The business model and revenue model for cloud based services is completely different from an outsourcing business. It is highly unlikely that India based IT service giants will be able to make this kind of transition. Even if they can successfully pull this off, the revenues from cloud services will not be incremental. The $s will moving in from their own traditional services.
Cloud based services need heavy upfront investment on infrastructure and intellectual property. There will not be any cashflow for a while - at least for few years. Any revenues are unpredictable since it is meter (pay-per-use) based with no long-term contracts. These basic factors will put significant pressure on the profit margins and their operational budgets.
Are the Indian based IT firms and their management ready to take on this challenge ? This transition should happen quickly. Their competitors are innovative, agile and well funded start-ups in western countries.
Filed under india cloud service provider
Why there is a healthy relationship between democracy and sustainable prosperity.
- Stability: Foundation of democracy is freedom for the citizen. Freedom gives citizens to express their opinions and objections. These encourages lot more transparency and an opportunity for contrarian views. Those forces help resetting any serious flaws in the system before they get out of control and turns out be a total disaster. Eventually democratic countries will never have to face any citizen uprise and the country never forced into any kind of revolts those turn into revolutions. Stable society is essential to achieve consistent level of prosperity.
- Property rights and ownership: Democratic systems can only support principles of property rights, meaning citizens can claim ownership and hence individually one can accumulate their assets. Ownership has a magical power - it gives any normal person a sense of achievement and higher level of motivation in life & work. Property rights encourage investments and hence job creation. An ability to create new jobs is the primary indicator of a prosperous country.
- Slow but steady: Democratic based systems tend to move slow and resist any sudden change. Sometimes during any crisis most of us tend to feel that slowness is a big hindrance for our progress. But it is essential for testing the implications of a proposed change by giving it some time to work it’s way through the system. Slow transition gives us an opportunity to make needed adjustments and reset our expectations. End result is stability.
Filed under democracy prosperity
As an software engineer and founder/CTO of a technology start-up (WizioTec Corp.), I got quite interested to explore Microsoft’s BizSpark program. This is a special program offered for a start-up. After reviews the plan, I was not convinced to give their tools & software a serious consideration. I feel Microsoft seem to have not found a way out of their traditional software distribution model. This approach works for a vendor that is dominant and controlling the market, eventually forcing the purchase decision. Apple is an example of such companies.
Following are some of the reasons why I think BizSpark does not work for a typical start-up, while considering other free and open source options.
- Free development tools will not just cut it, who will build the software. Today the labor is lot more expensive compared to the cost of tools.
- There are not many high caliber engineers available in the market to develop the software utilizing Microsoft tools, especially to build a complex and innovative solution. Even if you find such talent, most start-ups can’t afford to hire them.
- Offshore development based on Microsoft tools will be quite expensive and risky. Also I am thinking the terms of BizSpark program does not support any kinds of outsourcing to offshore engineers. Most importantly it will be a nightmare to find qualified offshore Microsoft developers.
- Majority of start-ups engineering workforce consist of fresh graduates and engineers with few years of experience. In this talent segment, top level of expertise around Microsoft tools is rare to find, when compared with other open source tools and software.
- I don’t really understand the reasons for Microsoft allowing only start-ups with less than 3 yrs old. This criteria will block out serious start-ups. They are generally the ones who may be willing to evaluate new Microsoft tools.
- The infrastructure to support Microsoft runtime is lot more expensive and require high level of expertise to configure and manage servers. Cloud service providers for Microsoft platform are still immature and these services may be costly, especially considering an open source stack such as LAMP.
Filed under microsoft start-up BizSpark
There has been many start-ups those who developed wrappers to twitter platform. Every time I come across such start-up, my concerns always been
- What kind of business did they create for themselves. The reason for high valuations in market place for a technology startup is -the intellectual property, low start-up costs [labor is the most expensive part] and high margins, when they can generate revenues. Twitter dependent start-ups landed up spending lot of time and created not much for themselves. In contrast, they worked for free to help twitter in testing-out their platform and expand their reach to new users. An example of this - 2 years later Magpie, advertising on Twitter is put up for sale.
- What happens when twitter themselves move into the niche this start-up created. It is easy for twitter to monitor and evaluate niche areas, since every of twitter applications use their APIs. Once twitter decide to move in, it is very easy for them - either can be build something in-house [now they know what works and what does not work] or buy a start-up at cost price. For example twitter moved into mobile client market with least resistance and minimal efforts.
- Why do investors back such start-ups. These are purely speculative investors. They are gambling on the hope that twitter may buy their start-up one day. If such exit happen, since twitter is only one buyer and there will be too many competing start-ups for sale - investors should feel lucky if they can break even on their investment.
