Execution Plan for Malawi

CSD Course, Fall 2008. Open Case Team Presents. KTH, Stockholm.

This podcast is a practical plan for Open Source Networking Business Idea in Malawi.

1. ACKNOWLEDGEMENT
This document is outsourced by OSN team to a sub group, which is formed by three ICT
Entrepreneurship master students. We would like to convey our gratitude to the
following people who have helped us to prepare this document.
Professor Björn Perhson, for all the constructive advices and the tips that he gave us.
Anders Sjögren for his great project management skills and personality.
Finally and most importantly, Khizer Jalal, Lum Osmani and Santha Kumar for helping us
to prepare this document for the benefits of entrepreneurs to start up a company in
Malawi.

2. INTRODUCTION
Open source software is not only simple free software any longer, but it also caused to
force companies to find new business models for revenue generation. Open source
creates value and can get returns by the value it creates by providing different types of
services.
This report provides the business model for a proposed open source software company
in Malawi. It covers the product description and a short background of the company. It
goes on to suggest different services that the company could use in order to make
money on the product it offers.
It is important that every business proposition must have a clearly defined Business
Model to support it. As Henry Chesbrough tells us in his book “Open Innovations1 ”, the
business model is the blue print of how a company turns the latent value in technology
into a solution for which the customer may be willing to pay thus generating revenues
for the company. It should cover the following aspects:
 Articulation of the Value proposition of whatever product or service the firm is
providing.
 Identification of the market segment that the firm is targeting.
 Definition of the structure of the firm’s value chain.
 Specification of the revenue generation mechanism.
 Describe the firm’s position within the value chain.
 Formulation of the competitive strategy.
In this document we lay out a business model for a company that is going to provide
Open Source based routing solution Bifrost/OSiAN, including the complementary
services, in Malawi.
Also, we prepared a document to convince policy makers about the benefits of open
source products for developing countries. This document can be found at Appendix A.
3. PRODUCTS
Proposed company will be an open source software company, specialized in open
source routing software. Specifically, the product is called Bifrost/OSiAN; an open
source pc based networking system. The software is free to download and open to
further development and modifications.

4. SERVICES
For a company providing open source solutions, the revenue sources tend to become
scarcer. Hence, the major source of revenue for the company comes mainly from the
services it provides. To this extend, proposed company in the attempt of generating
high revenue with its product in Malawi, provides the following services:
4.1 TRAINING
Training can be categorized into two main levels: basic and advanced training.
Furthermore, both training versions will be provided online and on-sight. This service is
targeted not only to system administrators and IT students, but also to any employee
(member) of any of the organizations that uses the product. The basic training, as the
name implies, is targeted to beginners and trainees with little networking knowledge.
The advanced training is targeted to experienced or professional networking users.
The online training can be accessed from the company’s website, where the trainees
interact with one of the appointed instructors who leads the training. On the other
hand, the on-sight training is a type of service where the company’s instructors go
directly to the customers’ premises to provide training.
4.2 CONSULTANCY
Company will offer professional consulting services to its customers. This type of service
works by connecting the customers with the technical resources of the company. Such
services include: network migration planning, implementation planning, network
architecture and design, interoperability testing and network integration.

4.3 TECHNICAL SUPPORT
Company will also offer subscription based technical support. In addition, this service
will be provided online and over the phone. One of the most important aspects of our
whole product concept is technical support. Since African community has some
difficulties to understand and use the open source, technical support becomes crucial to
make the customers happy.

5. FOCUSED MARKET SEGMENT ANALYSIS
Despite many problems, Malawi’s population is growing fast, and the long years of
colonial oppression and oppression by the Banda regime have ended. A population
hungry for basic education is finally receiving it since primary education is for the first
time free and compulsory. Most of the students and other individuals are more positive
towards studying in higher schools and universities and getting to know about the latest
research methodologies.
So we as being the presenter of an open source solution, we have a good chance for
growth. We just need to be very specific and put proper emphasis on our target market
so that we can market and promote our product and services efficiently. Of course we
need to put some money for the proper marketing of the product and services. In our
scenario the primary focus is to bring know how of the product in the market of Malawi

so that people there know how the technology actually works. As this is quite a new
technology offering for them, some of the schools and companies there might be afraid
of using our proposed solution as they might think that it’s not reliable or the price of
the solution will not justify it. So we have to eliminate the fear of using the product in
the individuals of Malawi by using certain promotional schemes such as seminars, fairs
where we not only position our product but also advertise our product in the market.
It is also important to decide what space is the company occupying? To understand this,
please refer to the graph 2 below.

5.1 MARKET SEGMENTS
As far as we have researched about the market of Malawi most of the institutes and
organizations there stand in middle class or some of them in middle upper class.
Advance institutes that provide post primary level education have been emerging since
most if the individuals there are now more focused towards acquiring higher education.
Another good trend there in Malawi that has been started there for a couple of years is
the universities providing free education to the students. More often such universities
are funded by external aid programs. So in Malawi we have a list of universities whom
we can consider as prime business customers. Other then the universities and
educational institutes we have well established companies there as well including air

freight services company, air craft manufacturing companies, art galleries companies,
audio video advertising companies as well.
5.2 FOCUSED CUSTOMERS
First of all, we looked at to Secondary Schools in Malawi. The list of secondary schools
with their postal addresses can be retrieved from reference 1. Also, addresses can be
seen at attachment 1 as a pdf file, in case you do not have an internet connection.
Universities in Malawi: The main universities in Malawi are
University of Malawi
Mazuzu university
Universities of livingstonia
Kamzuzu college (Kamuzu College of Nursing)
Malawi polytechnical institute
banks in Malawi:
standard bank.
Nat bank
Banknet
Possible business customers in Malawi:
The Malawi stock exchange
British council
Insurance Company
iFad

