Selling Software In The Internet Age

Not so long ago, the primary
tools for any business opera-
tion were limited to a typewriter and a calculator. Today, these now primitive
devices have been replaced with computers and their universal appeal. From homes
to large organisations and for a range of tasks, computers specifically and
computing power in general, have provided us with answers to many of our
time-consuming and unwieldy tasks.

From the days when there was no market for genuine software
in existence, to a time when piracy levels are down to 60 percent, much has
changed. Another hallmark of this era of change has been the increasing
competition between MNCs and local OEMs and system builders.

And if these factors weren’t enough to create a sea change
in the way software is sold, the Indian customer has been increasingly exposed
to international developments, more aware and articulate of his needs and
demanding in terms of service and support.

Last year, PC shipments crossed the one million mark, taking
the total installed base across the country to over five million PCs. This
number will only increase each year, and while we are still a long way away from
countries that ship in excess of three million PCs a year, the future looks

The traditional distribution channel itself has undergone a
major change. Companies like Microsoft, Compaq and Intel and many others have
worked to establish a network of partners across the country to ensure easy
availability of world-class products. Channel members today are up to date with
the latest trends and technologies, and are empowered to help their customers
make informed purchase decisions.

Drivers of the PC market

Today, we see PC and software sales being driven sharply by
three key sectors-the home market, small and medium business, and the emerging
plethora of e-enabled enterprises. Each of these segments has its own unique set
of driving factors but the common denominator is the Internet and the role it is
playing is redefining boundaries of traditional computing. So how will the
Internet affect companies in the industry?

Nicholas Negro Ponte, MIT guru, in his book ‘Being Digital’,
describes the world as consisting of atoms and bits. Atoms are the physical
goods that can be bought and sold over the Internet yet require physical
delivery. Bits on the other hand, like software, can be bought, sold, delivered
and even used over the Net.

In this new scheme of things

In this new scheme of things, it is but natural to re-look at
the way we have been doing business and gear up to the New Economy. There are
many examples of how emerging technologies have taken advantage in changing the
paradigms of doing business in today’s market.

Application service providers are one such segment that is focused on
providing users across the world with

software applications on rent through the Internet – or
"apps on tap". Companies like Dell and Cisco have increased their
competitiveness and thus revenues by selling their products online, and have a
significant percentage of business to be generated through this mode of

There is no doubt that the advantages and opportunities that
the Internet Age offers are tremendous. The Internet helps even out and level
the global playing field, and hence it is not just the size of the vendor that
will drive customers online. Small companies have just as much of a chance to
devise web strategies that will help them deliver value to their customers.

So how will the Internet help your business and stay on top
of the competitiveness curve… here are a few ways that come to mind:

Lower cost of doing business:

Imagine you wanted to reach each present and potential
customer directly. Think of the phenomenal cost of an advertisement or direct
mailers. Compare that to the cost of sending out an email with a link to your
web site address. Not only will you save yourself a huge expense, you can also
decide what information you want your customers to have – product and pricing
lists, buyers guides, promotions and discounts, customer suggestions and
feedback, contacts of satisfied customers, there is no end.

Access anytime, anywhere:

Instead of having to wait for 9 AM on Monday morning, it
would be ideal if the customer could get online and either post a mail for
immediate assistance, or chat with a technical assistant to rectify the problem
immediately. And this is possible today. Web sites offer 24×7 customer
interaction, either in terms of Frequently Asked Questions, chat rooms, links to
support sites or white papers, minimising downtime and winning customers for
life by making the additional effort.

Going beyond traditional geographical boundaries:

If you are a system builder in Nehru Place in New Delhi,
offering great deals to your local customers, there is no reason for you not to
extend that service, to the rest of Delhi, surrounding towns, and maybe even
neighbouring regions. And with no additional investment in infrastructure, as
long as you have your distribution mechanism in place.

Tying your partners in:

Struggling with high inventory costs? Stock out situations?
Obsolescence? A business-to-business model on the Internet can help you get your
partners and suppliers online to minimise these and other irritants. An added
advantage is the ability to provide customisable configurations online, a model
followed successfully by PC giant Dell.

From experience, any businessman will tell you that it takes more money to
get a new customer than to retain an existing one. With competition growing,
only the companies that actually look at customer satisfaction seriously will
succeed in the long term. The Internet is the simple way to maximise this, in
the shortest possible timeframes, and can only add value to your business, and
pass this added value down to your customers. In the end, new economy or old,
the customer is still the king

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