Beyond Collaboration: Goes After

CRN: What exactly is

FAULK: With 9,000 active customers and 250,000 paying subscribers, we are the largest collaboration service on the Web right now. As a hosted service, the sweet spot of our market is small- to medium-size businesses, but we also have a lot of larger business customers.

The major pain point we address is the ability to easily share documents, calendars, databases and all other type of critical business information over the Web. The alternative solution is when people go out and build this from scratch. That obviously takes months to do. Our solution can be set up in five minutes and deployed within a few minutes. You can deploy the solution for probably less than 10 percent of the cost of a do-it-yourself solution.

CRN: What are your goals for 2005?

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FAULK: Our vision, which we'll be rolling out in pieces this year, is to become the world leader in providing on-demand business services to small- and medium-size businesses. We will be add- ing a number of other on-demand services, focused primarily on the small and medium-size business market. Right now, we have a great collaboration suite. We've just recently added Web conferencing and audio conferencing as a Web service. This year we'll also be expanding in two other areas: One is e-mail, and the other is CRM. Through that, customers will get consolidated support, billing account management and volume purchasing. They can have all of their data with one trusted provider.

CRN: So your intention is to compete more broadly with companies such as in the CRM space?

FAULK: They'll certainly be a competitor. We increasingly see them going up-market and leaving a big void in the SMB space. Frankly, we hear it from our customers every day. The real issues are value and simplicity. When we introduced Web conferencing several months ago, we wanted pricing that really worked for small business. If you look at WebEx pricing and [Microsoft's] Live Meeting, [customers] are going to spend $60, $70, $80 per seat per month. And it's a named-seat model. We didn't think that was very friendly for SMBs, so we've introduced no-nonsense pricing, which allows anyone on your Intranet. Let's say you have 100 members for one low subscription of $199 a month, to be licensed for Web and audio conferencing. You can connect conferences of up to 25 people for that single pricing. We think that the named-seat model is very complex. Small businesses just can't afford the price points that WebEx and Live Meeting charge. We will have a very similar pricing strategy for e-mail and also CRM as well.

CRN: What is your go-to-market strategy?

FAULK: About 80 percent of our business is direct. But we also have a reseller channel. We have a number of partners who represent about 20 percent of our business. We have about 100 partners. What they do is take our service and re-brand it. The nice thing about this from a resale perspective is that it's a recurring revenue model. It's a totally monthly recurring subscription business that we share with them over time. It's not just a one-shot finder's fee. They get a significant portion of the recurring revenue. We effectively do all the hosting blindly for you, the partner. We brand it for you. All of the communications are all branded for the partner. We give them a whole infrastructure, including a Web site, where those partners can sign up their customers.

CRN: How big is the market opportunity?

FAULK: There'll be around 500,000 Intranets built this year in the small- to medium-size business market. If you layer on departments and project teams in larger organizations, that number probably triples. We will probably be at 250 to 300 partners by the end of the year, spanning a number of different vertical industries. CRN: To what extent can the partner customize the offering?

FAULK: We have built our solution to be very partner-friendly in terms of customization—from color schemes to content, and everywhere in between. If the partner asks for specific content they want to surface every time the Intranet is created, we can do that. We've also got a function called Global Messaging that allows a partner to customize messaging for every Intranet that's set up. We also support Web services to link with other applications, like a corporate calendaring system.

CRN: So unlike a lot of other ASP offerings, you're not trying to displace resellers in SMB accounts? FAULK: There are a lot of SMBs that have relationships with resellers, and we want to maintain those relationships.