Infosys Loaded with its 3.0 Version - Part I

There used to be 'swayamvars' orchestrated by the Kings in India for their daughters to choose the men of their life-and-choice and the men had to coo the bride with their immaculate abilities. Then there are parts of India where still the women-to-be gets literally abducted and forced into the marriage. And till few years ago, i used to hear the Bihar's Shotgun Weddings where the reverse used to happen - yes, the guy being kidnapped by the family for their beloved daughter. None of these happened for N R Narayana Murthy's 30 year old "daughter-like" Infosys.

Swayamvar in current ever-growing modern India sound too much of modernity. The only one i can remember is when first foreign coach of Indian Cricket team was being finalized and Greg Chappel was chosen. The rest is history as we all know. Infosys fared not-so-good in the last two quarters but have never reached to a stage where it can be abducted (read acquired). Its fundamentals are still strong as the pundits say. And doing anything like kidnapping is just out of the world and our thought for an institution of immense ethical standards. Is 'Lure' the apt word to say? Convincing Mr. KV Kamath to bring it back to glory?

Rather , the handover has been a perfect script as of now. A perfect marriage of past with present. Will it survive? Only time will tell. We still need to see how the Tatas fare in their leadership transition. Perhaps they will pick lesson from this rather-so-perfect 'vidaayi'.

Commodity Trap of Indian Telecom

You are due to be charged rental of Rs.30 for CALLERTUNE on 21-Mar-11. RC with 31 to extend validity for 31 days. To deactivate, SMS CAN CT to 144(TollFree). 

The deactivation message to 144 kept on failing and sometime later came this message from Vodafone:

Rs.30 has been deducted towards caller tune rental. 

As per the Indian Government Directive, Airtel was insisting on identification documents which one Mr.Y did submit but Airtel never updated their records. After 2 months , the number was temporarily disconnected without any prior notice. The frustrated users end up tweeting as we see in the image above.

It's no more a secret that the cost of talking in India has been tending to be zero and the Indian Telecom market is becoming more and more competitive with each day. Areas such as customer service seem to be getting left behind in the race to survive and exceed in the highly competitive environment. With MNP (Multiple Number Portability)  across the same circle in full swing now, it is yet to be seen how much of improvements it has brought into telecom service provider offerings. All players , i repeat All of them actually went into a strategy of price war rather than differentiating themselves on their offerings and services. Low price without seamless network connectivity and with service issues will never get a favor from the subscribers.

The service providers have created a sort of commodity trap for themselves. With continued reduction in prices and lowest ARPU(Average Revenue Per User) in India, they just didn't had any bandwidth to invest to the extent required on the service front. Add to it the huge payments they are making for the 3G Licences. So everyone is trying to play volume game and attain a high base of subscriber to make up for the low ARPU but it is at the same time straining their systems and services. Hence those invariable billing and network issues.

Little do they realize that it is just a matter of time when they wont be able to reduce the price further and the customer centric approach will be the winning differentiating factor thereon.

How Al Jazeera makes Money

I would say if you want to understand world politics , you should better watch Al Jazeera English (AJE) version. Etymologically,the two words mean "the island" and surely at some points,it proves to be surrounded with the Muslim world's euphemism of the western power. I have a cable connection full of South Indian channels and not a single international news channel and hence my appetite for international news is forced to find solace with its live stream. For good perhaps. Atleast qualitatively , its on par with any BBC or CNN coverage. 

To be fair, it is equipped with some very brave reporters. During the Gaza war in 2008, it was the only channel with reporters on both sides of the conflict. It was the only international news channel to cover the violent out-lash of government on the protesters in Myanmar with under-covered reporters using the spy cameras. They were the only one to cover the gulf-oil-spills.The ordinary Arabs would have never seen an Israeli official without it. With its Cairo office closed, journalists beaten and arrested , tapes and cameras confiscated , it ensured a live  broadcast from the Tahrir 'Liberation' Square throughout the 18 days of Egyptian protests.

True , it has a past which makes it appear biased against western world (but are the western press neutral? Don't they show the news from American perspectives?) with controversial connections. It is still referred as CNN and BBC of the Arab world. Those in U.S should watch it first before forming a perception from third-party unknowns. Plus , it is owned (and subsidized) by Qatar government which as a nation shares a friendly relation with U.S , is much more liberal compared with other middle-east countries except Dubai and has Exxon Mobile as its largest foreign investor !

Business Model

The value proposition is simple : it broadcasts as-it-is uncensored (that's what makes it credible and trust worthy) news , political talk shows and documentaries about current and controversial happenings with an objective dual-sided view.It was initially funded with a 5-year loan totaling to $150 million from the Emir of Qatar who still continues to subsidize it. Most of the money comes from licencing exclusive footages (not to say , they have many !). It sells documentaries, rents its equipment to other broadcasters. Little dependence on advertisements - the Saudis unhappy with Al Jazeera's coverage of their Kingdom have given implicit message to the businesses in the Arab nations that they will be forbidden from doing business in Saudi Arabia if and when they advertise on Al Jazeera. And hence its drive to expand across the globe trying to catch as many eye-balls as possible and once that's done , it presumes the advertisers will follow on their own. It also has launched its sports channels for which it gets paid subscription revenue. It also have a advertising revenue-sharing agreement with Google for their YouTube Channel (Yes if you are in U.S , in all probability that's what you need to rely on to watch AJE). 

