Hosted apps have unique objections to overcome to be adopted by a customer. Here are three most common objections that I’ve encountered:
Objection 1: Data Safety
<CustomerVoice>
Is my data backed up? How often? Can I easily export my data? What if my hosted app vendor goes out of business or is subject to a regulatory action — what happens to my data? Who else can see my data? Other customers? Sys admins? Who owns the data?
How do I know what you’re telling me about data safety is true?
</CustomerVoice>
Objection 2: Performance
Even profitable, well known hosted applications struggle with performance.
Objection 3: Application Changes
I see this message once a week in at the top of the browser while using Google AdWords:
What if I don’t like the interface change? Can I go back to the old interface?
A Hybrid Approach
I read a lot of blogs and my current RSS reader is Google Reader. But, I’m always on the look out for a better reader. I came across a comment that mentioned Fever. Looking through their web site, Fever looks special — a power RSS reader. The distribution model gave me pause: it’s INSTALLED software — for $30 you get a license and free minor updates; major updates require another payment.
As a customer, installed software doesn’t suffer from any of the objections above. However, installed software is “high friction”: I have to go and arrange for hosting, get backups setup and scheduled, handle updates to the software, etc…
As a software developer, I like the idea of being able to focus on code and 1) skip multitenancy and 2) forget about IT infrastructure for selling a hosted app.
How about this hybrid approach utilizing the open Web App Store API? (see our previous post on an open standard for a App Store for Web Apps)
Here’s the scenario:
- Fever acts as an App Store.
- When buying Fever, the customer has these add-on options:
- RackSpace Cloud hosting. The entry level cloud server instance is about $12/month
- A custom domain name for the spiffy new cloud server through any of the googillion domain registrars out there. This could be as cheap as a $5/year.
- SendGrid for outbound SMTP e-mail (for notifications, etc…). Their free plan is sufficient for starting out.
- Fever establishes relationships with these firms to provision accounts and use existing APIs at RackSpace Cloud to get a Linux instance setup, get Fever installed, and get everything else configured.
Let’s break down what happens with this scenario:
- The customer gets Fever by only clicking a few extra check boxes.
- The customer is getting a good deal. My arithmetic says the amortized monthly cost is less than $15 — which is still pretty cheap hosted software.
- Fever ends up with a product to sell with less sales friction, a much larger audience (more than just people who can install server software), and new recurring revenue streams from RackSpace, et. al.
- Fever is staying out of the hosted software business.
- RackSpace Cloud, SendGrid, etc…, are incentivized to give Fever link love, referrals, and generally be neighborly.
The customer is far more likely to feel safer with their data in the hands of RackSpace (mighty, well known, publicly traded firm) than a micro-ISV (yes, I know that RackSpace has been in the news lately but I still believe this holds true). The customer can pay RackSpace Cloud for whatever level of backup that makes them comfortable:
With RackSpace Cloud, the customer can resize their server with a few mouse clicks if performance becomes a problem. Regardless, there won’t be any pesky “other customers” causing the Fever to run slow to begin with.
The customer also controls when the app gets updated. Fever would need to support (if it doesn’t already) 1 click auto update like WordPress does (like the message that is taunting me at the top of this browser window):
Fever could even detect when it is running on RackSpace Cloud and call the backup API before doing the auto update (just in case).
Everyone wins. The customer still has hosted app advantages without the disadvantages listed at the top of the article. Fever gets to concentrate on developing software. RackSpace, SendGrid, etc… concentrate on what they are good at. It’s harmony!
The best part is that this is all doable today. All of the cloud APIs needed for this distribution model exist right now.
Think about it — should you be selling your software this way?
WHAT DO WE DO?
Your business is spitting out lots of data that you either ignore or spend too much time looking through.
BigBrassBand relates and presents your data in an action oriented format so that you:
1) do the things you need to be doing to be successful,
2) reduce the amount of time it takes to do those things and
3) have more time to spend building your product, going to conferences, or playing with your kids.
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