Emergic: Rajesh Jain's Blog

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Software Distribution Network

September 11th, 2003 · 1 Comment

I have been thinking about the packaged software market for SMEs in India. (Maybe the same is true for other emerging markets.) The simple reality is that it does not exist. Neither are the buyers used to paying for software, nor are the sellers (in this case, the channel) used to charging for software. There isnt much of a marketplace for software as piracy and non-consumption are the two options available simply copy for a nominal price whatever one can copy (MS Windows, MS Office, accounting software), or dont use anything that isnt available at a very low price point (database, CRM software, mini-ERP).

There is little incentive for software developers to create appropriate software because they know that it is highly likely to be pirated and therefore there isnt much money to me made anyways. As a result, whatever software gets sold isnt cheap, because the seller has to make the assumption that only a small fraction of the eventual users will actually pay. In addition, the SME buyers, while spending the money on hardware, have come to assume that software is free. This forces the channel to provide the software, but not support it because there is no money to be made in the process.

The need is for creating a software distribution network targeted at SMEs. This network should:

  • Make software available at affordable price-points to SMEs
  • Ensure regular updates and licence control so that piracy is difficult and has few benefits
  • Have a national network with local presence in the neighbourhood to ensure appropriate support
  • Work with existing computer distributors and resellers to bundle a base software platform with hardware
  • Provide a managed software infrastructure with auto-updates, and without the need for on-site IT staff
  • Ensure regular end-user training and education seminars on how to effectively use computers
  • Provide a reference enterprise IT architecture for SMEs with a starting point and an upgrade path over time
  • Show how the IT investments can pay back via improved profitability and business growth
  • Create demo points in neighbourhoods so SMEs can see the software
  • Get software developers to build software on the common platform relevant for specialised verticals
  • Generate and publicise case studies from the early adopters

    Nothing like this exists in India. Is there an opportunity to build something like this? Are there parallels we can draw upon from other industries? Can this be a profitable business?

  • Tags: Software

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