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A Business Lesson from Zavvi

Online retailer Zavvi has warned customers to whom it accidentally sent a video games console that they could face legal action if they have not arranged the machines’ return.

Whether or not a customer has the legal right to keep goods, or indeed must return them, they will feel that the responsibility for the inconvenience caused sits squarely with the business who wrongly delivered them

Formula One: On the right track

So the Indian SC has granted F1 a green signal. Talking about green, how ‘green’ is F1 really?

The pressure on the modern world to address the issues of climate change is growing exponentially and Formula One is not exempted from this. For the last 15 years, environment has been the third Olympic pillar, apart from sports and culture. The concept of sustainable development reconciles socio-economic development, while protecting the natural environment on a long-term basis. In the recent years, this model has not only been embraced by the Governments, but has also by businesses. When applied to sport, sustainability seeks a multi-dimensional approach. Sports – related infrastructure can be built with an environment conscious approach. The Vancouver Olympics were termed as the greenest games ever. Of course, UNEP and the Vancouver organizers worked for three continuous years to improve the environmental footprint of the 2010 Winter Olympics. The steps taken in building each venue were rather innovative – landscape irrigation was taken care of using rain water harvesting. Nearly two-third the Olympic Village in Vancouver received heating from waste heat recovery systems. In fact, heat was captured from used bath water. Use of mass transit and bicycles was encouraged.

On the list of the most environmentally harmful sports, racing stands second only to Skydiving. The reasons are pretty self-explanatory. For decades, Formula One has been associated with huge levels of power, high levels of noise and fears of equally high levels of pollution, mostly associated with a perceived need to give the sport’s fans a deafening experience of glorious, loud and penetrative engine performance. The greenhouse gas contribution is insignificant, but that is not the point here. The sport associates with automobile, fuel manufactures on one hand and with a massive number of worldwide youth fans on the other. They have no choice, but to appeal to the environment conscious young generation. After all, ‘green is cool.’

In the recent times, Formula One has been making progressive changes towards improving sustainability of the sport. The turbo-charged engines which will be incorporated in 2014 will be a lot more efficient, i.e., they will run on much lesser fuel that ever before. Now that solves 2 major issues here:

1.)    Fuel economy

2.)    Green house effects

It would be interesting if the Formula One employs radical thinking to the whole deal of engine redesign and gives cutting edge fuel reproduction a thought too. A particular objective should be to ensure that new developments are only undertaken if they will eventually benefit road vehicles. The sport can also help in other ways, especially with the launch of new energy-efficient technologies next season. Although the current steps are small, Formula One is at least on the right track.

Fighting Fit: an overview of the market for healthcare technology solutions in India

Healthcare has always been a sensitive area, with ideas of inclusive growth, better patient care, expensive diagnostic equipment and wider delivery mechanisms taking precedence over investment in technology. But today’s hospitals are slowly realizing that IT can be a powerful enabler of all this and more. Read on to find out how the healthcare space in India is inoculating itself for the future.

Healthcare in India: of woes and cures

The Indian healthcare market is growing. It is expected to be worth around $ 40 billion by 2012 (Source: PwC), with nearly 50% of the market being accounted for by the hospital segment.

Dr. Ashish Dhawad, Founder-CEO of Medsynaptic Pvt. Ltd. reveals: “The fact remains that there is a huge gap between the existing healthcare delivery system and the actual requirement of the population for such services.” This demand for healthcare services should itself lead to sustained and rapid growth over the next decade, with most of this growth expected to come from the private sector.  A number of Indian corporate players, such as the Ambanis, the Hindujas, the Reddys and the Sahara Group are investing in this space and setting up new hospitals with top-end facilities.

A study of the healthcare space in the country today, with respect to private sector hospitals shows that

  • around 2-3% of hospitals have more than 200 beds
  • around 6-7% have 100-200 beds
  • and a good 80% of the hospitals are very small, with less than 30 beds

Mid-tier hospitals, that is, those with less than 200 beds, handle around 70% of cases in the country and offer the highest scope for growth. It is estimated that 500 such new hospitals are added every year.  A tier-I city would typically have between 15 -25 hospitals of this size, with revenues of $ 1-2 million.

“PE backed companies are opening up specialized hospital chains of smaller size,” details Dr. Dhawad. “Even existing healthcare groups like Apollo are opening up smaller clinics which require fewer investments and can provide faster returns.”

