Day: March 2, 2001

What are the differentiators and advantages of this (the SME Technology Utility) approach?

1. Target Market is the “Corporate World’s Poor”: This is the counter-intuitive strategy! It is like what CK Prahalad says: can you make money off the world’s poor? This extends it in the business world. Just as there are 4 billion people in markets like China, India, Mexico, Brazil, Eastern Europe and Africa, there are also 25 million SMEs in these markets. They may not be able to pay the hundreds of thousands (or even millions) that the big customers may pay, but they can surely afford USD 100 a month to make their business (and themselves as owner-managers) more efficient. It is also the world’s hardest market, but there is for the first time a distribution medium in the Internet which can reach them.
2. Comprehensiveness Redefined: This provides a complete solution to SMEs – only then the SMEs see efficiency gains. Each of the four verticals complements and adds value to the other making the entire offering. The computing and communications offerings provide the bedrock for making the software suite work. The services supplement the offerings and complete the loop.
3. Software CD/ASP Hybrid: Software is moving towards becoming a service. That to most people means an ASP service. In today’s context where the infrastructure to get connected to the Net is still not perfectly reliable, it is difficult to imagine having mission-critical business software running remotely. What is needed is a solution which is local and also on the Net. That is what the LAN Server provides.
4. Integrated, Internet-centric, Software Suite: The software suite needs to be integrated with all that an SME needs for internal and external interactions – one needs to think of a single, unified enterprise model for the suite. Integration of all functionality is important for the SME to realize significant productivity gains. Today, data sits in specific software packages in silos. All that happens is the automation of a few, specific processes. What is required is for the SME re-architect its business around the Internet.
5. Standardisation: This means that there will be no customisation of the software. It is a one-size-fits-all approach. As a service provider, keeping one instance of the software is perhaps the only way support costs can be cut down dramatically, and ongoing enhancements can be provided easily. From an SME point of view, it means that rather than trying to adapt software to its business, which results in mass customisation, many versions, lots of bugs, and large support costs, it will need to adapt its business processes to the software. The software will not be perfect – it will always be an 80-85% solution, because as the software becomes better, the companies will figure out a way to do their business better. Customers will not be doing development on it, they will be using it. This will make the software and the services predictable, reliable, cheaper, upgradeable and from the service provider’s point of view, scaleable.