Know-How Exchange : E-Marketing

I've been involved with this many times . . . the good news is that more and more the acceptance level for hosted applications is growing on the part of the marketplaces. Revenues comes in smaller chunks you're right.

They should be prepared for a bigger hit than what you describe. There will be issues of dual-platform support maintenance contracts and so on.

The key issue for you to deal with is their motivation in making the change. If they were having sales problems and looked to this change as a way of reinvigorating sales . . . they may be in for a bumpy ride. If, on the other hand, the market is clearly moving in that direction they should be in better shape--depending on how early they are in making the move compared to the competition.

Generally, the marketplace changes (don't know what the product is beyond general BPO) too . . . once you move from installed to hosted software you begin to minimize the role of IT (except, of course, as obstructionist to the sales process) so they will need to modify their approach and message as well--if that proves to be the case.

The best ASP products are those that involve low consultative sales--approaching an order taking kind of thing -- salesforce.com being a good model. I hope this product lends itself to that.

Finally, you may discover you're dealing with smaller companies which adds its own burden.

But lots of companies are doing it, and doing it successfully. It's a rethinking of strategy, a revision of the sales message and materials, and a more aggressive outreach for generating leads.

Hope this helps

It's difficult to try to be precise. Here are a few more generic questions.

Please describe the form of application delivery.

For instance, is the software being delivered or used through the Internet in an ASP model?

Do you have a good grip on who the heavy users are? Have you profiled them and know ways to deliver messaging to them?

Do you have a huge universe of medium to light volume users? Do you know who they are and how to market to them?

Is there some reason to believe that any existing users have a reason or motivation to move to the incremental revenue model? Is the app being delivered via subscription a heavily upgraded version for instance?

Will you offer licensees any incentive at all to switch, or to add on the subscription version rather than paying upgrades for additional seats of software (assuming this is how you sold it before)?

Do you have an in-house sales force to help drive the conversion?

Is there enough cash in the till to fund a marketing program of any size?

Is your current software well known, or an industry standard, or in any other way well branded and positioned?

Have you been profitable on license sales?

Do you have direct competitors selling automation of the same business process? If yes, in terms of company size in # of customers, or revenue, or market share; where does your company stack up against them?

This transition is going to hurt. It's likely to take longer than anyone thinks. Patience will be called for. Have you been given realistic revenue targets for a reasonable time period?

Has there been any formal research, study, surveys, or other information that indicates this is a viable move - meaning, will likely prospects be interested?

And finally, is this change in business model being driven by flagging license sales? Competitive pressure? Or is it seen as a market leadership move?

There's likely to be more questions from others... but these will get us started.