Hospitals of this size face some typical challenges – they usually lack adequate administrative staff and hence, show glaring weaknesses in the area of hospital administration. Additionally, they suffer from revenue leakage and are not as profitable as they could be.

Nothing which an injection of technology cannot cure!

IT has a critical role to play in transforming not just patient care, but also the way that healthcare is delivered in India.  Technology can help healthcare reach a larger portion of the population, while enhancing the efficiency and productivity of healthcare delivery. IT finds application in almost every area of healthcare, from remote diagnosis to patient education to insurance. No matter the size and type of care provider, there will be a demand for Electronic Medical Records (EMRs), electronic prescribing, Hospital Information Systems (HIS), telemedicine, and Picture Archiving and Communications Systems (PACS), among others.


Figure 1: Typical solution lansdcape

IT also has a key role to play in proving better healthcare to rural areas. These regions, with a population of more than 700 million, continue to be deprived of adequate healthcare facilities. A burgeoning area which is truly making a difference to most of the outlying population of India is telemedicine, the remote diagnosis, monitoring and treatment of patients through videoconferencing or the Internet. As telecom costs decrease further, this space is all set to explode. As Mr Maninder Singh Grewal, Managing Director of Religare Technologies Ltd. points out: “Technology will make healthcare accessible and affordable. The phenomenal success of the telecom sector has set the stage for a similar explosion in the healthcare technology sector.” Additionally, major government initiatives like the UID, the state datacenters, and broadband reaching out to over 200,000 panchayats, present a great opportunity for Indian IT.

India has the fastest growing healthcare IT market in Asia, and is expected to be worth more than $254 million by 2012 (Source: SHS). Industry sources estimate that currently, annual IT spending in hospitals in India is approximately $191 million and will touch $1.5 billion by 2020 (Source: Zinnov Management Consulting). A mid-size hospital in India spends between 1 and 1.5% of turnover on IT, while a large hospital spends nearly 2% on the same.

Figure 2: Market size and projections (Source: SHS)

Reasons for low adoption of IT

Buy-side:

•       Doctors are not IT savvy; used to manual systems

•       Nurses who need to operate the system are not trained adequately

•       Nature of the profession is such that it generates a lot of paper documents

•       Sector may not want the transparency brought about by IT (majority of hospitals are unorganized or doctor- managed, numerous cash transactions, etc.)

Sell-side:

•        Vendor market highly fragmented and unsophisticated; have been unable to present the business benefits of implementing IT

•        Most existing products have evolved from custom solutions and many have only basic features

•        Implementation and post implementation support not sufficient

•       Lack of awareness on how IT can plug revenue leakages, improve profitability

•       Lack of modular packages

IT spend by hospitals has not been very forthcoming. Across the world, healthcare organizations have been slow adopters of IT and this trend is seen in India as well. Traditionally IT was not seen as a priority in an industry which focuses on curing sickness. A number of experts in the field point out that this mindset is gradually changing with an understanding of how IT can enable healthcare, and “India can quickly leapfrog the initial phases of technology adaptation and move directly into advanced clinical and patient care and health / medical records,” claims Grewal.

From the market perspective, perhaps the healthcare industry is not taking to IT as fast as it should because of a lack of availability of appropriate solutions. While the global market is dominated by players like GE, Cerner, McKesson, Intersystems and CSC, and larger Indian IT services companies like Wipro, NewGen and TCS, the India market is mostly neglected.  The healthcare IT vendor landscape here is highly fragmented with small players, no clear leader and no dominant solution. Existing solutions tend to be basic, and hospitals favour custom solutions, which are then tweaked and sold to other customers. How much of an actual need such solutions then address is anyone’s guess.

Booster dose of opportunities

As the healthcare sector becomes more receptive to technology, numerous opportunities will open up for SMEs and new entrants focusing on this space. “SMEs can create a niche for themselves in areas like mobile health, embedded systems, developing low cost advanced devices, interface solutions, medical imaging, telemedicine and cloud based solutions,” advises Dr. Dhawad. Grewal agrees, “Don’t be surprised if you see innovative products and solutions coming out of the stables of SMEs.  Smaller vendors, with their niche solutions can often innovate to fulfil a critical need that cannot be addressed by a large vendor who addresses a wider spectrum and focuses more on services.”

SMEs can focus quickly and be more flexible, and new trends like the cloud and mobile are levelling the playing field, allowing smaller companies to compete on an equal footing with their larger peers.

