Taking its idea of subscription-based software to foreign shores, local start-up WebTec has signed Genesis Systems International (GSI), a North American distributor, to market software solutions that its customers can subscribe to over any length of time.
WebTec CEO Paul Dinsmore explains that WebTec`s offering consists of a secure shell (or software "wrapper") around another software vendor`s product, necessitating subscription for time-based access.
He says it will find increasing favour with software vendor-entrants that need a channel-leveraged route to market but find retail too expensive. It will also attract service providers who act as vendor channels to market and customers who demand flexibility, he says.
The flexibility Dinsmore mentions is key in addressing customer concerns with licences. "For instance, if one downsizes, what happens to the volume licensing agreement when suddenly there are far fewer seats, specifically until the time one negotiates renewal?" asks Dinsmore.
"What if I want to move to another product altogether, but am locked into an agreement?"
Moreover, he says, the price points are attractive, with the security bundle being distributed in the US going for a small monthly sum. The bundle includes a personal firewall, image filtering, content filtering, anti-virus software and an application management tool.
Calling on vendors
WebTec`s current vendor partners include Kaspersky Labs, Sophos, Trend Micro and Panda. "Larger vendors like Symantec will be a tough sell," he admits. "They`ll be loath to cannibalise their existing retail channels for a much lower annuity income. One local customer has been ICL, offering a security bundle through its ISP, Eject."
Dinsmore expects more than 90% of sales to come from offshore markets like the US, and predicts R40 million in sales in the first year (excluding US figures) with what he believes is a world first.
He says subscription can be arranged over any period of time, a model that suits customers with ad hoc projects needing project management software or infrastructure, for example. However, not only software tools and applications can be sold in this way. Dinsmore adds that distributors of digital assets like games and music have also shown interest in this model.
Subscription is different from the ailing application software provision proposition, as applications and assets are located on the desktop or company server, and does not involve a bandwidth-intensive usage over a telco link or private VPN to a service provider.
Mutual benefit
"GSI regards this as a technology with significant market opportunities," says Frank Elge, GSI`s VP of sales and marketing. "For effective distribution in this market, GSI has further appointed a range of resellers that, to date, include several ISPs and system integrators throughout North America."
Elge says GSI believes WebTec "will be a serious force in bringing about a major paradigm shift in the distribution of software. They [WebTec] have not only stolen a march on extremely large competitors, but have clearly set the model and pace for other companies (both large and small) to follow."
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