When Sachin Bansal and Binny Bansal, founders of online book store Flipkart, set out to raise their first round of venture capital (VC) in 2009, all but two VC firms turned them down. Today, the Bangalore-based e-commerce startup is the toast of the VC fraternity. Since 2009, it has raised $31 million in funding, from Accel Partners and Tiger Global. But this is small change compared to the $150 million that the company is reportedly in line to raise from private equity investor General Atlantic Partners.When BW asked CEO Sachin Bansal about the reported fundraising, his response was a predictable, "We are not commenting on speculation on any future rounds of funding."Further enquiries within the VC community reveal that a deal is indeed in the offing though the quantum raised will likely be $100 million or less. Even so, it will still be the single largest investment in an Indian e-commerce startup till date.If the company does raise the reported $150 million, it will do so at dizzying valuations. For the financial year ended March 31, 2011, the company's cumulative revenues, as filed with the Registrar of Companies, were in the region of Rs 50 crore ($11.22 million), says Bansal. E-commerce startups have been wildly pursued by VC firms in the first six months of calendar year 2011, with over $200 million already invested. Concerns of an investment bubble are not unnatural. That makes Flipkart's ability to execute and scale very important. "Flipkart's success lies in its core technology and execution," says Prashant Prakash, partner at Bangalore-based Accel Partners, the first VC firm to back the company. Tiger Global came in later with $30 million over two tranches. In just four years, Flipkart, which currently offers over 10 million book titles, has sold 2 million items across categories and claims Rs 1 crore in sales per day. It has also diversified its revenue base, with book sales contributing less than 50 per cent. The remainder, claims the company, comes from categories such as music, consumer electronics and personal care. These numbers have been built up using a two-pronged killer go-to-market strategy. First, while the company positions itself as an ecommerce company, more than 60 per cent of its transactions are cash-on-delivery. Online payments are still not as popular with consumers in India as they are in markets such as the US and Europe. However, this also means that the company has to spend more on field staff and logistics to deliver merchandise and collect payments. It currently employs 2,500 people overall. Second, the company offers an average 25 per cent discount on the cover price of every book its sells. Bansal says that the company's low-cost, online model allows it to absorb the discounts without hurting margins.The next eight months will see Flipkart's founders aggressively ramp up its technology, supply chains and logistics and customer support and marketing. Their ambitious target is Rs 600 crore ($133.9 million) revenues by March next year. The speculated $150 million being raised on the back of these growth projections. It could be the deal that defines the future of e-commerce in India.
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Google Inc, fresh from losing a bid to buy thousands of patents from bankrupt Nortel, lashed out at its biggest rivals on Wednesday and accused them of banding together to block the Internet giant in the red-hot smartphone arena.In a rare public outburst, Google Chief Legal Officer David Drummond blasted Microsoft, Apple, Oracle and "other companies" for colluding to hamper the increasingly popular Android mobile software by buying up patents, effectively imposing a "tax" on Android cellphones.Apart from increasing costs for consumers, snapping up the patents will stifle technological innovation, he said."Microsoft and Apple have always been at each other's throats, so when they get into bed together you have to start wondering what's going on," Drummond wrote in a blog post.He referred to "a hostile, organized campaign against Android by Microsoft, Oracle, Apple and other companies, waged through bogus patents."Microsoft and Apple had teamed up to acquire patents previously owned by software maker Novell and bankrupt telecom firm Nortel Networks Corp. to ensure "Google didn't get them," Drummond added.But Microsoft's General Counsel Brad Smith disputed Drummond's version on the Novell patent issue on Twitter."Google says we bought Novell patents to keep them from Google. Really? We asked them to bid jointly with us. They said no," Smith tweeted in response to the blog.Representatives from Apple and Oracle declined comment.Google - which is facing a federal antitrust probe in the Internet search market it dominates - is forging ahead in the smartphone market. But it has been hampered by a lack of intellectual property in wireless telephony, which has exposed it to patent-infringement lawsuits from rivals like Oracle.It lost out on the Nortel patents to a consortium grouping Apple, Microsoft, Research in Motion and others, which together paid $4.5 billion.Google individually had bid up to $3.4 billion for those patents before teaming up with Intel Corp, which on its own had bid up to $3.1 billion, according to a source familiar with the matter.They bid through $4 billion and then tapped out, another source had told Reuters.Patent PortfolioThe Android software, now used by phonemakers including HTC, Motorola and Samsung, has rapidly overtaken Nokia to become the world's most popular smartphone platform, with about a third of the market.Drummond said the company was looking to strengthen its patent portfolio. Google, whose crown jewel is its search algorithm, has never placed the same priority on patents as it has on copyright, but is now hoping to stock up. It recently bought more than 1,000 patents from IBM.The Internet search leader is now in talks to buy InterDigital, a key holder of wireless patents valued at more than $3 billion, according to the Wall Street Journal.That shift in mentality comes as a wave of patent suits crisscross the wireless industry. In past years, incumbents have tried to protect their position against newcomers like Google, which entered the market three years ago with Android.HTC received a setback last month when a U.S. trade panel said it had infringed on two of Apple's patents.Also, Samsung has delayed the Australian launch of its latest Galaxy tablet due to a patent dispute with Apple, which says the South Korean electronics giant "slavishly" copied the iPhone and iPad.And Oracle is suing Google, claiming Android infringed on Java patents that it inherited through an acquisition of Sun Microsystems in 2010.Patent acquisitions are expected to accelerate, with IBM and Kodak often mentioned as shopping intellectual property on the market. (Reuters)
