Written on April 11, 2008 – 4:45 pm
Ernst-Jan Pfauth, editor in chief
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A study by Forrester shows that continental European companies are hesitant to outsource work like software engineering to countries like India. Forrester analyst Sudin Apte: “We are seeing only a few large offshore deals from Continental Europe, because companies there are still testing the waters, and the ramp up is very slow.” The United States though, are pretty fond of the Indian outsources. American companies make up for 60 percent of all the revenue made by Indian outsourcing companies.
Yet Indian companies foresee problems now the US economy faces a possible recession. Therefore they try to convince European companies to use their services. This turns out to be quite complicated, since European companies still insist on offering local service, partly due to local languages.
According to Apte, companies from U.K. and US are willing to change their systems and production processes. Even newspapers outsource editorial work. But a French company “would want its vendor to fully adopt French business practices, deliver from a local facility and interact in the local language”. But they do feel the need to start outsourcing on a larger scale, Apte said. “They will start with projects offshore that involve 30 to 40 people on a project, and then ramp up quickly”.
Written on March 25, 2008 – 8:00 pm
Ernst-Jan Pfauth, editor in chief
During one of the lunches at the LIFT conference in Geneva I met Markus Fuhrmann. He’s the co-founder of Web2Asia. A European service with headquarters in Shanghai that specializes in supporting western Internet companies and Mobile content developers to get a company or service going in China, Japan and Korea. Needless to say, there’s a lot of potential in these rapidly developing markets. Some of their clients are Jimdo (Germany), Xendex (Austria) and Vanilla Live Games. I kept in touch with Markus, and the business he runs turns out to be really fascinating. So I decided to ask him some questions about this hard to comprehend Asian markets.
Markus has a entrepreneurial history in games. His story in China began with an IMBA semester at Tongji University in Shanghai. “In the beginning I both loved and hated it in China, because I started my stay with one week in a Chinese hospital with pneumonia. After recovering and getting used to the cultural and environmental differences, I started to enjoy the dynamics and sheer endless opportunities available here.” He consulted several companies on how to launch in China. When he met his partner George Godula they connected immediately and it made perfect sense for them to team up.
How to bring a product from Europe or the US to Asia
So, when I want to enter the Asian market, what should I take in account? “The East Asian characters. This is a smaller problem for completely web based services but can amount to a lot of work if you have to change your client or back end infrastructure because you forgot to use Unicode and double byte support in the first place. In terms of function and usability there are a lot of things to watch out for, especially in Japan and Korea with the example of mobile phone support, which is crucial.”
“The second important part is the content side. Here you have to take care that the content fits the Asian culture, especially in terms of symbols and language. Another sensible topic is working specifically to local legislation requirements and restrictions on certain content.” I assume Markus is referring to dealing with censorship in China. Which probably brings some conscience issues.
The last part is less complicated and controversial, namely the feasibility of the underlying business model. Markus: “It’s already quite hard to earn money through advertising in Europe and the US, but it is even more difficult to earn money through this model in East Asia. The positive examples have been able to transfer a model of premium memberships, customizable content - micro payments - and value added services.”
Facebook doomed to die
These three different parts seem to create some obstacles for all the global players, since they failed to gain a foothold in East Asia. “One of the most famous examples that didn’t work out in China has been Ebay China, the local competitor Taobao realized that Chinese users prefer much more to buy products instantly than to wait for an auction to end. Same thing with Google; in Korea the company only has approximately 6% of the market share. As for other western hypes, they have yet to make it to East Asia, which are not good signs either. For example, jokes are already going around in China calling Facebook, “fei si bu ke” (非死不可) a transliteration which means ‘doomed to die’.” (more…)
Written on December 8, 2007 – 10:49 am
Boris Veldhuijzen van Zanten,
My guess is that 95% of all current businessplan mention Google at the first logical exit partner. It used to be Yahoo and Microsoft before that. But it seems that there is another company that is swimming in cash and looking for innovative companies to aqcuire: Apple.
“Apple can afford to spend a billion, or 2, to acquire your company”
With a cash reserve of up to $15 billion (Source: Fortune) they sure can afford to spend a couple of billion on your business. And you might say that they are a hardware company and are probably not interested in your little Web2.0 scheme. But Apple is so much bigger than just hardware these days. They are a hardware, software, telephony, music, ecommerce and multimedia company. One thing they aren’t yet is a search or social network company. But why not change that? iTunes was a Mac only product at first but then turned ‘PC’ after a year or so and is THE music player on Windows now.
What if Apple would acquire Facebook? They can afford it, in cash, and would suddenly become THE online social network player with the hippest offline social meeting places in the world: The Apple store.
Yep, it is time for Apple to start making some acquisitions in the Internet world. What will YOU sell to Apple in 2008?
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