  • Enterprise mobility: As smart phones, tablets and BBs become ubiquitous and cheaper, SMEs will be able to build applications for the mobile at lower costs.
  • Cloud: The cloud enables a mid-sized company to develop a technology that can address a large audience, without investing upfront in expensive infrastructure. At the same time the cloud can enable smaller units like nursing homes to access and use technology generally available only to large enterprises.
  • New distribution channels: The BlackBerry AppWorld, iTunes Store etc. will offer enormous reach and exposure to any IT provider – even the small ones.

But this does not mean that the SMEs are free from challenges. Going forward, they will need to focus on building world-class innovative solutions which can complete with larger MNCs and also allow them to generate revenues globally.  Another major challenge will be to build credibility and trust, since in healthcare there is no scope for error and vendors will need to convince healthcare providers that their solution is reliable and trustworthy.

But the future is bright and the potential, immense. The combination of proven Indian IT talent and trustworthy medical and healthcare professionals will give India a clear leadership position.  Circumstances and technology are conspiring to give IT in healthcare a boost. Increasing healthcare costs, global economic disruption and the need for healthcare to reach remote areas – all these are pushing the demand for a new order where the best healthcare providers will be those armed with technology.

(This article also appears in Nasscom Emerge-http://emerge.nasscom.in/2011/03/fighting-fit-an-overview-of-the-market-for-healthcare-technology-solutions-in-india/comment-page-1/#comment-80585 )

The SaaS space in India: An Overview

The SaaS space in India is a fast-growing one and is gaining adherents with the tremendous advantages that it offers. At the same time, security concerns and a lack of adequate awareness about the true power of SaaS applications tend to arrest the growth of this technology. Read on to find out about the opportunities that abound in the SaaS space, especially for emerging companies.

No one can deny that the cloud is becoming all-enveloping in India and Software as a Service (SaaS), especially, inspires tremendous confidence.  Indian enterprises are fully aware of the advantages that SaaS brings – reduced capital expenditure, increased scalability and optimized service models.

According to Gartner, SaaS sales touched USD 9 billion in 2010 and are projected to reach USD 10.7 billion in 2011, a rise of 16.2%. Gartner also estimates that SaaS applications, which accounted for around 10% of the total enterprise software market in 2010, will be around 16% of global software sales by 2014.

Emergence of the SaaS space in India

Narasimhan Mandyam is the CEO of ImpelCRM, which has been successfully selling a SaaS CRM product in the Indian market for a few years now. He believes that India is the easiest market to penetrate in the SaaS space, thanks to the overall success of the entire economy. “The entire market is growing, and companies are looking for solutions that can scale up as their businesses grow. This is what SaaS offers. I can start small and then invest more in the cloud as my business grows, rather than make heavy investments upfront. This is of especial significance in a country where there are capital constraints, and where, capital, even when available, is generally deployed in productive assets.”

Pravin Agarwala, who heads the On-demand Division in India of SAP points out that the emergence of smaller buyer companies is also driving SaaS adoption. “The SME market is a big one that is not being adequately tapped, or is being serviced through unstructured software solutions,” he claims. “This is also a cost-sensitive segment, and if you can make software a commodity and offer a pay-and-use model, that is going to be a saleable option!”The SME segment, with TCO as a major driver, is the biggest adopter of SaaS today. Larger enterprises, on the other hand, look to the cloud for flexibility, scalability and improved manageability.

Drivers for the emergence of the SaaS space

  • Rise of infrastructure to support greater cloud growth
  • Availability of affordable and quality broadband services
  • Growth of virtualization
  • Need for anytime, anywhere data access for a mobile workforce
  • Evolution of telecom service providers into SaaS carriers
  • Unique business model, pricing and support innovations

Drivers for the rapid growth of the SaaS space in India

  • TCO: pricing is less than an on-premise solution, with OPEX as well as CAPEX being minimized, and flexibility of consumption offered
  • IT: SMEs need not invest in IT resources to manage back-end installation, maintenance, updates, etc. (as for an on-premise solution)
  • Environment: usability is better than on-premise solution, without need for investment in months of initial user training
  • Efficiency: SaaS applications can be easily integrated with the larger enterprise application

Research shows that India is a rapidly growing market for SaaS. According to Springboard Research, SaaS in India is expected to reach USD 352 million in 2012, with enterprise spending expected to grow at 60%, as compared to 46% in Asia-Pacific between 2008 and 2012.

