Sendmail Uses Direct Mail to Convert Freeware Users to Commercial Software

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Sendmail Inc., Emeryville, CA, a software company that was formed in December to sell a support program for a popular free e-mail application, is using a direct mail campaign to persuade companies that they should now pay for maintenance and support of the freeware technology.


Sendmail software uses an Open Source code that was made available by its author, Eric Allman, at no charge via the Internet. A network of programmers at various locations around the country -- the so-called Open Source community -- have made modifications and offered free technical support to users on a sporadic basis.


The company, which Allman formed with a partner, estimates that between 70 percent and 80 percent of the e-mail messages that pass through the Internet use the Sendmail code. Many of the companies that are using the software, however, might not have the technological know-how to diagnose problems with it or understand all its capabilities, according to Sendmail Inc.


Now the company is seeking to identify those users and convince them to buy Sendmail Pro or its Windows version, Sendmail for NT, which offer enhancements to the original Sendmail software and include service and support from Sendmail Inc.


"We have a very interesting challenge in terms of mailing out to the people who have the freeware version and finding that subset that would prefer to have the commercial product," said Richard Guth, vice president of marketing at Sendmail Inc.


Although there are an estimated 1.5 million users of Sendmail worldwide, there are no records of who is using it because downloads of the software has not been tracked.


"That's one of the challenges, is finding out who are those 1.5 million," said Guth. "We know how many people have downloaded off the freeware site, but we don't know their names. Direct mail is one of the ways we hope to find them.


"Even if we had the names, it would be inappropriate for us to use them," he added. "We want to respect the freeware community and don't want to use that kind of data from them."


Paul Pedrazas, president of Response Associates, San Francisco, which is handling the direct mail campaign, said the strategy in the first wave of the campaign is to target the system administrators at the nation's several thousand Internet service providers, most of whom use Sendmail to carry their clients' e-mail messages through cyberspace.


"I think we're making those people feel like they are very important people who have early on realized the value of this product, and we are contacting them to let them be the first to know about the commercial version of this product," he said. "We don't want to offend the Open Source community in any way because they are very important participants to our clients. It became a very sensitive issue."


The mailing includes messages about the support and services that are now available and the new features the commercial version of the software comes with.


The first mailing of 6,500 pieces was scheduled to drop last week, to be followed by a drop of 85,000 pieces in the second quarter.


The list for the first drop was culled from companies that had registered to obtain more information about Sendmail support at the Sendmail Web site or at trade shows in addition to Internet service providers.


The second, larger mailing will use publication subscription lists to prospect for Sendmail users. The second mailing also will include about four different versions to compare the effectiveness of different approaches and to test the response of system administrators vs. information-technology directors.


"That way we can start to understand what the business niche of the product is as well as the economic niche," Guth said.


Sendmail has an eight-person phone force to handle inbound calls from the initial wave of the campaign. The mailing also directs recipients to the Sendmail Inc. Web site, where they can order the product.


For the second and subsequent mailings, the company has contracted with Tactical Telemarketing Solutions, San Francisco, to handle inbound calls.


Sendmail is pitching one year of free service and support in the direct mail piece as an incentive to purchase the software package, which costs a minimum of $1,298. About 300 companies have purchased the product since it became available in December, Guth said.


"The primary reason people wanted us to start this company was that they wanted service and support," he said.


Pedrazas said he expected other companies offering commercialized support for freeware to emerge and market their products as well. Recently, for example, several companies have emerged to provide paid support for Linux, a free operating-system program that some see as a potential rival to software behemoth Microsoft.


The basic code for both Linux and Sendmail continue to be available for free from the Internet.
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