About Carl Theobald

 Carl Theobald is a seasoned technology executive with a proven track record of building high-performance organizations and bringing world-class products and services to market.

Throughout his career, Carl has also helped to build multiple venture-backed companies, including RubiconSoft, a company he co-founded to provide better visibility into demand for the manufacturing industry.

Carl received an MS in Engineering-Economic Systems from Stanford University and a BS in Electrical Engineering from Princeton University, where he graduated Summa Cum Laude. Carl is passionate about playing the piano and music composition, receiving the “Most Outstanding Musician Award” from the New England Conservatory.

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Avangate’s Vision of Customer Centric Commerce Gets A Major Investment From Francisco Partners

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Sell software online

I’m thrilled to announce we have just closed a very strategic transaction with Francisco Partners. With this transaction, Francisco is acquiring Avangate and investing additional capital to further accelerate our already impressive growth. Francisco Partners is one of the most respected private equity firms in the world with over $7 Billion under management and we are extremely pleased to find an investment partner who shares our vision of Customer Centric Commerce. Even more importantly, the capital investment will help us further scale up our operations, deliver expanded platform capabilities, and better serve and support you, our customers.

When Avangate was founded 7 years ago, commerce for our software customers was already shifting rapidly with customers asking questions like — “How do we take advantage of this shift to online and digital distribution?” and “How do I start to sell into new global markets?” With each year, we have also seen the definition of what is considered software continue to evolve. We’re now seeing an explosion in SaaS and Cloud Services prompting new questions like — “How can I quickly optimize new business models, like subscriptions and usage-based billing,” and “How do I transition and monetize SaaS and Mobile,” to increasingly, “How can I maximize and monetize each customer touch point?”

The proliferation of customer choice, available information, and ubiquitous touch points has also changed buyer behavior at both traditional B2C and B2B companies driving buyers to not only look for information, but also to seek how they can interact and transact with you on their terms. These changes are forcing companies to rethink their commerce solutions.

Today, we have over 3,000 customers across more than 100 countries who have chosen us because they required a more customer centric and agile commerce solution that unites online eCommerce, reseller & affiliate management, subscription billing, and global payments in a single, complete platform.

Our new partnership with Francisco Partners is a significant milestone in Avangate’s journey and I would like to use this opportunity to thank you, our customers and partners, for your loyal support over the past 7 years. We could not have reached this milestone without you and we look forward to serving you for many years to come as you grow your worldwide sales – across channels, business models, and markets.

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Redefining Vendor-Partner-Customer Relationships across Sales Channels

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Software as a service is shifting the software industry away from upfront implementation models and toward ongoing subscription models. With this shift comes a need to develop ongoing, rather than transactional, customer relationships, where self-service and customer support are increasingly intertwined. As SaaS vendors look to expand their sales channels and transition partner sales to subscription models, they may discover that traditional channel partners are not always well equipped to manage SaaS accounts. The changing software sales model requires new levels of partner oversight by vendors and increased customer outreach efforts by partners in order to succeed. Here are some steps toward achieving success with partner-based SaaS sales models.

Close-Knit Partner–Customer Relationships

SaaS not only shifts business models, but also raises customer expectations, creating new responsibilities for channel sales partners. Partners accustomed to onboarding customers with large upfront engagements, in order to sustain a steady or growing revenue stream, must now develop more sustained relationships with those customers, who are in turn becoming more demanding. Software vendors can facilitate the partner-customer relationship with multiple techniques, all of which accelerate customer understanding and put new tools in the hands of customers.

From the first interaction, software vendors need to work to set expectations with channel partners regarding what constitutes a successful customer interaction. SaaS customers need to know when they should contact their sales partner, when to talk to the software vendor, and above all how to use the self-service tools available to them. This may require SaaS vendors to work closely with partners to develop support portals or knowledge bases to address common customer concerns, as well as to consider service agreements that identify when vendors should be called in.

A solid resource portal specific to the channel partner can play a crucial role in enabling partners to serve customers, allowing vendors to focus on software development and putting more relationship building on the shoulders of partners.

