1. What market gap Jamcracker model is trying to address?
Jamcracker model was trying to fill up the market gap of a one-stop service provider by forming a grid of application services hosted originally through its partner ASPs. It allowed companies to rent a bundle of software services such as email, accounting, word processing etc which were aggregated by Jamcracker delivery model. Thus they addressed the following gaps:
Fast implementation of IT capability by extending multiple application services via its grid of multiple ASP partners. Providing IT support of services through its model and minimizing the need of skilled IT staff as small and medium sized ...view middle of the document...
Indirect sales channel for ASPs leading to reduction in customer acquisition costs and enabling the ASPs to work on their core competencies.
2. How viable is the business model?
Jamcracker’s business model is viable because it addressed the market needs effectively and also catered it efficiently. Its business concept is based on the anticipated migration of service delivery in the IT industry toward “Application Service Provider”. The following factors play a crucial role in making this business model to be efficient and viable: Cost factor – The investment cost was modest only in hardware to authenticate users for ASP partners. The larger capital investments which consists developing and operating applications were handled by ASP partners.
Revenue factor – Jamcracker’s revenue source was the monthly fees that customers paid which was quite modest. Customers paid setup fee, a per-user per-month fee for access to the services. Because of modest fee, customers are attractive towards the Jamcracker services. Also repeat buyers contributed largely due to low cost for repeat customers. Needs – Jamcracker’s model addressed the unmet needs of their clients to the large extent and provided economic and operational benefits to customers. It was also beneficial to ASP partners in terms of reduced customer acquisition cost, facilitating efficient data sharing and conflicts between scale of economies and breadth of ASP service offerings. Services – Jamcracker addressed the customer concerns by providing the best of services and maintained the clients by providing the best of supplies. They made sure that the retention rate of customer is as much as possible.
3. What are the critical challenges for the business model to be...