TECH TALK: Alt.Software: The Approach (Part 2)
Latest Technologies: Just because the target market is at the bottom of the pyramid does not mean than the technologies used are outdated. Technologies for Web Services like XML, SOAP, WSDL and UDDI need to be used to ensure compatibility with other components and larger enterprises. The coming mobile Internet also must be kept in mind: SMS, for example, offers an inexpensive form of “always-on” connectivity.
Distribution via Internet: Software is becoming a service. This “disruption” of the software industry business model must be used to one’s advantage in distribution. By enabling access and distribution of software via the Internet, not only does the updation process becomes faster, but it also allows faster access to global markets.
Subscription Business Model: Today, the large upfront costs for software packages works either as an inhibitor of purchase or provides encouragement for piracy. Extending the software-as-service model to offer software-on-subscription allows companies to pay for it like a utility: monthly payments based on usage.
The 10-10-10 Message
The message to the Small and Medium Enterprises (SMEs) needs to be:
- 10 times the software: All the software an SME needs is available, like a thali. Typically, most SMEs tend to use only a few software packages, and this leads to information being scattered and duplicated. By making software at the heart of the enterprise, SMEs will be able to make their businesses much more efficient and their owner-managers more productive.
- 10 times the performance: Since most of the software is run from a server on the LAN, the connectivity issues that have hurt many ASPs do not come in. Reliability is also high, and so is the perceived comfort with all the data being within the office.
- one-10th the cost: Consider Salesforce.com’s offering of its applications at a cost of USD 65 per user per month. To ensure adoption in emerging markets, SMEs need 10 times more applications at one-tenth the cost of what any single application would cost, thus offering a 100x improvement in value.
This, then, is the concept of the SME Tech Utility. Its business model is to become the world’s lowest cost Software Producer for the real-time enterprise, with a focus on SMEs worldwide, starting with emerging markets like India. This is a disruptive notion in the world of software, and one whose time has come.
The Internet is not going away. If anything, it is going to become more embedded as the DNA for businesses. This is a great time to take advantage of the coming future and disrupt the enterprise software market. This is also India’s opportunity to move up the value chain and to create a great global software products company.