A close customer relationship is important not only for smooth onboarding and initial customer satisfaction, but also for attracting ongoing sales through subscription renewals, cross-sales, add-ons, additional support services, and other offerings. As sales channel partners become more familiar with the customers in their niche, they become better prepared to understand those customers’ unique needs and recommend solutions accordingly. A combination of partner expertise and vendor knowledge of popular products and profitable sales approaches can help identify the proper path to adoption for particular customers.

SaaS has truly “democratized” software, not only making it more accessible to more people, but also giving customers a closer relationship with vendors and more impact on features and services. Vendors and partners must provide a clear channel of communication for customers to evaluate products and provide immediately feedback. And when SaaS vendors are equipped to rapidly develop new features in response to customer feedback (communication facilitated by the partners), they will be able to spark customer loyalty and renewals in unprecedented ways.

Build Smaller Chunks of Functionality and Grow with Their Needs

The old-school software license is obsolete, and the SaaS subscription model is taking its place. While the end of large license fees might make some companies mourn, the change in compensation models actually provides significant opportunity to SaaS vendors and their partners. Rather than investing a large upfront effort in making a big sale and leading a complex implementation with the potential to devastate customer satisfaction if anything goes wrong, vendors and partners can work together towards understanding customer needs and bringing in different components of a comprehensive SaaS solution one piece at a time.

Special tools can help SaaS vendors manage their subscription offerings, monitoring both direct and channel partner sales. Dashboards and reports that show popular products and effective promotions, both overall and for particular markets, can be used to help sales partners develop strategies for building out their customers’ SaaS platform. By experimenting with different product and service combinations and tracking every promotional effort, SaaS vendors and sales partners can eventually perfect the mix of software solutions that will appeal to certain types of customers.

Automating the Details

With the understanding that the customer relationship is what truly counts, SaaS vendors will also need to work with channel partners to automate many routine sales processes, including onboarding new customers; processing subscriptions (billing infrastructure), renewals, and upgrades; and providing discounts based on customer type and history.

Custom tools  and integration APIs can revolutionize the customer management process for vendors and partners alike, giving partners as much autonomy as the vendors are comfortable with, or enabling vendors to retain approval over certain types of transactions. By automating as many sales and administrative processes as possible, vendors and partners are freed to focus on building customer relationships and finding out what works to inspire customer renewals, add-ons, upgrades, and especially conversions.

In the SaaS model, it’s all about the relationship. But don’t neglect the many factors that inform that relationship: marketing outreach, educational resources, self-service portals, and intermittent check-ins from partners and vendors. By experimenting with approaches and analyzing data, SaaS vendors and partners can ensure that existing customers adapt successfully to the subscription model, even as improved resources, responsiveness, and ongoing customer contact continue to bring new business on board.

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2011 Was a Great Year. 2012 Will be Even Better.

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2011 – A year of tremendous expansion in how we serve our Software and SaaS customers

When I end a year, I like to take a moment to step back and appreciate what we accomplished.  2011 has been an incredibly exciting year for Avangate.

We launched our new SkyCommerce Suite, expanded our overall service with close to 1.000 new features and enhancements, delivered new marketing and optimization services, and extended our global presence with new team members and offices, including our new North American headquarters in Redwood Shores, California.  All of this with the aim of helping our customers sell more software through any channel and any model.

It is not too surprising that the software market continues to grow as software plays an increasingly important role in our world (see Andresseen’s view on how “Software is Eating the World“).  More interestingly is the massive shift in how software is being distributed and sold.   The market size of ESD and SaaS will grow from $45Bln to over $120Bln by 2014.  The 3TS Cisco Growth Fund recognized this opportunity with a $6 million investment in Avangate in March of this year, accelerating our growth and strengthening our global presence.

We’ve been honored to serve this market – we participated in, sponsored or organized over fourteen events this year to network, share ideas, and help our customers grow their businesses.  We now have over 2,000 clients, from some of the largest vendors of consumer software titles, such as Bitdefender and Kaspersky, to SaaS vendors including Terapeak and TeamLab.