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A quiet revolution is happening in the Walled City of Delhi. The Shahjahanabad Redevelopment Corporation (SRDC), an autonomous body under the Delhi government, will soon start restoring monuments in the most densely populated part of Delhi. In the first phase, work has already started in crowded Daryaganj that links the old city to New Delhi. Here the SRDC is building an underground concrete pipeline network. Pipes will carry optic fibre cables and power lines. There will be separate ducts for water supply and sewage disposal too. The pipeline network could well change the face of Union communications minister Kapil Sibal's constituency, Chandni Chowk. Apart from clearing the area of the overhanging wire maze, it will provide 2 mbps (mega bits per second) broadband connectivity to every home apart from regular power supply. State-owned Mahanagar Telephone Nigam (MTNL) is all set to lay the fibre optic cable. However, this project is yet to excite private telecom operators. "Let it happen, we will then react," was the common refrain from both Bharti Airtel and Reliance Communications.Daryaganj could lay the rules for building broadband infrastructure in the country. So, next time the government promises — like it will on this Independence Day — to give high speed broadband through the landline, don't dismiss it as yet another speech. Despite the abysmal record of fixed broadband subscribers — less than 13 million as opposed to 850 million mobile subscribers — the government is optimistic and hopeful that fixed line will boom and in turn lead to an increase in the broadband base. To achieve this, the communications ministry has cleared a proposal to extend the optic fibre backbone to the villages. The Department of Telecommunications (DoT) has invited private operators to use the infrastructure to provide connectivity and applications. DoT will seek recommendations from the Telecom Regulatory Authority of India (TRAI) to fix tariffs.As part of this programme, Sibal has recently announced that India will have a National Optical Fiber Network (NOFN). This Rs 20,000-crore network aims to provide quality Internet service to rural areas. The government is hoping that this infrastructure will be used by the Internet service providers (ISPs) to offer high speed connectivity in the rural areas. The project would be funded from the Rs 17,000 crore estimated to be lying with the Universal Service Obligation (USO) Fund. This project is crucial for future growth of broadband. According to Trai, broadband growth has happened largely in urban areas. Over 60 per cent of India's broadband subscribers are in the top 10 cities. Only 5 per cent of broadband connections are in rural areas, which is meagre compared to the 31 per cent rural mobile telephone connectivity in the country.To expand broadband services in rural areas, the USO Administrator has floated a tender for private operators to offer broadband services. The tender stipulates that only those ISPs will be allowed to bid in the tender who have spectrum available with them (3G and BWA). This effectively will ensure that only existing licencees with spectrum will be in a position to provide services. The level of broadband penetration in India is abysmally low — less than 1 per cent. In contrast, in the US it is 26.34 per cent, the UK 31.38 per cent, China 9.42 per cent and in Korea 36.63 per cent. Broadband is still a cliché in India. Two national policies (2004 and 2007) with specific targets for broadband growth, failed to deliver the speed or quality of broadband services. Worst, the government and the regulator failed to comprehend the speed of broadband and called 256 kilo bits per second as broadband. It was later hiked to 512 kbps. It was only in 2010 that the definition was changed to 2 mbps, but this is still only on paper.This time round, the government has approached Sam Pitroda, advisor to the Prime Minister (Public Information Infrastructure and Innovation) to help improve broadband connectivity. Pitroda has been given the task to draw the road map to push broadband penetration in the country. Can he recreate the magic that saw the boom of PCOs in the country? "Offering access is of prime importance," says Pitroda. He also emphasises the need for building a broadband infrastructure for the next 25-30 years.It is not that there is no opportunity in broadband connectivity. According to a report by the Confederation of Indian Industry (CII), the demand-side opportunities indicate an ambitious target of 214 million broadband connections by 2014 — a 30-fold increase from the current level. This translates to 695 million connected Indians by 2014, allowing an equitable and inclusive growth in both urban (386 million users) and rural (309 million users) areas in India. Click here to view telecom and broadband graphicbreak-page-breakBut can the Indian government do what Finland did — it declared 1 mbps Internet connectivity a legal right in 2009? Growing broadband connectivity is important for the future growth of the economy. According to the World Bank a 10 per cent increase in broadband penetration increases GDP of a developing country by 1.38 per cent.That could be critical in the 12th Plan (2012-17). The emphasis of the government during the Plan period will be on ‘innovation, inclusion and investment' for