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• Infobird Construct China’s First Governmental Cloud Computing Platform
• Flying Bird above Clouds

Flying Bird above Clouds

BEIJING, Aug. 31, 2009 / 21st Century Business Herald/ --In 2001, Wu Yimin did not know SaaS (Software as a Service), nor heard of Cloud Computing.

But at that time, Infofird, company he has founded for 4 years, was encountering a problem. Infobird’s original business is providing software and equipment to help enterprises construct their own Call Center. Its early clients include Elong, China Life Insurance [25.10 -5.57%], Shanxi Unicom, etc.

But, gradually, he found that this is the Red Sea, “on the one hand, big clients are complex, especially long sales cycle probably with one year or two, even three years to sign a sales contract; on the other hand, demand is not much, for example, Four Bank, there are certain several enterprises”. What was worse, the competition was very intense, including rivals like AVAYA, Lucent, Huawei, etc. They all provided similar products and services. And it is difficult for Infobird to take an advantage of these powerful large competitors.

But that year, the turning point came quietly.

Infobird served a big customer: Alibaba [19.02 -2.56%]. Alibaba already had the requirement of 6000 agents. Wu Yimin was shocked by Alibaba's huge business. But what was even more shocking that Alibaba’s customers are hundreds of thousands of SMEs. Some of them even did not have their own websites.

In fact, it is not like the SME has no call center demand, especially when call center develops from predefined cost center into proactive marketing profit center.

But at that time, if Infobird, a software vendor, did business with SME, it means more sales only more losses. “What they need is a highly cost effective product with low price. Even if the relatively low drop in prices of equipment and the simplification of software, the service cost is very high. SMEs are located throughout the country, and even in a small county. If SME spent several hundred thousand RMB to buy our equipment and software, the travel charge of our engineers to install and debug is really high, and the following caused maintenance cost is even much higher.”

Wu Yimin worked out it was defective, but such a “long tail” market was too tempting.

Skype, popular since 2004, gave him inspiration. “At that time, there are international standards for the communications industry, but the Skype has a private agreement, then it is also acceptable to run call center on the Internet through an adoption of such a private agreement.”

As a result, after more than 2 years hard working, Infobird launched Qitongbao—SaaS Call Center Software by the end of 2007. Customers do not need to install software packages or buy hardware, or self-built call center. They just need to buy SERVICES from Infobird according to their own acquired agents and time.

It is paid monthly by use, so customer does not need to buy software/hardware or install/debug, then the cost is much lower than before.

While to Infobird, “sharing” has become profitable “secret”. A change in words can be said to be “scale effect.”

For a single enterprise, the device is not always used. Utilization rate of its switches and software is likely less than 10%. And because of different business types, enterprises’ call center time can actually be divided into segments with peak and trough.

Certainly, “scale effect” is on the premise that there are lots of enterprises using the service. Infobird SaaS Service has been used by over 1000 enterprises. Its entire platform can reach about 50% utilization rate. This means that the same benefits cost only 1/5 of the original. However, to guarantee stable service, the real-time monitoring utilization rate is above 70%, Infobird will make expansion, plus ports, and connect media gateways and servers.

Now, with over 60 million annual income, Infobird SaaS income has taken up 1/3, and SaaS revenue is at 100% rate of growth each quarter. The software services business has extended out from call center, ranging from call management to customer management and business process management. It is definitely a light spot during the tough periods.

Ray Wang, an analyst of U.S. research institutions ForrESter Research, said “SaaS has elements of anti-recession.” These “anti-recession” elements have also been shown by Salesforce’s (originator of SaaS) excellent annual and quarterly reports. In 2008, Salesforce has become the first SaaS Company earning more than 1 billion. And in the 2nd quarter in 2009, it earns 316 million, up 20% on last year’s same period.

But to do SaaS business, it is not a small initial investment, including hardware, IT infrastructure and software development, etc.

When Benioff founded Salesforce, he herself invested 6 million U.S. dollars, and Oracle's Ellison invested 2 million U.S. dollars, and gained 26 million form individual investors. Its venture capital would amount to 34 million U.S. dollars.

In early 2008, Infobird received investment from the German venture capital AGPF-I of approximately 10 million U.S. dollars. At that time, Infobird had spent tens of millions in developing Qitongbao, equipment, bandwidth, etc.

In China, Youshang.com has the support of Kingdee, and wecco.com with UFSOFT’s. Even 800APP, replica of Salesforce also won 17 million Dollars investment from Sierra Ventures.

Today, Wu Yimin said he's solutions of call center and business management have entered the “cloud time”. But when it comes to SMEs, “such brilliant concept may not be that practical, you just need to tell them the values and how to use these values.”

Cloud computing, for Wu Yimin (an intelligent technicist who graduated from School of Software Research in Tsinghua, and then was in Computer Science Department of Tsinghua University to teach, and also worked in the U.S. Hewlett-Packard for several years), in fact is not so incredible. It just uses technology to change the way of doing business.