But that's not enough, they still are not making profit , not withstanding the fact that the numerous middle-east crisis they leverage on is a costly coverage. When Vodafone was struggling its way out in Europe and elsewhere , it found solace and made millions in Indian market. AJE already has got the permissions to broadcast herein India. But the news broadcast industry here is highly crowded and hyper-competitive. Plus will AJE's "Journalism with No Frontier" policy work here given the fact that many of the private news channel here are owned by politicians and implicit lobbying on news item is as prevalent as it can be? Will they chase the profits as desperately as the deregulated media houses here are doing ? They were able to unite the Arab world viewers who are even now so fractured politically , socio-economically and historically. Will they be able to repeat the same here? 

The Financial Crisis : Greed Accumulation

Its not a news that Investment Banks created those complex financial products/securities backed by the mortgage based products.They became underwriters and placement agents for these products and gained not only from the success of these securities but also from their failure (making profit from the same products which caused loss for their clients - they reversed their transactions and started selling the same products to their clients which they bought once they saw decline of the mortgage market coming up). What caused this  increasing level of risk appetite and conflict of interest (greed?) in the Wall Street?

Before 1994, U.S banking industry was more of a fragmented , localized and decentralized cluster which prevented an undue collation of financial power and provided adequate risk spread in the financial system. With authorization of inter-state banking in 1994, it became more easier to open bank branches throughout the nation. The repeal of Glass-Steagal Act in 1999 enabling the normal banks , securities firms, investment banks and insurance companies to operate as a single merged entity. And hence the rise of too-big-to-fail financial institutes. 

They started producing new instruments with no prior performance history making it difficult to analyze and predict the associated risk. In 2002, the US treasury reduced the capital reserve requirements for securitized mortgages depending on the credit ratings of the securities which created incentive for the credit rating agencies to portray an optimistic risk assessment of the mortgage pools and hence the created opportunities for banks to reduce their capital asset ratio. Thus , mortgaged backed securities started gaining in demand which promoted more and more lending promoting lenders to issue mortgage to high risk subprime borrowers as well. The higher the loan amount was , the higher was the commission for the mortgage broker, the higher was its initial profit and price in the secondary market for the lender and the higher was the source of revenue stream for the wall street firms.

Since the lenders were able to securitize almost all of their loans, credit ratings took a back seat and the volume and speed of lending plus securitization became the key. As the risk of non-payment was finally being passed to third party, the lenders lost the interest in loan eligibility and determining whether the sold load would ever be repaid. These volume of loans got defaulted and paved the way for tough times.

Let's Get Rid of it

This is the chance to utilize the network effects which we learnt during our MBA classes in the best possible way. If the suppressed souls in an Egypt and a Libya can do it , why can't we in this much lauded democratic nation do?  Tsunami of corruption was always here , lets not further allow it to wash away our well being , lets not allow it further to eat away our growth saga , lets not our future generations suffer from it. Better late than never , this is the time to seal your name in the history books. Lets get rid of this bunch of ants surrounding our hard earned sugar cubes. 

Are you Consumerized?

If you are a recent MBA grad in India , you must be enjoying the current very-soon-to-be-over-post-college-pre-job period? Eagerly waiting for that first day on job?And for that office laptop? What if it turns out to be one black, heavy, bulky and ugly box? Will you still use it? Atleast in Office? (assuming you won't be able to flaunt it the way you used to flaunt your now-soon-to-be-ex (laptop? Ofcourse not? Oh those happy days!)).

Most of the time , you will use your office laptop as your own property (read - for your own personal work/surf/entertainment). In reality , you no more will get just any ugly box; even your employer understands you want it your way. The time has come when you , the end user , can influence the devices/tools/machines to be used and not your company. So if you are comfortable with an OpenOffice , noone will force you to open your docs in MS-Word. Isn't it?

Now what should a Toshiba or a Dell or an HP or an Apple Team should build - That sleek one (Sony Viao even has a size zero one!), the designer colored one , having high-end graphics card for you to play around(games of course) and a webcam to make those necessary skype calls (assumption applied: the now-soon-to-be-ex theory failing) OR/AND those bulky powerful one for enterprise usage(yes they are customized to have higher processing power, speed, memory, configuration and what not). At Dell, the same development team takes care of both small business & consumer. Many vendors are offering enterprise products with look-and-feel of consumer products. The number of SMBs buying PCs from retail or online outlets is increasing with an overall decrease in the purchase from dealer market.

So what's happening?

The line between consumer and enterprise technology/product demand is slowly getting blurred. The new gen Enterprise 2.0 workforce is hard-wired for specific technology/product/features/facility and the companies that overlook it can face a loss of competitive advantage in the labor market. Would you like to work in a company which don't allow the Facebook access to its employees? Social media/Networking  has improved our personal lives, why not use it to improve our corporate lives as well?

The toy is becoming tool? or its the other way around (does your child prefer an internet connection to a licence to an outdoor game?)

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(PS: I still love my college laptop. Not because of the Toshiba label it carries but more because it has all the tools in the world installed , all the bookmarks , those read later, those add-ins which can make me the most successful and most efficient human being on any day at any place.)

5 C's of Community : iStockphoto

Framework Source: The 5th C of Community, Social Commerce by Brian Solis

Recommendations

• Continue with the Micropayment model
• Have variable fees depending on the photo’s popularity
• Extend to other Targeted offering(As they know the users in the communities and their interests) such as digital media , photographic accessories
• Hire similar people passionate about photography and communities.

HubSpot:Inbound Marketing and Web 2.0

This case analysis was done and subsequent slides were prepared as part of E-Business course during our MBA days :) . The issues raised in the case prompted us to go the usual marketing ways of segmentation , targeting and positioning ; little did we realized that with the advent of Web 2.0 and social media , the marketing rules are changing !