broadband. That is unlikely to happen unless past mistakes of the government to push broadband are not corrected.One, the government should have ensured that fixed line services were attractive for private operators to invest in. This would have ensured that broadband services were provided quickly and at a lower cost .Two, the basic infrastructure, similar to what SRDC is building in Daryaganj today should have been offered to telecom operators rolling out fixedline services. Instead the government and the regulator continued to be mere spectators as the demand for fixedlines fell. Wireless has its benefits — it works well for those on the move. The payout for spectrum (approximately Rs 1,00,000 crore) has left mobile telecom operators with no option but to offer services at high cost to the consumers. The government unleashed two competing wireless technologies — 3G and BWA. Operators will be forced to invest in 3G as a natural progression from 2G investments. "But 3G is going to be a challenge," says a senior analyst with a Gurgaon-based leading telecom analysts firm. Even Long Term Evolution (LTE) and high speed wireless of 100 mbps is only speculative as on date. So, a combination of high investment requirement and lack of liquidity in the market, combined with technology paradox of government, has not helped growth of wireless broadband either. "It is a fall back time on fibre optic and fixed line phones," says D.P.S. Seth, former Telecom Commission member and the first chairman of BSNL. An independent analyst advising the government on broadband says that any backbone built by the government will act as a disincentive for further investment by private operators. The government should work towards building the last mile, both in the rural and urban areas, an area private operators have neglected. If the Indian government can create market potential for fixedline broadband provided it can create a market for it quite on the lines of mobile connectivity. "Revenues will get ploughed back to wire line broadband, create the market," says Seth.It is, therefore, natural that a lot of countries are concerned about creating a robust broadband infrastructure that would sustain high growth of broadband services. In addition to building the infrastructure, the government and the private sector will also have to lower the cost of the device and services — a major inhibiting factor in the adoption of broadband in the country. "In the 21st century, affordable broadband access to the Internet is becoming as important to the social and economic development as networks like transport, water and power," says Dr Hamadoun Touré, ITU Secretary-General.India has come a long way from the 56 kbps Internet connection in 1990s to a 2 mbps connection today. But the quality of service and reach still remains a challenge. The government's efforts will have to be supported by the private sector. Successful voice telephony in the country has transformed the lives of many and has had a positive effect on the country's economic growth. The challenge is to replicate that success in broadband. In the National Telecom Policy, 2011, the union government is likely to make available broadband on demand by 2015 and nurture an ecosystem to achieve 175 million broadband subscribers by 2016. The country needs both wireless and wire line telecom infrastructure to reap the benefits of broadband. A clear policy, an effective execution and an attractive market are necessary for broadband to be successful in India.Click here to view telecom and broadband graphicm(dot)rajendran(at)abp(dot)in(This story was published in Businessworld Issue Dated 22-08-2011)
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Not too many years ago, businesses relied heavily on various media platforms for advertising and communicating with their customers. This required investments in terms of both, time and money with no visible results or data to support the success of their customer outreach campaigns. Customers themselves had to go through cumbersome communication channels to register their complaints and feedback. But this was then.Today, social media platforms — having caught the imagination of young and old alike — are equally popular amongst businesses of all sizes. Networks like Facebook, Twitter and the blogosphere reach millions of people every day, making them a valuable tool for organizations all over the world. Most small business owners probably never expected that technology would come to the forefront of their business lives and possibly converge. However, small businesses have come to find that social networking can provide a genuine competitive edge. Social networking helps business owners identify and forge deeper ties with customers and business partners. SMBs have found social media as a convenient, effective and virtually cost free platform to reach their target customer base and simultaneously interact with them to receive feedback/complaints or just to simply connect.Social media brings in benefits for both customers and businesses alike. The levels of customer engagement increases as businesses can quickly receive customer service ratings. Brand mentions on Twitter can provide better online visibility and also ensure greater brand awareness among media and analysts. It also plays a major role in customer acquisition and sales development. Some of the strategies adopted, include active blogging and maintaining dedicated pages aimed at product promotion. Daily updates and comments on the company's home page on Facebook, Twitter etc ensure that interaction with target customer base is regular and continuous.While the visible benefits are for all to see, they bring in newer challenges too. These platforms are also the favorite hunting ground for the cybercriminals who lurk everywhere on the internet prowling for sensitive information that can give them wins, but only spoils to the SMB. Social networks give users an implied sense of security, making them more inclined to click on links without thinking. Sometimes employees may fall for a cleverly orchestrated scam