Online communication industry analysis

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An industry analysis of the online communication market including mail and chat.
By Kumar Priyadarshi and Ann Thomas of Vinod Gupta School of Management, IIT Kharagpur

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Online communication industry analysis

  1. 1. Presented By Kumar Priyadarshi 09BM8069 Ann Thomas 09BM8025 Communication
  2. 2. Some Numbers <ul><li>If email was a country, its 1.88 billion users would make it the largest in the world . Bigger than China, bigger than the populations of the USA and European Union combined </li></ul><ul><li>294 billion emails  are sent each day </li></ul><ul><li>13.4 billion : the number of direct marketing dollars that went </li></ul><ul><li> into email in the US in 2010 </li></ul><ul><li>$583 billion : The return from that investment on email </li></ul><ul><li>marketing </li></ul><ul><li>53% of all companies in the world actively block public IM/Chat </li></ul><ul><li>45 million licensed users of Lotus Sametime </li></ul>Reference: IBM Systems Magazine ; Dr. Douglas J. Fiore: School Community Relations No figures older than November 2010
  3. 3. The Big Names
  4. 4. How they Run the Business <ul><li>Automated email scanning system to push highly targeted ads </li></ul><ul><li>Fees for >7 GB storage </li></ul><ul><li>Gmail Revenues : Gmail had revenue per 1,000 page views of 6 cents in 2005 which increased to about 30 cents in 2009 </li></ul>Google Share Price : $ 574 Ref: www.trefis.com :Analyzing a product’s impact on the company’s share price (20 Mar 2011)
  5. 5. How they Run the Business <ul><li>Installable in PCs and over handheld devices such as I-Phone and Nokia N900. </li></ul><ul><li>Skype had around 443 million user accounts, which generated around 620 million in revenue (2009) </li></ul><ul><li>Business Model of Skype </li></ul><ul><ul><li>Freemium </li></ul></ul><ul><ul><li>Prepaid credit users </li></ul></ul><ul><ul><li>Hardware licensing from hardware vendors such as Nokia </li></ul></ul><ul><ul><li>Advertising </li></ul></ul><ul><li>Currently, Microsoft and Yahoo's webmail services are earning revenue by selling premium email accounts and ads. </li></ul><ul><li>$19.99 per year for premium account </li></ul><ul><li>Yahoo! Messenger - collects charges when a call is made from PC to a Phone; advertising </li></ul><ul><li>Windows Live ( Messenger + Hotmail) earns $1/user/year </li></ul>
  6. 6. How they run the Business <ul><li>Meebo </li></ul><ul><ul><li>Venture Capital Funding from Sequoia </li></ul></ul><ul><ul><li>Advertisements on sharing </li></ul></ul><ul><ul><li>Surveys </li></ul></ul><ul><li>Digsby </li></ul><ul><ul><li>Installing bundled applications like toolbars, homepages, Ad-Stallers, Back-ground Processing Apps; free of ads </li></ul></ul>
  7. 7. How they run the Business <ul><li>OoVoo </li></ul><ul><ul><li>3 way Video Chat </li></ul></ul><ul><ul><li>Video chat with up to six friends, family or colleagues at once. </li></ul></ul><ul><ul><li>Phone Calls </li></ul></ul><ul><ul><li>Desktop Sharing </li></ul></ul><ul><ul><li>Video conference </li></ul></ul>
  8. 8. PEST
  9. 9. Business Communication <ul><li>For a big enterprise (15000 employees) </li></ul>Reference: Forrester Research Report Should Your Email Live In The Cloud? A Comparative Cost Analysis; 2010 http://www.cio.com/article/474672/Gmail_vs._Traditional_E_Mail_Savings_Adding_Up
  10. 10. Costing <ul><li>Then Why Still E-Mail Hosting? </li></ul><ul><li>Safety, Backup, Spam Protection, Authentication, Encryption </li></ul><ul><li>Uptime. </li></ul><ul><ul><li>Gmail Outages </li></ul></ul><ul><ul><li>Google promises at least 99.9% uptime for its Premium customers </li></ul></ul><ul><ul><li>Nevertheless, it’s a leap of faith for an organization </li></ul></ul><ul><li>Reluctance to train employees who have grown used to Outlook </li></ul>
  11. 11. The Future – Going Mobile ? <ul><li>In 2010, the number of visitors to email/chat sites </li></ul><ul><ul><li>via PCs - declined 6 % </li></ul></ul><ul><ul><li>via mobile devices - up 36 % </li></ul></ul><ul><li>By 2013, mobile phones will overtake PCs as the most common Web access device worldwide. </li></ul><ul><ul><li>Total number of PCs in use will reach 1.78 billion </li></ul></ul><ul><ul><li>Base of smartphones and browser-equipped enhanced phones will exceed 1.82 billion </li></ul></ul>Reference: Gartner Predictions for IT Usage 2010 and Ahead
