| Comments |
| 'Industrialization of software and consolidation of demand shall drive "On-demand" services' | ||||
| - Srihari Boregowda, Director & CTO, Canarys Automations Limited | ||||
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"On-demand" means that supplier provides product/service continuously (perhaps, 24 x7 at the consumer's end). Here, there may not be an explicit demand requiring transaction involving consumer and supplier for each fulfillment. The payment is based on metering at the consumer premises as per the unit consumed. This is due to "commoditization" of the demand wherein benefits of economies of scale are passed on to the consumer. Thus, we can see many products/ services that had explicit demand-supply cycle got converted to "On-demand" model, which we see in utility services like water supply (on tap), electricity (on plug) and telephone, etc. Further, in the last few years, we have seen TV channels, Internet broadband connections going "on-demand". Next to go would be enterprise software. Indian scenario Growth of on-demand software market in India and factors responsible for the same It was the crucial decision of the P V Narasimha Rao government in 1992 that broke the shackles and ushered a free market economy in India. Subsequently, India adopted the change at a crucial stage of globalization and knowledge-based economy. This resulted in the growth of wealth in India and propelled the development of a vibrant market segment called "small and medium businesses" (SMB). The technology adoption has been "innovative" compared to the west. Software intensive systems shall usher sustainable competitive advantage in future. However, adoption of "enterprise software" (e.g., CRM, ERP, SCM) into SMB is still a distant goal, the primary reason being the prohibitive cost of maintenance and change of software in tune with business demand. Going forward, industrialization of software and consolidation of demand shall drive "On-demand" software ushering next-generation wealth creators through the SMB segment. Even in the US, the SMB market is growing around 17 percent, accounting to 60 percent of overall innovation. Systematic software reuse as an engineering discipline will hold the key. Here is a list of business and technology drivers that can lead to the SMB growth:
While these are drivers that need to be seen, the inhibitors for "on-demand" software, I am pessimistic at this juncture that whether we get past the "tipping point". · Trust in the network /service provider of software - this is something that cannot be achieved just by market campaign but has to be painfully built from grass root level · IP through innovation will mostly rest in the enterprise system as software asset. This may be the core that the enterprise would like to have control on. Market segments that SMB can innovate through software - · Healthcare: In my experience, almost every culture "healthcare" is being viewed as broken, nothing specific to a country. Today, healthcare is the most complex domain involving an array of stakeholders, for eg., government, NGOs, insurance, corporate hospitals, families to individuals, etc. It will also produce data complexities, as data is voluminous and disparate. Software-intensive systems can help preventive medical errors, post clinical care via self-service portals. Technology adoption is a must to link up various functions like clinical, administrative, and financial apart from providing access to specialists through telemedicine. SMB has a great role to play where even healthcare is being outsourced. · Hospitality: This includes travel and leisure. This is an untapped market potential and SMB can play a great role in demand aggregation (for e.g., the per capita air miles in Malaysia exceeds several times that of India). Also, this requires the knowledge and culture of local community. SMB can play the role of last mile fulfillment and be responsible for overall customer experience that is rich and diverse. · BFSI: Finance domain is one of the earliest to enjoy fruits of automation. Further, banking and insurance would be productised into dozens of variants and offered at "micro" units. The SMB shall lead the supporting services to unleash the growth. |
Demand and supply are the two known factors that drive economy. For businesses supplying product or service, "demand" is a complex function that forms the core of any business.