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TECH TALK: When Things Go Wrong: The New Business

April 21st, 2005 · No Comments

The ASP (application service provider) business in Netcore will be the focus of almost all the new development. The focus here is to automate businesses through software provided on the Internet. What we did for NRIs with India-centric content a decade ago, we have to do for SMEs in emerging markets with software in the coming years.

Earlier, the emphasis was on building the LAN-Grid first and the basic computing applications on the LAN (via Emergic Freedom). This was a mistake. Instead of looking at devices and applications that companies are already likely to have, we will focus initially on services that they are not likely to be using initially and which can be delivered from the Internet to a PC with a browser and a mobile phone. This is dependent on bandwidth being available, which I think is a reasonable assumption as we look to the future.

The focus going ahead will be focus on building Internet-based software engines powering business growth for SMEs. These services will be offered as Emergic.net on an ASP (Application Service Provider) basis, also called SaaS (software-as-a-service). The focus will be on small- and medium-sized enterprises in emerging markets, starting with India. All of these services will be integrated with the mobile phone. In fact, access of information on mobile phones will be one of the key enablers for centralising data and applications. We have to make mobile phones equal partners (to computers) in business processes.

We leapfrogged the wireline revolution in India and went wireless — India now has more mobile phones than land lines. In computing, we are hoping that users leapfrog the individual PC-centric model and go directly to the thin client-mobile phone model. In software, thanks to open-source and broadband, we will leapfrog the packaged software era and go straight to the software-as-a-service (SaaS) era. ASPs will come back – in the world’s emerging markets, delivering apps and data to thin clients and mobiles. ASPs (and SaaS) are the only way to combat both piracy and non-consumption.

What the likes of Google and Yahoo did for consumers and companies like Saleforce.com and NetSuite are doing for SMEs in the developed markets, a new generation of companies have to do for SMEs in the emerging markets. They are the engines of growth for these economies. Software will power these companies. Thus far, because they couldn’t afford software, piracy or non-consumption was the only option. Both are bad options. Now, there will be an alternative — thanks to open-source and broadband (the same telecom technologies that got built out in the last 10 years). Software engines built on open-source and delivered via the Internet in an increasingly broadband-enabled world will make SMEs more competitive in the global marketplace.

Anand Jain had written in a comment: I thought corporations (both mid/mega sized) would be lining up en masse to have their infrastructure implemented the open source way. Isnt it the promise of the open source to make the building blocks available for cheap/free? I am not sure about your business model, but seems that companies are happy to pay to the borg in Redmond, rather than go the open source way. Or is it competition in the OSS space?

Open-source will in fact be a key to building out the ASP model. It is just that companies still find piracy an easier option. OpenOffice is still not as good as MS-Office. So, starting with the desktop applications was a mistake in retrospect. Now, we will start with the thin clients (which are being built by Novatium, a company I have co-founded with Prof. Ashok Jhunjhunwala and Ray Stata, and the services, which we will focus on in Netcore.

As we take the solutions to market, I will be paying close attention to what Yesh Sriram suggested: The deal out here is really simple. Cover the market. Give what customer wants. Usually simple stuff. Watch your expense/sales.

Keeping control on costs is another suggestion made by Krishna Iyer. If numbers dont match, take hard decisions and stem the weed. Stop what you are working on currently completely AND re-analyse the market, see what the need is of the hour. Recheck core competencies and see if you can cater to the current need. Even Amazon was running in red for many years before investors shook them up like crazy. Your biz books should never be lost sight of in pursuit of enterprise goals.. its like stock market. we have dont have endless pockets lined with money so we have to stop loss sometimes but continue playing the investment game.

It is always a tricky game. What is the right level of investment that is needed for the business? When does one pull the plug on a failed project? These are decisions entrepreneurs have to make all the time. In my case, I do know that the next year will call for investments in building out these software engines but if we do not see early traction, we will have to think hard about future investments. In that case, it is back to the drawing board!

Tomorrow: Looking Ahead

TECH TALK When Things Go Wrong+T

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