In addition, our affiliate network has grown to over 27,000 software members – Majorgeeks, Siliconaction.com.br and TopTenServices.net are three power affiliates that joined in 2011.  I’m incredibly proud of the Avangate team for continuing to deliver a mature platform with the scale and flexibility to serve shareware, mid-market, and enterprise software and SaaS companies.  What’s more, we are honored to be recognized in Forrester’s recent report on Solutions For Digital Commerce.

2012 – Prediction, Cloudy with a Chance of Significant Growth

The cloud is not a new concept, but we see this trend accelerating to dominate future initiatives (8 out of 10 new software start-ups are SaaS). The software market will only continue to be driven and disrupted by the rise of the cloud.

What does this boil down to? I particularly liked a blog post by Louis Columbus talking about “stripping away the hype by asking how these technologies [analytics, big data and cloud computing] contribute to excellent customer experiences and greater customer engagement.  Those are the real catalysts of market growth and the greatest disruptive forces at work in enterprise software today.

While there are many predictions for 2012 (many articles are mentioning growth for next year which is good news – here’s one example about the antivirus sub-vertical; and also check out this Boxing Day treat by Ray Wang), let us spotlight one that is specifically apt for software companies: the transition from systems of transaction to systems of engagements and experience.

Software: engagement across the lifecycle

We feel this is important and has many implications for a software company. As many ISVs transition from perpetual to pay-as-you-go models such as freemium, rental, or subscription, they need to also experiment with new partners and affiliates and manage sales worldwide through any channel, online and offline.  The challenge is to do this while providing a flexible and frictionless customer experience across the software lifecycle. We have focused on this in 2011 with our integrated SkyCommerce solution and are continuing this focus into 2012.

Software companies need to have the platform to effectively engage and create the right experiences for their customers and need to be able to do it in a way that complements, and not alienates, the resellers which still make up over 50% of software sales today.

Likewise, software resellers and distributors need to be able to take advantage of these industry shifts, continue to increasingly migrate their businesses online and focus on emerging trends, such as aggregating cloud services.

Meet with us

Stay tuned for new and exciting things we’ve planned for 2012. To start with, meet the team at the first industry event we’re attending next year: Affiliate Summit West, January 8-10, Las Vegas, USA.

Happy 2012 and best wishes from all of us here at Avangate!

P.S. Your point of view for 2012?

We would love to hear what you think are some of the key trends that will drive your sales in 2012. We will continue to build upon these issues into the New Year on this blog and look forward to continuing the conversation!

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Any Channel. Any Model. The Wave is Coming.

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Today around 30 percent of all software is distributed online and predictions are that it will account for 70 percent of all software sold in 2 – 3 years. Clearly, the cloud has changed virtually everything in how software is developed, distributed and consumed. Most importantly, it has given customers much more control: whether B2B or B2C, buyers want instant gratification and “frictionless” self-service transactions.  This disruption is also affecting pricing models as customers become more demanding about subscriptions or pay-as-you-go models.

This unprecedented amount of change is a good thing for industry innovators, as their new business models and technologies are born into a market eager to trying new products and services.

Why struggle with the transition alone?

So what about existing businesses? How do you adapt and change successfully? Do you once again chase the early majority and risk cannibalizing your present sales, or do you stay and try to hold onto the laggards? How are you taking advantage of international markets – optimizing your existing sales channels or onboarding new ones that have marketing strength and local knowledge?

At Avangate we see more and more ISVs transition from perpetual to pay-as-you-go models such as freemium, rental, or subscription; experiment with new channels, partners and affiliates. Try, test, measure, decide. How better than with a single, modular platform, providing the operational agility to do all of this with minimum effort and risk?

This is what today’s launch of our SkyCommerce™ Suite is about: helping software and SaaS vendors take advantage of these disruptive changes, get to market faster, complement their

The wave is coming. Learn to surf!

existing systems, and manage their end-to-end subscriber lifecycles, offering a consistent customer experience at every channel.

We are just scratching the surface, as there is plenty to talk about on these themes. You will hear more from us on this blog.

In the meantime, we want to hear what YOU think.  Share with us your opinion on what disruptions you see in the market – are they opportunities or threats for your software business?

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