Utilization And Valuation of Open User Communities in High Technology Companies
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The context of this study is the AVRfreaks community and Atmel Corporation and we explain how to utilize a community and create a model for calculating the value of a community through two research questions: The practical problem: How to utilize a community? The theoretical problem: How to value a community? High-technology products are debated, criticized and publicly supported by highly skilled, experienced and educated engineers in Internet forums. The engineers form communities with similar interests and compete in having the highest amount of posts and likes from their peers as their only compensation. Meanwhile, in the boardroom, executives ask themselves how they can utilize communities and struggle to understand the return of investment in a community. This study examines existing theories and literature in network theory and community valuation to show how to utilize a community. This study presents a clarification of the community typology in the Introduction and the approach in the study is a generic model for valuation, applied to the functional areas of support and R&D at Atmel. The empirical studies correlate the data from AVRfreaks with Atmels internal data to calibrate the model and provide a valuation of the community. The result of the study finds an annual valuation of AVRfreaks to Atmel to be multi-million dollars in the form of reduced customer support-cost and wider market reach. We find that the application of the model in other industries beyond microcontrollers is possible but further research is required with more calibration to avoid sacrificing precision in the valuation.