Online communication industry analysis

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An industry analysis of the online communication market including mail and chat. …

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