Subscription-Based Software Trend Rises

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Larry Ellison, chairman/CEO of Oracle Corp., Redwood Shores, CA, has a new software venture that capitalizes on the client-server workings of the Web. His new company, NetLedger (www.netledger.com), is offering accounting software that is delivered as a monthly subscription-based service via the Web.


Promoting the theme of "Now you can concentrate on running your business," NetLedger delivers accounting software that runs within the cross-platform environment of a browser.


Think about it - upgraded mailings, software installations and compatibility issues are virtually removed with this new type of model. In addition, the software will accommodate as many users as you can give it - and they can be anywhere in the world. No internal networks, no internal storage or security issues.


Behind the scenes, on the server side, is the proven Oracle 8 database engine, which acts as a warehouse for the cyber data. Tasks such as back-up management and data security are taken care of on the server side, divorcing the user from the headaches typically associated with those activities. Starting at $5 a month, it's a phenomenal, turnkey solution and it's a great direct marketing/interactive opportunity.


Bill Mirbach, president/CEO of NetLedger, Menlo Park, CA, is a former Procter and Gamble brand manager (He happened to work under DMA president H. Robert Wientzen in those days). Mirbach also has a long history in the direct marketing of accounting software, publishing and the software upgrade arena. Mirbach literally wrote the book on software upgrades, so it's ironic that he would be the person to do away with the need for the upgrade.


Mirbach views the subscription-based software as "the next quantum leap in how we use and deploy software technologies." It enhances the capability to deliver solutions that maintain the users' focus on running the business instead of running the software, he says.


On a personal note, many of us who worked with him on countless direct marketing campaigns for a variety of software organizations will miss him now that he's on the client side. However, I'm fascinated by the direct marketing opportunities that his new company will open to all of us.


While the above example depicts an application in the business-to-business and SOHO markets, there are new applications in the home. How about a software subscription that is geared toward educating your child and dynamically changes contents as your child gets older and/or his skill levels increase? And as the scripting languages, browser extensions (i.e. Macromedia's Flash) and Java virtual machines become even more standardized, the good news for users is an even more robust, client-side platform.


As we near 2000, who would have thought that the browser would be the next "application of applications?" With the growth of subscription-based software, it just might be. And as marketers, the software community may be viewing their house file as subscribers instead of product buyers.


Software publishers have always been regarded as an innovative group of marketers. Deploying sales programs such as crossgrades, sidegrades, competitive upgrades, shareware and freeware, they have pioneered and developed many different ways for distributing their products. Subscription-based software is made possible because of the wide acceptance of the Web.


The Web is, without doubt, the greatest example of a client-server application. On the client side is the Web browser, such as Netscape's Navigator or Microsoft's Internet Explorer, which is used to initiate and carry on a digital conversation with a host system (the server). Basically, the browser requests specific Web pages to be transmitted by the server, which it then interprets and displays to the user.


The bottom line is that with today's technology, a software publisher can deliver highly robust applications in a client-server environment.


A software publisher's upgrade efforts in many ways parallel the subscription efforts of a magazine publisher, with the purchase of the upgrade itself as being similar to the one-year renewal. What is happening now in the software arena is that the client-server infrastructure of the Web is allowing software publishers to truly break out of the box.


While the PC, its hard drive and network connections may be in jeopardy, direct marketing looks brighter than ever in the ever- changing world of hi-tech marketing.
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