technologies; that is, they cannot "co-invent," as quickly as these technologies become available. Part of the mismatch comes from the complexity of the required co-invention, and another part from a reasonable hesitation to commit substantial resources to a new technology in an environment of rapid change and uncertainly.

Another reason for the co-invention bottleneck may come from an inadequate supply of technical talent in user organizations. Avron Barr & Shirley Tessler have been examining this issue, in particular, the migration of high-end technical talent out of the user MIS organizations to software product and services firms. As the need for more rapid and complex co-invention has grown, and the level of expertise within MIS has declined, the practice of outsourcing commercialization activities to software consulting and services companies has risen dramatically. These services firms can offer user organizations more expertise and more experience with co-invention; however, they also introduce uncertainty as they continue to experiment with a variety of new business models.

Among the emerging models that SCIP’s Software research group has examined is shared risk and reward arrangements in which services firms accept lower fees during the development of a new systems-based business activity in exchange for a share of the profits. This innovative partnership approach to new systems development illustrates a point brought out by Professor Bresnahan in his analysis of innovation in the computer industry: vendors cannot rely solely on technology innovation to maintain a successful market position; rather, demand and commercialization by user firms and their outsourcing partners, is an essential element of competitive advantage. In this context, software services firms play a key role in facilitating and speeding-up the pace of co-invention.

Closing remarks. Out of the many possibilities for approaching the study of an industry, SCIP’s decentralized and diversified (multi-disciplinary) research strategy reflected the industry environment it set out to study. This fortuitous choice has yielded substantial benefits. As several SCIP researchers have pointed out about the computer industry itself, in rapidly changing environments, no one group can accurately predict the future of its technologies, markets or business models. The only successful path, at both the firm and industry level, is to explore a variety of different approaches.

Similarly, SCIP’s approach to examining a diverse set of issues from a half-dozen different academic perspectives allowed us to discover and articulate a set of essential themes that has converged over time. As a group we have been able to put forth a richer, more-nuanced understanding of the computer industry. Moreover, the diversity in our research approach has enhanced our capability to involve more students from more disciplines, and to reach more constituencies in academia, business and government. Finally, SCIP’s approach has led to several very successful cross-discipline collaborations, as researchers discover more thematic ties in their work. New initiatives will continue to be developed across old boundaries, as interesting questions emerge in our rapidly-changing industry.

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of Research

The diversified research approach that the SCIP has adopted over the past six years has allowed the natural emergence of several cross-cutting themes. We now have findings from interviews, case studies, and survey data which confirm the importance of these research themes. SCIP research teams from different disciplines continue to investigate them in complementary ways.

Areas of research include:

  • Network platforms, internets and intranets which are driving the cutting edge of the field for both hardware and software companies

  • Implications to companies, industries, and individuals of the rise of the network as a dominant platform

  • Global perspective on the software industry: software products, services, corporate information systems and software embedded in other products

  • Reasons for US dominance of the worldwide software products industry

  • Identification of issues that will shape the future of the software industry: labor, antitrust, intellectual property, quality, etc.

  • Survey of software product management practices among software publishers

  • Networked multimedia: the market and technology drivers of broadband deployment to the home, and the challenges for established providers

  • Management of rapid change through the effective use of IT

  • Information Age Organizations and how they can compete successfully in a highly dynamic industry

  • In-depth analysis of different industry segments within the Information Appliance Industry

  • Networked inter-organizational computing for electronic commerce

  • Organization and management of large-scale multinational corporations

    During the course of our research, we have found our work converging strongly on three key themes: the new network platform, software development issues, and managing rapid change through the effective use of IT. We believe that they are central to the future evolution of the computer industry.

    As we continue our study of the rapidly changing computer industry, we find that our understanding of the issues and our dissemination of research findings are also moving at an accelerated pace. In the past two years, we have discovered that our World Wide Web site has become a particularly effective mode of communication for both dissemination and feedback.

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  • Faculty and
    Affiliated Researchers

    Project Directors

    William F. Miller, Director
    (Directions to the office of Professor Miller)

    Nancy J. Nelson, Director, Corporate and Foundation Relations


    François Bar
    Assistant Professor of Communication, Department of Communications
    William Barnett
    Assistant Professor of Strategic Management, Graduate School of Business
    Timothy Bresnahan
    Professor of Economics; Graduate School of Business, Center for Economic Policy Research
    Erik Brynjolfsson
    Visiting Associate Professor of Operations, Information, and Technology
    Kathleen Eisenhardt
    Professor of Industrial Engineering, School of Engineering
    Edward Feigenbaum,
    Professor of Computer Science, Computer Science Department, School of Engineering
    Ward Hanson
    Lecturer in Marketing, Graduate School of Business
    Hau Lee
    Professor of Industrial Engineering, School of Engineering
    Haim Mendelson
    Professor of Information Systems, Graduate School of Business
    William F. Miller
    Professor of Public & Private Management, Graduate School of Business; Professor of Computer Science, School of Engineering
    Garth Saloner
    Professor of Economics & Strategic Management, Graduate School of Business
    Gio Wiederhold
    Professor of Computer Science, School of Engineering

    Research Staff

    Avron Barr, Co-Director, Software Research team
    John Richards, Director, International Computer Services Research
    Shirley Tessler, Co-Director, Software Research team

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    Contact: Nancy J. Nelson, Director, Corporate and Foundation Relations