Group C 10

Nipak Das (201/46)

Sanglap Banerjee (270/46)
Mihir Rathod (248/46)
Santosh Kumar (274/46)
JAMCRACKER

1. What are the critical challenges for the business model to be

sustainable?

Before the business model of Jamcracker could be established, it had to tackle a series of critical
challenges. Foremost amongst them was the issue of timing, the risk Jamcracker might be delivering
a new model of service before the world was ready for it. The model proposed was entirely a new
market mechanism for distributing IT Services and in order to succeed, the emerging markets
warranted sufficient infrastructure, economically viable industry relationships and strong growth
prospects which were all the more strained and complicated after the dot-com crash. Apart from
timing issues the model faced severe technical roadblocks as well such as lack of established
standards in the relatively young in ASP industry which led to integration issues with Jamcracker
platform.
Apart from the above mention entry level problems, issues such as need for professional services
and customer service were the dominant concerns which called for attention before the business
model could be sustained. As the industry developed more and more people were getting involved.
This called for services such as initial system configuration and integration which would be followed
up by customer concerns regarding service level quality, privacy and security.
Thus these were the critical challenges faced by the business model before it could be sustained

2. How does Jamcracker fit in the ASP (SaaS) space?

Jamcracker analogous to its name, tried to avoid IT log jams using web-based technology, for its
clients and empower them to smoothly move towards their business objectives.
Its business model was based on the widely anticipated growth of Application Service Providers,
more popularly known as ASPs. ASPs provide various benefits to an organization such as speedy
implementation of IT infrastructure, cost reduction, IT skilled workforce, 24x7 support etc. But
given that these ASPs solved small IT problems for clients, Chandra along with Chen and Terbeek
envisioned a unique space for Jamcracker in the ASP space.
Although, its model was based on ASP but Jamcracker was not an ASP itself. It cooperated with
ASP partners to combine application services through its enterprise IT platform, Jamcracker
Enterprise, into comprehensive offerings.

3. How would you explain the business model of Jamcracker?

As said above Jamcracker assumed the role of an ASP cafeteria wherein it partnered various
specialized ASPs and using its enterprise IT platform, Jamcracker Enterprise provided
comprehensive solutions to the IT problems of its clients. In simple terms, it aggregated the benefits
of various ASPs and provided as one solution to the client. Since, Jamcracker presented these
solutions to firms as “IT Department in a box”, the client had to just maintain a single contractual
relationship with Jamcracker rather than numerous relationships with specialized ASPs. So, a single
interface with Jamcracker platform would suffice.

Jamcracker’s clients paid a per-user per-month fee for accessing Jamcracker’s service infrastructure
and an additional per-user per-month fee for each application service that they chose to use. Also, a
modest set up fee would be charged initially. Jamcracker did not have to make large capital
investments in developing and operating applications as it used the application services of its ASP
partners. Although costs involved in engineering, service, sales and delivery were higher but
economies were favorable. Also, adequate volumes allowed for generous margins as the incremental
cost in serving a client was way less than doing the same for a new client.