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Before the business model of Jamcracker could be established, it had to tackle a series of critical
challenges. Foremost amongst them was the issue of timing, the risk Jamcracker might be delivering
a new model of service before the world was ready for it. The model proposed was entirely a new
market mechanism for distributing IT Services and in order to succeed, the emerging markets
warranted sufficient infrastructure, economically viable industry relationships and strong growth
prospects which were all the more strained and complicated after the dot-com crash. Apart from
timing issues the model faced severe technical roadblocks as well such as lack of established
standards in the relatively young in ASP industry which led to integration issues with Jamcracker
platform.
Apart from the above mention entry level problems, issues such as need for professional services
and customer service were the dominant concerns which called for attention before the business
model could be sustained. As the industry developed more and more people were getting involved.
This called for services such as initial system configuration and integration which would be followed
up by customer concerns regarding service level quality, privacy and security.
Thus these were the critical challenges faced by the business model before it could be sustained
Jamcracker’s clients paid a per-user per-month fee for accessing Jamcracker’s service infrastructure
and an additional per-user per-month fee for each application service that they chose to use. Also, a
modest set up fee would be charged initially. Jamcracker did not have to make large capital
investments in developing and operating applications as it used the application services of its ASP
partners. Although costs involved in engineering, service, sales and delivery were higher but
economies were favorable. Also, adequate volumes allowed for generous margins as the incremental
cost in serving a client was way less than doing the same for a new client.