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    Business Computing: JULY 17, 2001 Section C - Group 5

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    ABHIGYAN MISHRA

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    Business Computing: JULY 17, 2001 Section C - Group 5

    Uploaded by

    ABHIGYAN MISHRA
    8 views4 pages

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    C-5 (1)

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    8 views4 pages

    Business Computing: JULY 17, 2001 Section C - Group 5

    Uploaded by

    ABHIGYAN MISHRA

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 4

    BUSINESS COMPUTING

    Case Study 2: Jamcracker

    JULY 17, 2001


    SECTION C - GROUP 5
    Sumedha Gupta IPM01064
    Ananya Bk IPM01080
    Hitesh Chhatani PGP13106
    K Shanmugam PGP13110
    Kshitij Amit Shah PGP13123
    Lalduhsaka Chawngthu PGP13126
    Naincy Pahariya PGP13146
    Question 1)
    What is an "Application Service Provider"? What factors drive their emergence?

    Answer 1)
    An application service provider is an enterprise that delivers application functionality and its
    associated services across the network through the internet to multiple customers in a rental
    pricing model.

    Factors that drive their emergence:

    • Speedy implementation: The time required to set up services via ASP is much shorter
    than that required to set up the IT services internally.

    • Cost reduction: As ASP was able to provide the services to multiple customers, it could
    realise the economies of scale in their service delivery.

    • Favourable cash flow profile: Services acquired the ASP model, and required little fees
    with additional payments due after service delivery called a subscription-based model.

    • Support for 24x7 Business Operation: Web-based business model expected to operate
    around the clock. Whenever customers face issues, experts are likely to be available
    99.999% to resolve the issues.

    • Help in dealing with the shortage of skilled IT staff: ASP is the web-based model and
    they are having pools of IT experts to provide services and resolve the issues of their
    customers.

    • Support for the mobile workforce: To get the services through the ASP, location does
    not matter as it operates through the internet and web.

    Question 2)
    How does Jamcracker fit in the ASP space? How would you explain the Jamcracker
    business model in 30-seconds or less?

    Answer 2)
    Jamcracker's business model was based on the idea to provide the services of the application
    functionality through the web-based model. However, it is not the ASP itself, but it worked
    with the ASP partners to combine the application services through its IT management platform
    enterprise. A customer could pick the application from the menu of the virtual “ASP cafeteria”.
    The customer would maintain a single contractual relationship with Jamcracker. Jamcracker
    would guarantee services and provide a single point of contact for technical support.

    Jamcracker`s Approach:

    • High Customer Acquisition Cost: By providing an indirect sales channel for ASPs,
    Jamcracker can reduce the customer acquisition cost and focus more on the operation.
    • Conflict between the breath of ASP offering and scale economies: By aggregating the
    application of many ASPs into a package, Jamcracker integrates with other ASPs
    applications to solve a larger outsourcing problem for customers.

    • Data Sharing: Jamcracker facilitated to transfer the data from one ASP to another ASP
    irrespective of their different locations to avoid reluctant data entry.

    Question 3)
    Identify two or three critical challenges that Jamcracker must address to create a credible
    and sustainable business model. What must they prove? Will they succeed?

    Answer 3)
    What are the challenges:

    • Timing: It was the early 2000s, and the markets had just witnessed the dot com crash.
    The industry of Application Service Providers (ASP) was very new and was considered
    emerging. The dot com crash had led to many investors changing their outlook towards
    tech companies, and although many investors remained optimistic about the future of
    ASP, their customers were facing the aftermath of the dot com crisis and that became a
    concern for the industry. As said ASP was an emerging industry, but Jamcracker wasn't
    into the industry of ASP, they were ASP aggregator, and rationally it was considered at
    a more nascent stage than the ASP industry. There was a confusion to go after
    customers or ASPs, because neither would come if they didn't have the other one.

    • Technical challenges: Jamcracker, being an ASP aggregator, had to undertake the task
    of integrating the different ASPs onto their platform. The industry didn't have any
    standards yet, so each ASP was very unique and to integrate onto their platform took a
    lot of time since they couldn't create Standard Operating Procedures, due to the unique
    nature of the ASPs. This became very inefficient and led to an increase in the cost of
    onboarding ASPs.

    • Customer perception: The industry was new and the customers had a lot of concerns
    and uncertainty about the service levels, security and privacy. The customers were
    entrusting their data, which might be sensitive in some cases, with Jamcracker or other
    such service providers. Any crisis which might occur may shake the whole industry,
    which hasn't established itself. Any shortfall may lead to them losing out on many
    prospective customers.

    What must they prove?


    Their business model is highly dependent on multiple players in the industry, and the company
    must pay a lot of attention is building and sustaining these relationships because as a product
    Jamcracker is a collection of multiple different ASPs and it is also depending on Accenture to
    cater to the top players in the industry. Their service model, which includes setting up the initial
    system, involves professional services for data transfer. They have multiple parties that they
    depend on. They must prove that they can move forward by keeping these relationships intact
    and can create a sustainable ecosystem in the ASP space.
    Will they succeed?
    Jamcracker has the first mover advantage in the ASP aggregator space, and is under the
    leadership of an industry expert. The investors have optimistic outlook for them even after the
    dotcom crash, and are even ready to provide additional capital as and when they require. They
    have made multiple relationships in the industry and are focused on what they need to do.
    Considering that no big player has taken the on ground initiatives to enter the space and the
    projections for the industry are good, Jamcracker can establish itself as a powerhouse in the
    space.

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