Amazon Weds Facebook and you get that feeling of “Finally!!!” when you see a two obviously compatible people hanging out at the same pub but not hooking up for some unknown reason for ages. Ever since websites started showing us what our Facebook friends liked (sometimes in irritatingly irrelevant contexts), I was just waiting for Amazon to do the same. After all, wasn’t it most obvious that the company which tapped into community intelligence before the whole social media hoopla kicked in (“Users who liked this also liked that…”) should be the one cashing in on a user’s actual network to mine similarities and give gift suggestions?
The integration does solve for some basic social shopping scenarios at the moment. Gift recommendations and gifting alerts are probably the most basic way in which Amazon can use the Facebook network data. But the real value of this alliance can come through only if Amazon successfully understands relationships on Facebook based on common activity, location, likes and dislikes. If most of the people in my network listen to Coldplay, the chances are fairly good that I like the band too. However, if Amazon can really get to a point where it can segregate common interest friends from work/school connections and both the above from random friend requests one may have accepted, the product recommendations can get very relevant. The amount of positive recent activity with another friend should also be a good indicator of how much I would value that person’s interests as well as how likely I would be to buy something for them. What is good is that unlike a lot of other Facebook integrations, Amazon is not publishing data back to Facebook. Given the recent spate of controversies around Facebook’s privacy stance, this will definitely help spur the uptake of this opt-in feature. Great partnership that was waiting to happen! I hope this really works out well for the good of all of us who love shopping online.
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My earlier article on Saas applications was largely about Saas applications that focus on productivity. The benefit of those apps is to allow users to ‘outsource’ their IT needs using a hosted service, thereby resulting in a lower TCO. While Saas and hosted applications did set out to primarily create that benefit for users, it is unfortunate that most people who think of Saas limit the definition to just that.
In today’s world where the ‘community’ aspect of the internet is over-emphasized to a fault, it is only logical for productivity apps to incorporate that aspect. Business, after all, is about interactions with your network and productivity, largely depends on how best one can source and manage these interactions whether these interactions are with consumers, buyers, suppliers or with internal employees for a firm. Saas allows such interactions within the context of an application much better than desktop software ever could, owing to its very nature as a hosted service. There are two models in which the productivity and community aspects of Saas can be deployed: 1. Productivity apps on a Social Networking platform This is the more obvious (and widespread) model. A social network with an engaged user base is a great hook for developers to create apps. Most general-purpose social networks primarily serve as a place for entertainment and casual connections but there still are a few apps that solve use cases like: · CRM on a social network: Enables small businesses to engage with their clients and keep a tab of the latest updates at their client’s end with relevant analytics · Partner management apps: These work more on niche social networks that are targeted towards business networking. E.g. YouCanDo.Biz is one of the best examples of business apps enhancing the value of a social network 2. Productivity apps with social features: · Several CRM apps, in particular, plug into your existing social networks to update customer information on the app based on his live feeds. Hence, if your customer is also a friend on Facebook, all details relevant to him will be analysed and extracted from his feed and added to the app · Several HR management apps, especially those into recruitment management, are closely integrated with LinkedIn to manage a constant inflow of leads based on the HR exec’s requirements One would expect marketplace apps like Alibaba and Indiamart to go several steps beyond the basic client discovery nad lead generation service that they provide to include online client management apps. While sites like YouCanDo.biz are attempting something similar, Alibaba, with its already mammoth user base would be the ideal platform to deliver this and potentially open itself to new business models by bringing the entire transation and client management process online. Zoho is clearly a leader in the social Saas space but its customer base is largely non-Indian. The only Indian website providing a productivity app to businesses over a network (at least, the only on that comes to mind) is probably Burrp Small Business Solutions which helps small businesses connect with their customers, get interesting analytics around what customers are saying and run marketing campaigns among target customers. As more businesses come online, this will be an interesting space to look out for. Saas is widely touted as the one big driving force that will expand the market for business software by satisfying the latent demand among SMBs at rates that they can afford. The promise, though, hasn’t been fulfilled yet, especially in emerging markets. Saas adoption is still largely driven by large enterprises which are essentially simply diverting budgets from legacy systems to Saas.
