Case Analysis: Jamcracker

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Case Analysis: Jamcracker What do you think about the viability of the Jamcracker business model? The viability of Jamcracker business model can be evaluated based on the practical viability (whether the model is implementable) and economic viability of the model. Practical Viability: For implementation of the model, a substantial amount of infrastructure (hardware and software) was required. However, the investment for the required infrastructure was relatively modest as compared to the large capital investments required to develop and operate application services. Another important requirement for the implementation of the model was industry relationships. The company focused on mid-sized companies, which could not afford huge investments in IT, to build relationships. Also, a strategic partnership with Accenture was formed, so as to seem appealing to the larger companies. Since the model does not involve huge investments and relies on customer relationships, it can be implemented successfully. Thus, the model qualifies as practically viable. Economic Viability: To make the creation of infrastructure and industry relationships economically viable, it was necessary that the costs incurred were recoverable, and the industry showed growth prospects. The costs incurred by Jamcracker were of the following nature: a) Investment in hardware required to authenticate users to ASP partners, and to track information necessary for integrated billing. b) Costs involved in engineering, sales, service delivery and support. The primary sources of revenue for Jamcracker can be divided into three components: a) Setup Fee b) Jamcracker Service Infrastructure/Platform Usage Fee (Charged on a per-user-per-month basis) c) Application Service Usage Fee (Charged on a per-user-per-month basis) If adequate volume could be achieved, the cost reduction was

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