that seeks to deceptively obtain confidential business information. If they thus succeed, cybercriminals can easily access online accounts to steal personal information and content, including personal communication, documents, login credentials and even bank login credentials.However this does not mean that SMBs cannot tackle this threat. Employees can be educated to conduct social networking with care and caution. A few simple measures can ensure that SMBs can be immune to these threats and also effectively exploit the huge potential of social media. Check the social networking site's address and scrutinise a suspicious site's security certificate to ensure you are logging into legitimate websites and also look for "https" in the address. Think twice before entering your real birth date or other sensitive information on social networking sites. Any information however insignificant like the street number of your home, can prove to be dangerous in the hands of a cyber-crook. Periodic checks of your privacy settings is necessary, don't answer yes when prompted to save your password to a computer. Instead, rely on a strong password committed to memory or stored in a dependable password management program. Don't accept "friend" or "follower" requests from individual's you don't know. Don't click on links in messages, even if from a known "friend," that seems strange or out of character. Report any suspicious or potentially malicious activity to the social networking site's administrators. While social media is here to stay and its utility cannot be questioned or ignored, it's also important to raise the security aspects when it comes to the newer challenges this brings into a business network.By following the basic tips as mentioned above, a SMB user can be savvy about being secure while going onto any social networks.The author is, Managing Director, India & SAARC, Symantec
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In the United States, several members of Congress seized on the breach, in which hackers stole names, addresses and possibly credit card details from users of Sony's PlayStation Network, to push for tougher laws protecting personal information.The staff of a House of Representatives subcommittee were directed to investigate the hacking incident.Attorneys general, who act as consumer advocates, had begun investigating the matter or reviewing it with staff in several states, including in Iowa, Connecticut, Florida and Massachusetts, according to their offices.One US class-action lawyer said he was considering filing a lawsuit on behalf of consumers as soon as this week.In Britain, a government watchdog said it had already launched an investigation of the incident, which put credit card information at risk.Britain's Information Commissioner's Office said it had contacted the company and was investigating whether Sony violated laws that require it to safeguard personal information. The commissioner's investigation would depend in part on whether Sony stored user information in Britain.While the Japanese electronics company pulled the plug on the PlayStation network on April 19, it did not tell the public about the hackers' attack until Tuesday.The disclosure sparked immediate outrage among gamers and revived criticisms of Japan's corporate culture that plagued Toyota Motor during its huge automotive recall in 2010.A Sony spokesman has said that after learning of the breach it took "several days of forensic investigation" before the company knew consumers' data had been compromised.Sony said on Tuesday that hackers accessed personal details on 77 million users."This is a huge data breach and the clients who have called are really upset, not just because of the data breach but it looks like Sony sat on information for as much as five days," said Jay Edelson, an attorney at law firm Edelson McGuire.Edelson's firm specializes in class-action lawsuits over data breaches. He said he would decide in the next 24 hours whether to file a lawsuit.Sony did not immediately return a call on Wednesday seeking a comment.US ScrutinyThe incident could give momentum for tougher policies in the United States.US Representative Mary Bono Mack of California said she directed staff of the House subcommittee for commerce, manufacturing and trade, which she chairs, to begin investigating the matter to determine if hearings are needed.Representative Bobby Rush of Illinois said he would reintroduce legislation that would require companies to have reasonable security measures and Senator Tom Carper of Delaware said he hoped for a comprehensive cyber security bill this year.US regulators could get involved as well. The Federal Trade Commission has been known to pursue companies that failed to safeguard consumer data. It could investigate if it determines Sony failed to tell its customers about the company's privacy policies.A spokeswoman for the agency declined to comment.Sony reported the breach to the FBI's cybercrimes unit in San Diego, which is investigating, a person familiar with the probe told Reuters. The person was not authorized to discuss the matter publicly.Sony may come under the toughest scrutiny from non-US regulators, which have stricter consumer privacy laws."European countries are going to go crazy and be all over this," said Dan Burk, a professor at the University of California, Irvine School of Law. "They are absolutely obsessed about companies holding personal information."Burk said subscribers will need to show they suffered damages as a result of the hacking for a US lawsuit to have legs."If it was just hacking for fun, then it's going to be tough," he said.(Reuters)
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Sanjay Jaju, C&IT department, Andhra Pradesh government discusses the success of e-governance in AP and the first-ever e-cabinet model in the country
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Sanjay Jaju, C&IT department, Andhra Pradesh government discusses the success of e-governance in AP and the first-ever e-cabinet model in the country
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