Jamcracker Evolves According to Service Provider Suggestions

It was all about SaaS at ISPCON, and one of the few survivors of the ASP boom talked to us about how the company has reinvented itself for a new trend in which service providers play a major role.

by Alex Goldman ISP-Planet Managing Editor [November 22, 2006]

When ASP News was founded by Phil Wainewright in the 1990s, the Application Service Provider was seen as the next logical step for the evolution of the computer from macro to mini to micro and back to a client. The website wrote about the company regularly.

Today, a similar trend has arisen, Software as a Service (SaaS), and was prominent at ISPCON. Headed by poster child SalesForce.com, the new operators promise all the features of million dollar software, such as CRM, at a fraction of the price, using the cost reduction made possible by internet-sized economies of scale and development cycles emphasizing incremental improvement (paid for by subscriptions) instead of megabuck upgrades.

The subscription pricing model allows SaaS products to fit in neatly with the offerings of ISPs in the broadest sense of the term: anyone offering internet services, a group often divided into categories such as MSPs, webhosts, VARs, and, confusingly enough, ISPs, now taken to mean only those companies that specialize in selling internet connections.

Jamcracker is one of the few companies that has made the jump from technology-driven ASP services to customer-driven SaaS cycles. "We were an ASP aggregator in 1999," explains Don Best, Jamcracker vice president of strategy and marketing, talking to us on the phone the week after the show.

"What we learned seven years ago was that the technology, back then, would not scale. It did not offer margins for providers and resellers. But we had built a platform, and we knew that the trend would come back."

Jamcracker's role
Jamcracker understands that it cannot sell directly to millions of small business customers. So it's looking to trusted advisors. "Our goal is to enable the channel to be the critical link [between small businesses and SaaS providers]," says Best.

Best sees two categories of SaaS solutions: high touch and low touch. Some software, such as VoIP PBXes or CRM databases, requires integration and customization. The service provider can help the small business populate a database, for example. Other services, such as unified threat management and webmail, can be deployed at the click of a button with automation provided by the software company. Best cites McAfee's Total Protection for Small Business as an example of a service that does not need to be customized (everybody needs protection!).

The Jamcracker solution, Best claims, provides the billing and provision that makes it happen. "We're the Ingram Micro of SaaS," he says.

The company provides the software and either the SaaS provider or Jamcracker or the ISP can provide the customer service.

Jamcracker's certification
However, we point out that Ingram Micro delivers boxes to retailers using trucks and warehouses, but Jamcracker's infrastructure is software and data centers.

Best says that Jamcracker's data center and software have SAS 70 level 2 certification, and that the company looks for partners who are also certified. Of course, the company wants a long term partner who will not disappear overnight. But Jamcracker has also found that its own customers, the service providers, don't want a marketplace that every SaaS provider can play in.

"The original idea was to build an open marketplace that any SaaS provider could play in," says Best. "But our resellers want a vetting process. So when we add a new service, we develop criterion, with advice from the experts, and narrow it down to the best two or three companies, who then become part of the Jamcracker Service Delivery Network (JSDN).

The future
Since the JSDN was announced in July (see Jamcracker Service Delivery Network 2.0), the company has signed about a dozen service provider resellers.

The goal now is to increase that number significantly, to 100 by the end of January, 2007. "I have an inside sales person working the phones," says Best.

"Once service providers see a handful of people making money at this, the rest will get on board," says Best. At that point, the company will doing what it talked about at ISPCON, Kicking SaaS.

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