The factors that drive the ASPs emergence are )Increasing cost of specialized software that have far exceeded the price range of small-medium businesses. 2)Usual urgency of a company to set up a IT capability internally – which is similar to the infrastructure already used/developed by many companies 3)Less investment for the base functionalities (which are provided by ASP) of an IT firm 4)Companies’ urge to support their services 24*7 unlike the traditional business operations 5)Optimizing the number of IT staff inside the organization so that some of the required functionalities could be cosourced or outsourced to an ASP 6)Companies’ move towards mobile workforce
Q2) How does Jamcracker fit in the ASP space? Explain the Jamcracker business model. Jamcracker’s business model was based on the ASP concept. But it wasn’t exactly the ASP. Rather, Jamcracker cooperated with ASP partners to combine application services through its enterprise IT management platform – “Jamcracker Enterprise”- into comprehensive offerings, including technical support and billing. For example, an ASP that provided an email application and another that provided desktop productivity application could, via Jamcracker technology, appear to the customer as an integrated service package.
Customers could pick and choose from an “a la carte” menu of the applications in the virtual “ASP cafeteria”. Jam cracker would then provide those application services in a “IT department in a box”. This implies that the customer would maintain a single contractual relationship with the Jamcracker rather than numerous relationships with specialized ASPs. Users would login to the Jamcracker platform once rather than separately onto each of the ASP platform.
Jamcracker’s Business Model The above explained “ASP Aggregation” methodology accomplished by Jamcracker solved problems inherent in the traditional ASP approach such as high customer acquisition cost, conflict between breadth of ASP offerings and scale economies and Data sharing. Revenues -The monthly fees that the customers paid for using Jamcracker’s Enterprise -A modest setup fee -Per-user-per-month fee for access to Jamcracker service infrastructure Reason: Network Effect
Customers get the suppliers and the suppliers in turn get the customers – which could get a better deal for the customers from the suppliers and a lower cost of distribution for the suppliers – and end as a virtuous cycle for all the involved parties. Mainly Targeted Areas before targeting the huge clients such as “fortune 500” -The midsized “unfortunate 5000” companies since they cant afford huge IT investments and hence would go f$or ASPs -simple applications such as email, expense reporting etc web-native applications Q3) Identify critical challenges that Jamcracker must address to create a credible and sustainable business model. The following challenges must be addressed by Jamcracker to sustain in their business model. -Reselling and branding issues should be considered in a case-by-case manner and not as a whole -Educating its customers in the details of the new ASP ntegrator approach to reduce their IT investments -Making the existing ASP integrator infrastructure more robust as the business grew rapidly -Need for professional services that would help and support its customers to convert their legacy data to ASP based system which would easily confide their trust in ASPs and in Jamcracker through which the customers would avail the ASP integrator services from Jamcracker over the long run. -Addressing the customer’s concerns over the ASP model’s service levels, data security and privacy so that the customers would feel secured with the ASP technology.