The role of SMEs in this space

And the SaaS opportunity seems to be tailor-made for SMEs, from a vendor perspective as well. As Mandyam points out, “The biggest challenge in software lies not in building technology but in selling and distributing it. In traditional models, you need a well-developed sales force and distribution channels to be successful, something which an SME may not be able to afford. Now, with SaaS, it is as simple as paying for the right keywords on Google. At a significantly lower cost, you can enter pretty much any market in this country!”

India has around 35 million SMEs, ranging from small mom-and-pop outfits, to small companies with 500 employees and medium-sized ones with 2000 employees. All these companies need some kind of IT support, no matter which industry they are in; and they are generally in some niche, specialized areas which demand domain expertise of the vendor.

Nischal Khorana, who heads the ICT Consulting Practice at Frost & Sullivan notes that while the large enterprises are investing heavily in creating an awareness of SaaS, SMEs are taking a different tack altogether. They are creating niche solutions that are vertical- or function-focused. “SaaS thus offers ample scope to both larger and smaller vendors,” states Khorana. “Larger vendors can take larger slices of the pie and SMEs can aim for a niche market.”

Emerging trends

  • SMEs are buying SaaS
  • SaaS is being used for all processes and operations, as long as security issues are addressed. “I did not see this in the US, where silos of products still exist on the cloud,” emphasizes Mandyam. “In India, people are willing to look at an integrated solution, probably because we are a service economy.”
  • Large companies are investing heavily in marketing to create an awareness of the space, while smaller vendors are exploring how they can leverage this disruptive delivery model through niche solutions.
  • Vendors are looking for new ways of convincing the customer and the SaaS space lends itself to this. Explains Khorana, “Vendors can use the cloud to create a platform where the customer can try out the application. Trials, free download periods, proof of concepts, etc. are standard now. These touch and feel the applications are necessary to instil confidence in the solution.”
Challenges to growth of SaaS
Low broadband penetration and reach
Lack of scale of solutions
Availability of pirated software
Shortage of IT talent
Existing high level of comfort with on-premise applications
Lack of adequate awareness in the market about the availability of SaaS applications

Predictably, the driving force of the SaaS space, at least for the time being, is CRM. But it is just as applicable for just about any function – HRM, collaboration solutions, etc. Customers are willing to adopt SaaS for solutions in any areas that are not ‘core’; here, some amount of ‘experimentation’ will not be too risky. “Once more confidence is built in the cloud, customers will probably move more of their core applications to it,” says Khorana.

And SaaS is for all verticals, though the BFSI segment has been slower to adopt the technology, given perceived security issues and loss of control over sensitive data.

SaaS players – big and small
Some big players Some emerging players
salesforce.com Zoho
TCS SalesBabu.com
Ramco Frontline SSM
SAP ImpelCRM
Navision Deskaway
Microsoft Greytip Software
Oracle MangoSpring
Impulse
NetMagic

Future outlook

Trends indicate that the SaaS market isburgeoning, but also that deployments in the spaceare not as extensiveas one would expect, since most customers have deployed SaaS applications in silos, without integrating them with other enterprise applications.

Khorana points out that over the next 3-5 years we can expect some degree of maturity, in terms of SLAs, delivery capability, and partnerships within the IT ecosystem, with larger enterprises tying up with vendors to deliver much-needed solutions to the market.

Mandyam is very positive about the future of SaaS. “There are 9 million SMEs in this country that desperately need some degree of automation, and they are going to find some solution or another through SaaS. That’s 40-50 million people over the next 10 years who will use SaaS in some way. This is huge! Larger than anything that you have seen in any country in the world!” he concludes.

 (This article also appears in Nasscom Emerge-http://emerge.nasscom.in/2011/06/the-saas-space-in-india-an-overview/comment-page-1/#comment-80586 )

News: Verne Global Opens World’s First Dual-Sourced 100% Renewably Powered Data Centre

Verne Global, an innovative, UK-based developer of power conscious data centre campuses, today announced the availability of its colocation service from its 18-hectacre campus in Keflavik, Iceland. Verne Global’s data centre campus is 100% carbon neutral, drawing commercial power from Iceland’s dual-sourced renewable energy power grid and utilising Iceland’s ambient temperatures to provide free cooling. Datapipe, a leading provider of managed services and infrastructure for mission critical IT and cloud computing, will be one of the first customers to have a presence in the new data centre (See Datapipe Press Release – Datapipe Partners with Verne Global to Deliver Green Cloud from Iceland).

