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A Winning Combination: Software-as-Services Plus Business Consulting and Process Services
By Laurie McCabe
January 30, 2004

“The day in the sun is coming for ASPs,” predicts Greg Gianforte, CEO, chairman and founder of RightNow, an ASP that specializes in customer service and support.

Gianforte has a unique view from which to make that pronouncement. Not only is the company rare because it just reported its 16th consecutive quarter of revenue growth and a 28 percent increase over last year, but the company also has a unique vantage point from the mountains of Montana.

Read and React
“People think ASPs can’t integrate with other applications, that’s a bunch of crap.”

— Greg Gianforte
CEO, chairman and founder

Give us your feedback in the ASPnews Discussion Forum

RightNow takes pride in its home base of Bozeman, Montana, but it takes even more pride in its cash-flow positive position and success delivering a range of customer service and support services that include self-service knowledge bases, an e-mail response management system, live chat and collaboration, call management and location mapping routing.

RightNow’s flagship service, RightNow eService Center, is designed to improve the quality of customer service, reduce the cost of operations and increase revenue opportunities.

Reducing the need to interact with customers on a one-on-one basis is critical for businesses whose profits are based on a high-volume, low-cost model. Gianforte uses Electronic Arts, one of RightNow’s customers, as an example of how important it is to have an effective self-service support system in place.

“EA has 12 million customers paying $9.95 for its game service. If you figure responding to an e-mail cost $3, how many e-mails a month can they answer before that customer isn’t profitable for them? The answer is none.”

For other companies, some interaction with the customer is a way to drive business. In those scenarios, customers can choose products such as RightNow Locator for linking corporate Web presences to bricks-and-mortar facilities or RightNow Live for online chats with customer service representatives.

Gianforte attributes part of RightNow’s success to applying best practices and guidance for different vertical markets. “We audit and grade customers on how they implemented best practices.” There is a direct correlation between following best practices and return on investment (ROI), Gianforte said.

RightNow also views its focus on offering hosted applications as a key to its popularity with both new and existing customers. While RightNow does offer an on-site software version of its product, Gianforte told ASPnews that 80 percent of customers currently use the hosted model and that 90 percent of new customers are choosing the hosted model.

The reason is simple — ASPs eliminate infrastructure costs. “We don’t charge for hosting. If you buy our application and run it on your hardware, it’s, say, $50,000 for two years. If we host it, it’s still $50,000 for two years,” Gianforte said. With the on-site approach, the cost is three to five times more expensive because you have to buy the hardware and hire staff, he said.

The ASP model also makes it more efficient to deploy upgrades and new versions. Gianforte said RightNow offers major upgrades twice a year and minor upgrades every six weeks.

Even though RightNow is based in Montana, not Missouri, it has a “show me” mentality when selling to customers. “We are able to prove our technology,” Gianforte told ASPnews. “We couldn’t do it if we weren’t an ASP. We can say, ‘You don’t have to believe. We’ll install it and you can try it before you buy it.’ “

As a company that focuses exclusively on helping companies manage customer relationships, Gianforte believes RightNow is one of a new breed of software-as-a-service providers that are cleaning up what he describes as the “wreckage left” by traditional enterprise customer relationship management (CRM) software vendors.

“Customers are sick and tired of enterprise software vendors, Gianforte told ASPnews. “Salesforce.com, Upshot and us are the only CRM bright spots.”

However, Gianforte hears the concerns that some industry watchers still have about ASPs. “People think ASPs can’t integrate with other applications, that’s a bunch of crap.” Gianforte points to integration arrangements with 60 companies, all based on Web services and XML technology.

RightNow was founded in 1997 and also has offices Dallas, London and Sydney. It lays claim to 1,000 customers including Air New Zealand, Ben & Jerry’s, British Airways, Cisco, Fujitsu, Maxtor, Orbitz, Remington, Sanyo and more than 100 public sector clients including the Social Security Administration and the State of Florida.

Do you have a comment or question about this article or the ASP industry in general? Speak out in the ASP Discussion Forum.


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