By Sramana Mitra and guest author Shaloo Shalini
SM: My other question was, you mentioned that you have moved your transportation management system to cloud. Would you elaborate on that? Is that industry specific? Is it a niche technology?
PS: This is an interesting case I think in the light of what I have already said. We are a manufacturing and distribution company, so the supply chain is important. I mentioned that we differentiate based on speed to get our product to market. We previously had on-premise enterprise management systems that have not met expectations; they essentially do not provide the capability and functionality that we needed. So, we have actually abandoned the on-premise enterprise system in favor of a SaaS application for transport application management. It’s a niche application and deals specifically in TMS. It’s from a company called MercuryGate, a small start-up company with expertise in this kind of transportation management.
PS: For an affordable fixed price per year, we have unlimited users for our SaaS provider where we do all of our transactions, all of our shipping status, and all of our payments in the cloud. What is really interesting about it is that we were up and running in less than three months. So, the day we sign the contract we are focusing on business process unit, we are not focusing on the infrastructure. We started to immediately accrue benefits.
SM: Very interesting. What is your approach to working with small startups? It sounds like you have had success with MercuryGate. Are there other business functions within your organizations that lend themselves to getting a SaaS provider in? If so, where are those requirements, and what kinds of functions are they?
PS: I believe that when you talk about the infrastructure fabric, [it doesn’t matter] whether it’s Verizon, Google, or Rackspace; I don’t care. That is infrastructure. There is a dial tone, and I have the assumption that the cloud computing providers will deliver. What is more important to me is what is the value proposition is for service entity, and on top of that, MercuryGate’s importance to me is based on their expertise in their business process and their software. They may in fact rely on a tier 1 service provider in the cloud. I don’t want to care about tier 1 infrastructure. It’s really about the business function business process expertise in your domain rather than in the infrastructure space.
SM: Where did you find that that kind of domain expertise? Where did you find MercuryGate, or how did they find you?
PS: I think it was through a variety of sources. Once we know we wanted to go with a SaaS provider, we looked at industry trade shows and on the Internet through dialogues with colleagues. There is a relatively finite set of companies within each specialization, so it was not difficult for us to find them.
SM: So, you found them?
SM: Very good. So, you are very open to startups as long as they have deep domain expertise in the domain that you trying to virtualize or put on the cloud?
PS: That’s correct. I will give you an example – Birst is a startup that is nearly three years old. The founder of the company ran mySiebel. Birst does business intelligence (BI) in cloud. They have a small number of customers, but again they have a nominal fee. For a fixed amount per year, you get a powerful BI environment at your disposal. If it doesn’t work, I don’t renew it. If it works I would gladly and happily repay the subscription. It is a wonderful model for the SME sector, which does not have the risk tolerance or expertise to manage these applications on its own.
SM: This is all good to know, because a lot of what we are doing as part of the 1 Million by 1 Million, initiative through which we hope to help 1 million entrepreneurs to reach 1 million in revenue, we work with a lot of entrepreneurs. This series is particularly focused on extracting entrepreneurship opportunity in entrepreneurship models from thought leaders and customers such as your, so what you are telling me here is an interesting cue for our entrepreneurs – if they can develop deep domain expertise in a functional area or a vertical, and they make it easy with a fixed-price unlimited use model to enable clients to try the product for year, then you and some of your early adopter compatriots perhaps are wiling to give them a chance and bring their technology into use for critical functions.
PS: Exactly right. It’s not about the technology at all. It’s about business processes and business models. If you focus on infrastructure, that is the beauty of cloud computing – it is by definition a commodity; therefore, you can move down the stack in terms what you worry about. You can now focus on what really is important for the business.