Jamcracker

1
Jamcracker

• Sundar Kumarasamy
• Glenn Lawrence
• David Tigay
• August 1, 2005

2
Agenda

• Exodus
• What is an ASP?
• Benefits of using ASP
• Evolution of JamCracker
• Architecture
• Technology Partners
• JamCrackers Business Model

3
Exodus

• Founded in 1995 by K.B. Chandrasekhar
• (Chandra)
• Pioneer of Internet Data Center Market
• Web hosting service provider for eBay,
• Lycos, MSNBC and Yahoo
• 13 Internet Data Centers (IDC) in USA and
• Europe
• Also offers network design and
• development

4
What is an ASP?

• Owns and Operates Software Applications
• Owns, operates and maintains the hardware
• Employs people to maintain the applications
• Makes the application available everywhere via
  the Internet
• Provides the service for a fee

5
Benefits of Using ASP

• Speedy Implementation
• Cost Reduction
• Favorable Cash Flow
• Support for 24/7 Operation
• No shortage of skilled workers
• Support for a mobile Work Force

6
Evolution of JamCracker

• In July 1999 Chandra, Herlad Chen and Mark
  Terbeek founded VitalTone
• November 1999 - 42M in financing
• Februaty 2000 renamed as JamCracker and started
  selling 4 services
• June 2000 10 customers 140 employees
• Nasdaq descent of 2000 .com bust
• additional 73M in investment capital
• 38M in equipment financing
• June 2001 100 customers 250 employees 35
  applications services
• Established ASP Aggregator

7
Architecture

• Single Sign-On
• On Demand Delivery
• Access Policies
• Web Services Standard
• Integration with customers existing
  infrastructure
• Pivot Path
• - User Management
• - Service Management

8
Technology Partners

• Leading Hardware Manufacturers
• Software Vendors

9
Fiefdom's of Data
Accounting
Manufacturing
Sales and Marketing
HR
10
Contiguous Corporations
Accounting
Manufacturing
Exodus
Sales and Marketing
HR
11
Seamless Data Common Systems
Accounting
Manufacturing
Sales and Marketing
HR
12
Own or Use?
Cutover
Benefits begin to trend up
Time
Purchase
Costs Stabilize at Maintenance Level

• Purchase and Installation
• Buy Software
• Hire Consultants
• Install and Test

13
Own or Use?
Immediate Benefits (Infrastructure already in
place)
Subscribe
Time
Subscription Fees
Start up fee
14
Business Concept
Provide Web based technology to keep business
moving forward on their business objectives
without IT logjams Service delivery in the IT
industry would migrate towards ASPs Specialty
Applications Lower Cost Structure
Accounting, Payroll, E-mail, Treasury
workstations, HR data files, Billing, Expense
Reimbursement, Supply management, Accounts
Payable Speedy implementation, Cost
reduction, Favorable cash flow, 24 X 7 support,
Skilled IT labor, Supports mobile
workforce Provide value to ASPs to become
willing partners Provide value to customers
through delivering an IT department in a box
15
Business Model
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Linking Strategy to Value
Concept Describes the opportunity
Revenue Model
1
Cost model
2
Value Measures the return to investors and
other stakeholders
Capabilities Define resources needed To turn
concept Into reality
Asset Model
3
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Business Model

• Revenue Model
• Monthly fees for using the management platform
• Monthly fees for using the various applications
• Set up fees
• Consulting fees
• Track usage information that could be sold to
  customers, ASPs and others
• Costs Model
• Let ASPs invest in the costs of development
  operation of applications
• Large costs for engineering integration services,
  sales force, service delivery
• customer support
• Moderate costs for hardware to authenticate
  users
• Moderate costs for tracking users access and
  integrated billing
• Economies of Scale (Large costs recovery)
• Nature of Internet (thousands of applications)
• Repeat Customers (trusted source customer
  growth)
• Network effect
• Asset Model
• Best IT staff
• Engineering expertise in integration services

18
Strategic Decisions
Jamcracker started off with simple services like
email and expense reporting
Selling efforts were concentrated on mid-size
companies that did not have large resources for
IT departments, but were big enough to generate
sufficient revenue
19
Expansion Decisions
Jamcracker resold service to large cap
companies through larger companies like
Accenture
Jamcracker added more complex services as they
gained expertise
Jamcracker services were sold to smaller
companies through other ASPs like telephone
companies, cable companies and Internet
Service Providers.
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Competition
Hosting Companies
Other ASPs and ISPs
System Integrators
Jamcracker was not an ASP, so it did not compete
with ASPs. As an ASP aggregator it had early
competition in limited categories, but no large
competition. Potential competition could develop
in the future by other types of IT companies
expanding into the market.
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Sustainable Competitive Advantage
Talent
Patience
Flawless Execution
Leader, First Mover Advantage
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Sustainable Growth Model
1995
1999
2000
2001
Founded Exodus
Founded VitalTone
Renamed into JamCracker
More than 100 Customers, 250 Employees
Extend
BEGIN new line of business or create
new business models
ADD functionality and features or improve
performance
Enhance
ADD new products and services or
ENTER new markets
Expand
LEAVE business or market or drop offering
Exit
23
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