January 5th, 2006
Jamcracker unlocks a Web 3.0 role for the channel
Is there a role for traditional systems integrators and other IT solution providers in the delivery of on-demand applications? So far, they haven’t had much of a look-in. In part, that’s because the Web allows providers to bypass the channel and go direct to buyers. But even where providers have tried to work with channel partners, they’ve found it difficult to interest them in a business model that pays on a monthly schedule over the life of the contract rather than a single upfront licence fee.
There’s been another factor too: the IT channel are a conservative bunch.JSDN will help kickstart channel involvement in the on-demand space They won’t go out and sell something until they’re convinced that a market already exists for it. Now that on-demand is firmly on the map, their interest levels are rising. At the same time, there are signs that a role is starting to emerge for them, not least because on-demand vendors have realized that customers in many industries prefer to deal with their existing IT suppliers.
The nature of this emerging role has been articulated recently by Jamcracker, 
a company that’s a veteran of the on-demand space, having launched in February 2000. Jamcracker’s founders, led by Exodus co-founder KB Chandrasekhar (pictured), made an early bet that the on-demand sector would create a big opportunity for channel players. It’s been a long wait, but finally the on-demand sector is getting big enough for their vision to pay off — and in the meantime the company has had ample opportunity to refine its products and expertise.
Its announcement in November of the Jamcracker Services Delivery Network proposes two main functions for the channel. One of them is the traditional role of customizing on-demand solutions to meet the specific needs of their clients. The other role is new, and consists of aggregating bundles of services to create those solutions. The channel partner becomes a services integrator, assembling on-demand services from various sources to build a solution instead of sourcing a selection of products.
Jamcracker believes that the JSDN will help kickstart channel involvement in the on-demand space because it brings together a pre-certified catalog of on-demand applications and hosting providers that channel partners can draw on, relieving them of the burden of researching and testing a range of suitable services for themselves. "Our aim is to alleviate the inhibitors," VP of marketing Brent Arslaner told me.
Naturally it also makes available as part of the mix its own infrastructure software and expertise in building and delivering aggregated services offerings. ISVs must develop an adapter than connects to JSDN, and hosting providers must licence the infrastructure software. Jamcracker is staying flexible about the deals it will strike, however. "Every vertical has different metrics that drive the consumption of these services," Arslaner told me, "so we have to be flexible in how we build their business models."
In the first phase of the project, partners are striking individual relationships with on-demand vendors or hosting providers. The next stage, which is due to happen this year, will be to build out a live network of shared services. At that point, the JSDN will become a living example of the aggregation layer I described in my posting last month about What to expect from Web 3.0, while channel partners will draw on the aggregated services to create and deliver finished applications to end customers.
If the Jamcracker network takes off it will be an interesting demonstration of the market fragmentation I was describing in my post on Wednesday about Who will own Web 3.0? Although Jamcracker is providing elements of the software, it will be the participating providers who collectively ‘own’ the network, in the same way that participating ISPs and enterprises ‘own’ the Internet. I’m sure they will make a decent living from this, but I would suggest that it’s the channel players, assembling the applications for customers and thus owning the customer relationship, who will be in the most lucrative position.
Phil Wainewright is a commentator and strategist on emerging software industry trends. See his full profile and disclosure of his industry affiliations.
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| 01/06/06