I see the same issue in the commercial software side. For example salesforce.com is heavily promoting their platform & APIs to 3rd party application developers. I do see some advantages for a start-up in this case. They may be able to initially ride on salesforce’s buzz. If they can execute their strategy and target a niche market, a start-up may be able to develop a revenue generating business. But most of the revenues will come from services - customized solutions for individual client -this is not a pure product play. By the way, start-ups have to acquire their clients and salesforce.com as a company will not be of much help.
Filed under twitter salesforce.com start-up
This video simplifies the understanding on how RIM encrypt/decrypt messages using its infrastructure - Video On NDTV
Following are my thoughts why RIM is having these issues
- Their messaging route is a mix of public (internet) and private (company’s intranet) computer networks and a mix of mobile and land based networks. Each segment is managed by independent vendors, there are many points of failures and depends completely on the reliability of these foreign operators. RIM has lot of over-head to make all this work and must be passing on the cost to their customers.
- Air waves used for mobile transmission falls into the control of individual governments. Anyone involved in the transmission of data/voice over mobile networks are forced to follow the rules of that country. It western countries are lot more liberal, does not mean every country must fall inline. In fact citizens living in the western countries must question their own govt’s liberal policies.
- Mobile phones are the primary mode of communication used by terrorists and govt must need a way to monitor such malicious activities on the mobile networks. To do that the data on the mobile careers must be readable for govt surveillance. BlackBerry users constitute very small portion of the cell phone users and those can’t be excepted from this. This totally undermine the govt monitoring.
My curiosity was ’Why RIM is fighting this hard with foreign govts, even going to the extend of shutdown their support in those countries ?’
If RIM allows decrypted messages through their transmission route, then their expensive infrastructure make no sense for their clients. They will be better off using any smart phone which supports access to the internet. This move will killing RIMs niche business which they are selling to corporation under the pretext of being highly secure.
Filed under BlackBerry Technology business model
I like to refer this concept more in line with ‘Citizen eCommerce’ or ‘Inbound eCommerce’.
This team at Grommet picks one product a day and presents them well. These are interesting facts and useful details about the product which a buyer would like to know before they make a purchase. In this way the buyer is much more informed and comfortable in making a purchase decisions either online or offline.
This approach that leads to an eCommerce transaction is a much better way to buy, as compared with traditional visit to a local retail store - where I constantly sold to by a sales person.
Filed under eCommerce
Slide’s recent exit (bought by Google) has few lessons for start-ups
- Don’t start a company with a sole intension of being sold. Focus on building something which can be self-sufficient in a reasonable amount of time. This will provide lot more options for share holders (investors, employees & founders) to make an happy exit.
- Don’t build revenue models depend on online ads. This market is dominated by few large players and only exit is to get bought-out by one of them. Chances of becoming the next facebook is next to impossible. Even facebook will have lot of issues generating revenues based on online ads and scale-up their operations.
- Plan B & C is a good idea while a start-up refines the business model. In this process if you have crossed Plan F, that is a good sign of a failing venture.
- Those days are mostly gone when start-ups with no real revenue models were bought out by large players. Revenue traction is the good validation for any business model to do a large acquisition. It has not been a major criteria past few years for VCs investing during pre-revenue stage. But things have changed with there as well.
Filed under start-up revenue model
‘I am a geek. I am always been a geek’ - Helen Greiner is the co-founder of iRobot. She holds a B.S. in Mechanical Engineering and an M.S. in Computer Science both from MIT.
There are very few women contributing (compared to women in our workforce) to technology entrepreneurial echo system. I started to think, Why ?
1. Women is generally risk avert. Risk taking is #1 character of being a successful entrepreneur.
2. Women generally not interested in financial aspects of running a business.
3. Business generally is not #1 priority for women entrepreneur, hence investors tend to think twice before investing.
4. In early days of any new venture, an entrepreneur is the master sales person. Women tend to shy away from getting involved in sales process. They are more inclined towards engineering, operations or management - those are later stage activities.
Filed under iRobot entrepreneurship
It is a simple and fantastic concept. I would like to call it as ‘network education’ system.
In the process of sharing the expensive education with under-privileged kids, those kids who are teaching are learning a very valuable and practical lessons - leadership, mentorship, effective communication with masses, self-confidence and most importantly.. a good-heart. These can’t be easily taught in a school setting.
Filed under india network education
This is a simply case of the human not having the basic morality.
Morality is very essential character for someone with management and leadership responsibilities. This is not the first case, in which management level individual at large corporation has disgraced their company and employees. No standard background check will provide insight into someone’s morality.
This incident started me to think
- How can HR acquire the morality score for an individual, before making an offer ?
- How can a company manage the risk of an employee who demonstrates low morality at work ?
- How to define and measure the morality ?
- What % of current workforce pass morality tests ?
- How to track an employee’s morality and predict the brewing trouble before it turns ugly ?
Filed under morality management leadership
