Loaded pricing of MaaS (Mobile as a service) and why BYOD does not work in India.

 

We have field force of more than 50 million in India spread across variety of industry verticals. Majority of this workforce is not necessarily comfortable using computer but are very conversant with Mobiles and tablets. So the only realistic way India’s enterprises are going to automate their entire operations is by automating this workforce using mobile devices. Legacy way of doing this was using a PDA but with advent of Android devices at extremely attractive costs, you do not need to buy clunky PDAs anymore. We are leveraging this exact opportunity with Bizom, our flagship product.
As a true software as a service product, Bizom comes with a published pricing starting at Rs 500 per user per month.But most of the time, our customer’s  loaded upfront cost goes much beyond it. And this presents a huge barrier to entry for enterprises and SMEs to use Mobile as an automation device.

For example here is how the calculation works for an enterprise with 1000 field users depending on their network or device choice.

Network EDGE EDGE 3G 3G
Device Nokia Java feature phone(Like Asha 302) Android Phone Android Phone Android Tablet
Number of Users 1000 1000 1000 1000
Bizom Plan Price per month per user(Rs) 750 750 750 750
Data plan cost per month per user(Rs) 99 99 299 299
Device cost(Rs) 3500 7000 7000 15000
Total monthly cost 849000 849000 1049000 1049000
Total one time cost 3500000 7000000 7000000 15000000
Total loaded cost for starting 43,49,000 78,49,000 80,49,000 1,60,49,000
Device cost as % of one time cost for decision making 80.48 89.18 86.97 93.46

Imagine spending 1.6 cr on devices to just try out automation !!

I know the obvious answer is BYOD (Bring your own device).

Why don’t we build software that just works on every phone that a field executive carries.

Here is a sample list of mobile phones executives carry.(This is for one of our existing customers ..)

  • Rage RQ 101
  • Nokia 603
  • Samsung Wave 505
  • Samsung GTE 1200T
  • Spice SEB 05
  • Nokia 2700
  • Nokia X2
  • Micromax Q22

And so on ..

Notice the diversity of devices and operating system .. some of them cannot run downloadable applications. Most of them offer extremely poor user experience.

So, in short you cannot deploy a sustainable automation on the existing devices of executives unless they carry at least a smartphone/tablet. And in India, we are a few years away from that happening.

So what can a company like us do to reduce loaded upfront costs for their customers?

Here are few things one can do

Offer devices on easy monthly installments

This is usually an instant hit with customers. If you can offer devices on easy monthly installments, and reduce upfront costs, customers lap it up.

But it obviously has a flip side, your organisational risk is great.You do need big pockets to service a large customer with 100s of users.

What we do, is to offer these devices with some returnable deposit which reduces upfront risks for both us and the customers !!

Company schemes

Our customers use variety of schemes to ensure RoI from the devices themselves

Company will provide a free handset to an employee only

1. If an employee stays with the company for 1 year

2. Employee meets her targets on ongoing basis.

3. Employee bears partial costs (Lot of the enterprises keep owning a motorbike as a mandatory requirement for a field job, thankfully smartphones are much cheaper …:-))

In Summary, buying mobile devices can be a huge barrier for enterprise/SME customers who want to benefit from try before you buy facility offered by Software as a service companies such as ours but thanks-fully we believe that there are workarounds..

What do you think?

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  • Ganges Morekonda

    Lalit,

    It’s not just a India market problem, it’s an universal problem. One option is bring the operator in the equation to subsidize the device cost at least for 1 year contract. This is why it’s successful in the western world. Also, the success of BB in the enterprise world on top of security. I know that there is a downside of revenue share and other contractual overheads to be dealt with. But, it’ll largely reduce the upfront cost from the customer perspective to cross the barrier for adoption.

  • aditya shanker

    hi,

    why can’t you implement the SMS gateway commands for automation that will be far better than relying on app. we can design apps for limited phones which will also in background send SMS , if they don’t have phones for which we will develop app they can just SMS which contain authentication request and data to be updated.

  • Imagine the users. These are executives who are short on time and typing a lengthy sms template is just out of question. As far creating an app is concerned, the phones which can run an app have GPRS too and cost of GPRS is much much lower than cost of SMS in India as a transport medium