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!

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?

The software market today is driven by the rise of cloud computing, forcing independent software vendors (ISVs) to fight commoditization-driven margin pressure, expand to new channels and markets, and move to “frictionless” self-service transactions. These new delivery models have irrevocably altered how software is developed, distributed and consumed…

… that was the heavy “marketing” intro. Now to the real world!

Actually, the truth is that the software world has changed and continues to change at a rapid pace. So let’s not just talk about it, let’s get together, learn how to understand the market challenges from the best in the industry and from each other, adapt these to our own reality, and do better.

So Avangate is inviting you to join us for a series of events during November and December – pick the location closest to you:  US, UK or China:
•    San Francisco: Thursday, November 10th, 2011, Zibibbo Restaurant
•    New York: Friday, November 18th, 2011, Crown Royalton Hotel
•    Beijing: Saturday, November 19th, 2011, Beijing Huang Yuan Hotel Ballroom
•    London: Thursday, December 8th, 2011, the Hospital Club

We’ve invited great speakers: Brian K. Walker, Vice President & Principal Analyst, Forrester Research, Inc., R “Ray” Wang, Principal Analyst and CEO, Constellation Research Group, Geno Prussakov, Affiliate Marketing Expert, AM Navigator LLC – check the links above to learn who is speaking at each location.

We’ll bring to the table not only great food, but also tips and guidance (and more!) on how to sell software and SaaS solutions in a world of many channels and many models.

Next step: register here. You’ll hear back from us – a friendly warning that places are limited and filling up fast!

Looking forward to meeting you there!

Both 2010 and 2011 have been called Year of Conversion Rate Optimization. And there certainly isn’t any mistake in that, given the burst of both knowledge and tools out there on the topic. And the best part of it is that most online businesses now have access to all they need to increase their sales, newsletter subscribers, followers etc. (and no more excuses if they don’t).

When it comes to selling software online, conversion rate is probably the metric with the highest impact on sales. So, to get you started I want to share with you  a list of 5 tools that I have tested both with the Avangate team, as well as during my recent period as software vendor.

Landing Page Platform: Unbounce

Unbounce is a landing page platform that makes creating, publishing and optimizing of landing pages really easy. It’s a great tool for marketing departments as they can roll out landing page after landing page without help from the IT department.

Landing pages often prove decisive when it comes to optimize conversion rates and sales. Different segments of your traffic have different expectations or needs from your website. Greeting each segment of traffic with a specific landing page for their needs can only help that segment of traffic reach the goal faster and in greater numbers. In other words: give a user what he is looking for and he will take it.

Besides the product, the Unbounce blog is a great resource for starting with landing page optimization.

Remote User Testing: Verify

Verify is a great set of remote user testing tools to help you determine how well a design will perform, before publishing it on your website. The tools will make it easy for you to decide what to keep in a design and what to take out or what to change in order to make sure the design will actually increase conversions on your website.

When developing consumer driven products, feedback is crucial. Getting feedback before launching a new page or feature can prove to be a gold mine by not wasting developing resources on things you don’t know if will work or not.

Email Marketing: PadiAct

(Disclaimer: I am co-founder of the company)

PadiAct is a neat tool that helps you optimize your email subscription rate. When it comes to increase the number of your email subscribers, there aren’t many methods out there. One method is to ask users to give their email address when they download your software. Jason Cohen shared some tips on how to ask for user information before the trial starts in his 5-part series: How to convert more software trials to purchases. But this method can also be seen as blackmailing: you give me your email address, I give you a trial – definitely not permission marketing.

This tool allows you to define a segment of traffic whom to ask, in a friendly manner, to subscribe to your newsletter.  Here is an example you could start with: all new visitors that have already downloaded your product. You accomplish 2 things by using targeting to increase subscription lists:

• you don’t interrupt users already within a conversion funnel (downloads, sales);
• you collect good quality email addresses from users that didn’t convert so you get a second chance with them.

A/B Testing: Visual Website Optimizer

Visual Website Optimizer is an easy to use A/B testing tool. These days you can’t really talk about increasing conversion rates and sales without talking about A/B and multivariate testing. There are many tools out there to help put in place a testing strategy, but Visual Website Optimizer makes it so much easier. No IT departments or programming skills needed to get started.

Another cool thing about Visual Website Optimizer is their blog with tons of great info and case studies on A/B testing. Now there’s no excuse for not testing.

For shopping cart testing, you can of course use the A/B testing module from Avangate platform. If you never made a test – share with us your ideas about increasing your shopping cart conversion rates and the most creative ones may be tested in your Avangate account.

User Feedback: KISSinsights

KISSinsights gives your customers a way to tell you what they need. It’s an user feedback platform, really easy to integrate on any website. The best thing about it is that it’s contextual. You can ask your users on your pricing page if there is anything they don’t understand about the pricing or you can ask them on your blog if there is anything else they would like you to write about.

What we love most about KISSinsights it’s that it is not intrusive. After starting collecting feedback with it, most users get the “Aha” moment which usually leads to ideas of better optimizing the website, therefore increasing conversion rate and in the end, sales.

See it in action on this blog and on our website. While you are at it, let us know what topics you would like us to cover more. :)

How will you increase conversion rate in 2011?

In the end it all comes up to provide better experiences to your online visitors in directing them towards the conversion point. What are you plans for improving your conversion rate in 2011?

Avangate is in Moscow this week, at ISDEF Autumn (Sep 30th – Oct 3rd). Wow! It’s the 11th time we are attending this event, by far the biggest software event in Russia. Avangate is the Special Sponsor of this edition and, like every year, we are proud to take part in the event, meet so many people passionate about software and exchange ideas on how to sell software worldwide in a way that is efficient, secure, locally relevant.

Avangate eCommerce consultants will make presentations on hot issues that impact software companies today – developing trust and optimizing conversion rates – and will also be available for one-to-one discussions throughout the event. So don’t miss them:

Today the world celebrates Ada Lovelace Day (ALD), an international day of blogging to draw attention to women excelling in technology. Ada Lovelace is often referred to as the worlds’ first programmer, as she wrote a series of instructions for Charles Babbage’s proposed mechanical computer that would calculate Bernoulli numbers back in 1843.

The fact that the inventor happened to be a woman doesn’t necessarily make me feel prouder that I’m a woman, but I admit it’s a an argument I would probably bring on the table in a gender debate. On the other hand, I do find ALD to be a great opportunity to think about other wonderful women that I follow, admire and respect in the worlds of online marketing & software business.