  12. 12. The India Story <ul><li>Business Email Provider (Small Players) </li></ul><ul><ul><ul><li>net4 </li></ul></ul></ul><ul><ul><ul><li>HotDak Mail </li></ul></ul></ul><ul><ul><ul><li>123 india </li></ul></ul></ul><ul><li>11 million mobile internet users </li></ul><ul><li> double since last year </li></ul><ul><li>Total internet access via PCs: </li></ul><ul><li> 52 million </li></ul>Web Mail Provider Number of users Growth rate Gmail 18 Million 23% Yahoo Mail 16.8 Million 4% Rediff mail 6.25 Million 4% Windows Live mail 2.6 Million 10%
  13. 13. Porter Five force Analysis <ul><li>Rivalry among Existing Firms </li></ul><ul><li>Market Share of different Webmail Providers </li></ul><ul><li>Comparison of different Email Providers </li></ul><ul><li>http://en.wikipedia.org/wiki/Comparison_of_webmail_providers </li></ul>Web Mail Provider Total No. of users Growth Rate Windows Live Hotmail 364 Million -4% Yahoo Mail 280 Million 11% Gmail 193.3 Million 43% AOL Mail 89 Million 19%
  14. 14. <ul><li>Threat Of New Entrants </li></ul><ul><li>Facebook </li></ul><ul><ul><ul><li>Stickiness: The amount of time users spend on a site. Facebook stickiness quotient is very high </li></ul></ul></ul><ul><ul><ul><li>Convergence: All communication on a single page: Chat, Photo and Video Upload, Email, Social Networking </li></ul></ul></ul><ul><ul><ul><li>Trendy: Coolness quotient of facebook . </li></ul></ul></ul><ul><ul><ul><li>The growing facebook universe </li></ul></ul></ul><ul><ul><ul><li>Switching Cost to Buyers: Low if Facebook otherwise very high, Low exit barrier, Time to market is very low </li></ul></ul></ul>Porter Five force Analysis Contd.
  15. 15. <ul><li>Determinants of Buyer Power </li></ul><ul><li>Total no. Of email users: 1400 Million </li></ul><ul><li>Switching Cost : Moderate. </li></ul><ul><li>Internet users uses more than one e-mail address </li></ul><ul><li>Internet users threat of forward integration i.e. Facebook </li></ul><ul><li>Threat of Substitute Products </li></ul><ul><li>Substitute Products: Social Media (LinkedIn, Facebook, Twitter) </li></ul><ul><li>Relative quality of substitute: security, Interface, convergence </li></ul><ul><li>Relative Price of Substitute: </li></ul><ul><li>Switching cost to Internet users: </li></ul><ul><li>Business Users: Very High </li></ul><ul><li>Normal Users: Moderate </li></ul>Porter Five force Analysis Contd.
  16. 16. <ul><li>Determinants of Supplier Power </li></ul><ul><li>Resources: IT infrastructure, easily available at competitive price </li></ul><ul><li>Programmers: easily available. </li></ul><ul><li>Need new innovative ideas for good products and being a step ahead in market </li></ul><ul><li>Suppliers: </li></ul><ul><li>Mail2world Inc: designs, delivers, and supports a suite of business-class, Web based e-mail and collaboration services. </li></ul>Porter Five force Analysis Contd.
  17. 17. Opportunities and Threats <ul><li>Opportunities </li></ul><ul><li>Cloud Adoption </li></ul><ul><li>Collaboration applications such as email, chat , File Sharing on Cloud </li></ul><ul><li>Promotional Email Delivery : </li></ul><ul><li>Mails to priority Inbox </li></ul><ul><li>Privacy Issues with Social Networks </li></ul><ul><li>Threats </li></ul><ul><li>Outage time </li></ul><ul><li>Security of email leaks </li></ul><ul><li>Archive Maintenance </li></ul><ul><li>Electronic communications of some employees in financial services and medical-related businesses are required by law to be archived for years, and data handled by those users must be secured. </li></ul>
  18. 18. Future <ul><li>Future Trends </li></ul><ul><li>Voice chat and video chat on Social Networking </li></ul><ul><li>Digitally signed Voice chat/Video Chat </li></ul><ul><li>Extensive use of Video chat in Developing Nations </li></ul><ul><ul><li>Checkups via Video Chat e.g. Project Hope: Mobile E office in Rural New Mexico </li></ul></ul><ul><ul><li>Use of remote stethoscope creates a digital audio file that can be saved and even shared with the patient, so she, too, can hear what the doctor is listening to. </li></ul></ul><ul><li>Mobile Video Chat </li></ul><ul><li>Virtual Reality during chatting </li></ul>
  19. 19. Entry into Webmail <ul><li>Increasing sophistication </li></ul><ul><li>Small webmail players can no longer compete </li></ul><ul><li>A good web-based user-interface is a one time expense, but still small players can't afford it </li></ul><ul><li>Also, big storage quotas require losing money at least initially, and small players typically don't have deep pockets to take that route. </li></ul>
  20. 20. Kumar Priyadarshi Ann Thomas Vinod Gupta School of Management IIT Kharagpur Thank You

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