Possible business partners in Malawi:
Epsilon & Omega Ltd
Malawi Net

Globe Internet
Foris Telecom Limited (FTM)

6. MARKETING AND PROMOTIONAL STRATEGIES
We have integrated the marketing and promotional campaigns and schemes in our
venture start-up expenses, as before actually selling our solution we need to market and
promote our product in market. The total approximate estimated price for marketing
and promotional strategies after hours of brainstorming is set as 7500 USD.
For further justification of our proposed budget for marketing and promotion of our
open source network solution we have tried to allocate budget in financial sections.
Advertisements in Universities and Colleges:
By publishing our product in the universities we will not be helpful in offering a better
product but also help the students studying there to provide more innovation in
information communication technology. We will advertise our product by the help of
colorful handy brochures, posting advertisement charts on universities notice boards.
E-Advertisements:
When doing the market research we have come across a lot of websites of Malawi
where we can place our product and services banners or redirectors to our website. The
cost varies from site to site. But, right now the most important is not the eadvertisement,
so we can focus some other methods.
Advertisements on radio and Television:people in Malawi have radio for the entertainment. We successful we can publish our
product by broadcasting our services Advertisements over radio and televisions. This is
the cheapest and most effective method of all there in Malawi. But, the question is, how
beneficial is this method for a small start up? To ensure that we are earning a lot from
this type of activities, we must be sure that society start to understand the benefits of
open source and importance of these services for a developing country.
Exhibitions and Stalls:
This is rather an expensive methodology for the advertisement, but for the case of
Malawi seems to be quite beneficent and profitable for us as we can attract a large
number of community by this methodology.
Arranging Presentation and meetings with Banks and Businesses:
This is a cost effective and efficient model for marketing our open source networking
solution product. We may need to recruit technical sales guys or technical consultants
from Malawi as they have their own language for communication. The cost for this
varies and we need further research to calculate cost for the marketing team.

7. BUSINESS MODEL
In our Business model for selling this Bifrost/OSiAN Open Source product in Malawi,
we mainly found 4 ways of making money.
Providing Training:
Basic Level Training sessions will be held for those who have basic IT skills. The trained
persons will become eligible for certification exams and also for the advanced level
training. This not only fetches money, but it also develops the potential users whom we
can use for expanding our business.
Consultancy Services:
Consultancy Services right from network design and implementation till system
administration of companies will be provided.
Technical Support:
Technical support for the companies who needs help for installation, maintenance and
upgrades will be given for a yearly subscription.
Franchise:
Franchises can be sold in smaller cities for the persons whom we have trained.
Advanced training can be given to them in subsidized rates and consultancy support can
be given to them. The franchise will be sold at an initial cost and the profit will be shared. Brand image has to be established initially for selling franchises, even though it increases our marketing cost initially it will help us in expanding to new markets.

APPENDIX A
Benefits of using Open Source products and solutions
Low cost
As we all know, Open Source products and/or solutions are more cost effective than
their proprietary counterparts. Even though one has to pay for the complementary
services around the core Open Source products, the total cost of ownership turns out to
be much lower than that of comparable proprietary solutions.
Flexibility
Open Source products by their nature are more flexible in the sense that any user who
has the knowledge can always modify and enhance the product as per his or her specific
requirements. This is something that is difficult (and sometimes impossible) to do with
proprietary products. For a given business it is important to not be tied to a specific
provider and to avoid an excessive dependence, keeping the freedom to choose an
alternative later on as the business experience changes.
Scalability
In many cases, the user would want to start with the basic product at the beginning but
scale up at a later stage. With proprietary solutions, this can be achieved but it is usually
done at a high cost due to the extra equipment that one is required to procure in order
to be able to scale up. On the other hand Open Source solutions allow the user to scale
up as his or her needs change without having to purchase the extra equipment.
Knowledge sharing
Through using Open Source solutions and participating in activities such as developing,
enhancing and modification of these solutions, communities of knowledgeable people
are produced and this is not only beneficial to the individuals themselves but to the
society as a whole. Open Source solutions encourage collaborative working and
knowledge sharing all over the world.
Creation of businesses and jobs
The use of Open Source products enables people to create businesses that offer various
services around these products thereby creating jobs for the communities. The services
may include training and other consultancies.

Bridging the digital divide
Because of their relatively low cost as compared to proprietary solutions, Open Source
solutions could be the answer to the “Digital Divide” syndrome that is affecting the
world today, in which those who don’t have access to the amenities of the Information
Society are left behind and their chances of ever catching up are being reduced by the
day that passes.
Conclusion
As we can see, Open Source can be beneficial to developing countries in several
different ways. First of all, it provides low cost but effective solutions to some difficult
problems. Communities can achieve what is needed without having to invest large sums
of the so much needed money. Secondly, through using these Open Source solutions,
these countries will be able to provide their people with the necessary access to
information that is crucial for social and economic development and at the same time
produce teams of people that are competent and knowledgeable in various fields of
Information Technology. They will become in turn not only consumers but also
providers of technology.

CSD Course, Fall 2008. Open Case Team Thanks. KTH, Stockholm