For Saas to really find adoption among SMBs, it is important that one understands the nuances of this segment. I believe that SMBs, like enterprises, have vertical-specific needs and creating vertical-specific Saas products is critical to managing data and processes. Saas essentially brings in two advantages: 1. Productivity: Saas is a hosted model seeking to replace legacy data and process management software and I believe that the evolution and adoption of Saas among SMBs should logically follow a path similar to the one followed by legacy systems in large enterprises. 2. Productivity + Network: While the hosted model helps reduce TCO, it would be a terrible waste of the potential of the internet if Saas products didn’t simulate business relationships online. In Part 1 of this analysis, I will largely be focusing on the Productivity aspect alone and will discuss the network aspect in a follow-up blog post. Information Technology, in the pre-networking and communication days, evolved out of the need for better data management. The basic use cases that any information system seeks to solve are the following: 1. Data Storage 2. Data Search and Retrieval 3. Data Mining and Analysis From the early days of IT, the industries consuming maximum IT infrastructure have been industries which had to deal with large volumes of data and large churn in these data volumes. I believe that SMBs which so far could not afford legacy solutions would need Saas to solve similar needs that were and still are solved by legacy IT at large enterprises. 1. Banking and Consumer Financial Services: a. Rationale: Banking continues to be the largest consumer of IT. Not only do banks manage huge amounts of data, they also experience high churn in data in the form of daily transactions. Data storage is critical but so is retrieval. Also, financial services firms (even the smaller ones) are usually run by well-educated managers who are more likely to understand the importance of Saas. b. Risk: The challenge is that most banks require the data that they manage to be stored within their environment and may not be very open to Saas. c. Recommendation: Saas could be an important model for non-banking service providers which could include brokerages, MFIs and other smaller players in less regulated FI verticals. 2. Healthcare: a. Rationale: Healthcare again has great need for data storage as there is a lot of churn in terms of patients moving in and out. More importantly, since patients are fairly loyal, data retrieval and management needs are also high. Also, healthcare is a recession-proof business which augurs well for anyone providing Saas services to this vertical. Healthcare has a long tail of clinics and nursing homes which cannot afford sophisticated IT making Saas an ideal model for serving them. Add to that the fact that compared to other SMB owners, doctors are much better educated. b. Recommendation: Hospital management is fast becoming popular among smaller nursing homes and Saas is a great model for the same. Patient data management for smaller clinics and hospital resources management for larger nursing homes could be interesting spaces to watch. 3. Education a. Rationale: Education is a recession-proof business and the number of small educational institutions has been on the rise. Process management is important in education institutions but the Saas applications that might have most potential could be in the area of e-learning for education systems to use the internet as a disctrbution channel. Any Saas apps that help them create education modules fast and disburse it over the net may have good potential. This is especially true while targeting the long tail of individual tutors who might want to look at the internet as an alternate revenue stream. b. Risk: Not a deal-breaker but data management problems are not quite as complicated as in BFSI or healthcare owing to lesser churn. Hence, Saas need for internal processes may not be too high. c. Recommendation: Saas models that help create e-learning modules could find high adoption. 4. Retail: a. Rationale: Sheer numbers should be enough to make IT vendors run to this vertical. Retailers have huge data churn managing sales and inventory. It is important to understand the use cases that can be solved by Saas and those that can’t. E.g. POS terminals are fairly inexpensive as desktop products and need to have continuous uptime which is why Saas might not be a great model there. Hence, it is important to identify the right pain points for retailers that can be served by Saas. b. Risk: Sadly, retail is a largely unorganized industry and it can be very difficult reaching the long tail. Labor is cheap and any Saas model that simply seeks to replace labor without adding intelligence won’t do very well in emerging markets. Most importantly, retailers are largely mom and pop stores and the level of IT awareness is very low compared to the other verticals. c. Recommendation: Given that broadband doesn’t exist among the long tail, mobile could be the model of delivery | AuthorA curious cat, online at odd hours, trying to figure out why some companies don't suck and how to be one of them! ArchivesOctober 2010 CategoriesAll |
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