1. What are the income and expenditure components of the business model? Do you think they have got a viable business idea?
The income and expenditure components of the Jam cracker model are as following,
I.) Income components:
1. Jamcracker receives revenue in the form of modest initial set up fee.
2. Monthly usage charges for access to the Jamcracker service infrastructure.
3. Additional monthly charge for each application charge they add to their package of services.
II.) Expenditure components:
1. Modest investment in hardware required for ASP partners authentication and sophisticated billing system.
2. Customer acquisition cost that helps building industry relationship.
3. Salaries of Employees to help improve and maintain technologically established standards of the processes.
4. Salaries of professional services support/consulting partners required for helping customers with set up and migrating from legacy systems to ASP based system.
5. Investment in service delivery and service assurance processes
In our opinion, this business idea is viable for Jamcracker since it has been successful enough to acquire a good amount of ASP partners through direct sales channel and strategic partnering with Accenture which will help it leverage economies of scale. This lets it attract customers who are looking for diverse set of software bundle. Many companies prefer outsourcing application services that saves a huge cost in terms of development and maintenance activities. This also leaves them a scope to provide better services by improving on the integration aspects with various outsourcing vendors that have already partnered with various companies. In order to sustain its viability Jamcracker should invest in infrastructure and building industry relationships.