1. How would you explain the business model of Jamcracker in the SaaS space?

Jamcracker was an integrator of Application Service Providers (ASP), based on the anticipation
of a high migration of companies to ASPs.
ASPs have a variety of benefits over the conventional in-house IT setup:
They are implemented very fast as setup time is very less when compared to setting up
of an entire IT department in the company.
The cost is greatly reduced because the ASPs are able to achieve economies of scale.
IT departments require large capital expenditure, but this can be avoided by the
operational expenditure profile of the ASPs rent.
The business operation has 24X7 support available.
Since the people dont need to be hired for running an entire department, the lack of
skilled labour in the IT sector can be compensated for.

Jamcracker provided a la carte offerings of various ASPs where the customer could pick and
choose the exact applications required by the particular organisation. Jamcracker provided
technical support and billing. This aggregation approach solved several problems that ASPs
faced.
The high customer acquisition cost was a major problem faced by ASPs that were using
direct selling as their model for sales, could be reduced as the customers were acquired
by Jamcracker.
Economies of scale could be achieved in a better way as very few companies would
buy just an email software and the business model Jamcrakcer has to offer allows the
company to choose exactly what it wants and allows the ASPs to specialize in exactly
what they like.
Data sharing also became easier as each of the individual ASPs would not otherwise be
able to share data, but could now do so due to the Jamcracker interface in the middle.
The clients found it more convenient as all their solutions were available in one place
and they had to login, look for help etc. from one place alone.

Jamcrackers initial focus was on medium sized companies, where revenue sizes would not be
an issue but the impact of the ASPs offered would be high enough. Initially beginning with
basic applications like email and expense reporting, Jamcracker moved on to more complex
applications like CRM and ERP. Jamcracker had a partnership with Accenture as well. This
gave them access to larger companies as Accenture would further resell Jamcracker to their
clients for a commission.
2. What do you think are the strengths, weaknesses, opportunities and threats of the
Jamcracker model?

STRENGTHS
Mr. K.B. Chandrashekhar, the founder of Jamcracker, had also founded another
successful startup in Exodus Communications. This credibility allowed Jamcracker to
attract a lot of good employees and clients.
Jamcrackers USP included a lot of economic benefits to its clients, including lowering
IT costs, providing centralized technical support and billing.
The company has a novel business idea in aggregating various comprehensive software
applications into an integrated offering - a first-mover advantage.
Jamcracker has a relatively low customer acquisition cost versus typical ASPs.
WEAKNESSES
Being a small company, Jamcracker faces challenges such as difficulty in selling new
concepts. Marketing is thus a bottleneck for Jamcracker.
If Jamcracker decides to partner with companies such as Accenture, it may have to give
up its brand when certain clients demand that their brand name be put on such services.
Thus branding is an issue here.
The dot-com bubble has limited innovation in the IT sector, thereby limiting the
acceptance of innovative companies like Jamcracker.
OPPURTUNITIES
Jamcracker can increase its profit from repeat purchases - customers who would buy
just a few applications initially, would gradually grow and expand and increase their
demand later on.
Another potential revenue source for Jamcracker is from the information it owns about
usage patterns of different customers. Such data can be sold for market analysis
purposes to various ASPs and software companies.
There is also an incentive for Jamcracker to expand both its supplier and customer base
- the more customers Jamcracker acquires, the better suppliers it can attract, which in
turn will attract more customers.
THREATS
Many large software vendors (like Microsoft, IBM, SAP (MySAP)) have indicated that
they plan to provide their own software using the SaaS model.
Another threat is from outsourcing giants like EDS, Infosys, and Accenture, who can
easily offer a rival product given the right market conditions.
The company is in a volatile sector of the economy - demand for IT related products is
low and stock prices are collapsing after the dot-com bubble burst.

3. What would be your suggestions to Chandra for future growth of the company?

With more and more complex applications being added to the portfolio of applications,
customers need people who can assist them in setting up initial system configurations and
transferring data from legacy systems to ASP based systems. Jamcracker can fill this gap by
providing these facilities and providing a more comprehensive package to its customers,
eliminating the hassle for the customers to hire professional services and faster deployment of
the ASP services.
Also the company should target both the Fortune 500 and small firms and startups through
different channels. It can partner with the likes of Accenture to distribute to the Fortune 500 as
a component of their outsourcing programs. It could partner with VAR such as ISPs, telephone
companies etc. to reach out to smaller players in the market who cannot afford the huge IT
infrastructure costs but would like to have these software services from established and
experienced players.