READ MORE: http://www.prnewswire.com/news-releases/verne-global-opens-worlds-first-dual-sourced-100-renewably-powered-data-centre-131122388.html

Building green data centers for a better future

Today, everything is being hopping onto the green bandwagon and data centers are not far behind. Smartly designed data centers can reduce energy consumption and electricity bills dramatically. Google, IBM, HP and GE have been going green for quite some time now. Facebook recently joined the league by building an open source, innovative green data center at Prineville, Oregon. Experts claim that this ground breaking development will create a ripple effect on corporate green strategies for several years from now. IBM has always walked its talk as far as green technology is concerned. The enterprise has been dedicating $1 billion on a yearly basis since 2007 across its businesses to mobilize its resources towards increasing energy efficiency.

There are data centers and then there are green data centers. The major areas that are associated with “green-ing” of enterprise data centers can be classified as follows:

  • Carbon offsetting must be the focus while planning the design of the data center.
  • The use of low-emission building materials, paints etc
  • Sustainable landscaping
  • Virtualization maximization – Reduce travel, commuting and real estate costs (Use remote access software to enable file sharing, web access email , Mobile computing, phones, Internet access, text messaging, instant messaging etc)
  • Waste recycling
  • Installation of catalytic converters on backup generators
  • The use of hybrid or electric vehicles
  • Green data center construction – Smart use of cooling techniques, leveraging local climatic conditions, raised floor lighting. (The appropriate temperature issued by the American Society of Heating, Refrigerating and Air-Conditioning Engineers is 72°F/22°C)
  • The use of alternative energy technologies such as photovoltaics, heat pumps, and evaporative cooling
  • Solar power consumption
  • Engagement with reliable infrastructure and asset suppliers who demonstrate a commitment to reducing hazardous materials in their manufacturing, packaging and factory waste

Since green IT is serving both economic and environmental causes, IT organizations are exploring options enthusiastically. Although the initial cost for setting up a green data center is usually high, the long term ROI gains are around 40 – 50% per year. This, combined with awareness of rapidly changing global climatic conditions, is reason enough for business leaders to look for alternate cost cutting green options for building/redesigning their data centers.

Enterprise Mobility – calling for collaborative services

Enterprise Mobility- How important is it really? The significance of seamless connectivity for an enterprise has changed remarkable over the years. A few years ago, organizations were concerned that the advent of BlackBerry and other smart devices would result in privacy and work-life balance issues amongst their employees. However, disruption related concerns are no more relevant. Today, enterprise workforce has blossomed into a knowledge workforce. EMobility is now seen as a means to increase agility within an organization by fostering collaboration within the employees and with the customers, partners etc. A recent study conducted by Ipsos Reid reveals that a company can achieve improved workflow and upto 60 additional minutes per day of productivity per BB user with time sensitive e-mail access. Now that’s a lot!

In a large scale EMobility survey conducted by PWC, 8,100 partners and employees in 27 countries were interviewed. Interestingly, the demand for mobile solutions remained quite the same for employees regardless of whether they are out of the office 10% or 90% of their time. Also, region wise overall demand for mobile services was relatively consistent. However, a slight variation was observed at the country level. Chile, China and India showed a greater demand for mobile devices. Contrary to expectations, USA respondents showed low enthusiasm for the same. In addition, the respondents under the age of 35 have the greatest demands and men have higher demands than women in all regions around the world.

The EMobility industry is on the cusp of a fundamental shift that will lower barriers to market entry, drive growth, and require innovation to retain and grow market share.

Users want to be able to stay connected and access their data services while they are in their car, in an elevator, in or around their offices, homes, hotels or wherever. The strongest demands are for location-based services, seamless voice and connectivity series; so that they will stay in control of the devices instead of the devices controlling their activities.

Of course, there is a flip side as well. Firstly, a reasonable number of employees have privacy concerns about location based services. They are not comfortable letting their location be traceable at all times. Secondly, devices are shrinking in size while their capacities are increasing. The likelihood of losses of significant privileged data thus increases. Lastly, multi-utility devices can have features that are not appropriate for the workplace, like cameras.

The above concerns can be dealt wisely and avoided with an appropriate set of protocols. Moreover, the benefits are way too extensive than them. Clearly, mobile solutions play a compelling role in improving productivity and contributing perceived job satisfaction.

In order to address its mobile strategy, the best approach an organization can take is segmentation – profiling the workforce into segments. This will help in clearly defining the mobile services required for each segment and hence saving incurred cost.

Enterprise mobility is likely to transform many business processes. Therefore, it should be viewed as an important strategic endeavor, calling for processes that will need to become increasingly collaborative.