Tuesday, March 10, 2015

Selling Software to Enterprises

There's a new marketing trend that will make it easier for small independent software vendors (microISVs) to sell their software to corporations, nonprofits, and other enterprises. Or perhaps it will make it more difficult to close the sale. It's too early to tell.

The new trend is the enterprise app store. And according to Gartner (as reported in a recent issue of Processor Magazine), by 2017, 25 percent of all large enterprises will have enterprise app stores for their employees.

With an enterprise app store, the IT department would select a wide (or not so wide) variety of software applications that employees could use on their PCs and mobile devices. Employees could visit the app store electronically and choose from applications that have been pre-approved by the corporate IT department. The cost of selected and installed software would be charged back to each employee's business unit.

Benefits to the Enterprise

An enterprise app store benefits the organization by helping to ensure that only approved programs will be installed and used by employees. The bring your own device (BYOD) movement that is growing in most companies is weakening the ability of CIOs to ensure that employees won't install all sorts of programs on their laptops and mobile devices. But the enterprise app store is a step in the right direction for enforcing a standard set of applications across the company.

In addition to controlling which applications are stored on which PCs, tablets, and smartphones, an app store lets the enterprise's CIO manage software licenses more accurately and efficiently. And employees benefit by knowing that the software that is available can be supported by the corporation's help desk staff.

Problems with Site Licenses

Software developers may find some disadvantages to dealing with enterprise app stores. If the app stores truly allow each employee to select the software that he or she will be using to solve their business problems, then it might become much more difficult for microISVs to sell multi-user and site licenses. That's because individuals and not business unit managers will be making the buying decisions for the software that they'll be using.

microISVs need to find a way to make multi-user and site licenses very appealing to large enterprises. Perhaps find a way to contact the app stores' managers and let them know that your app offers features and benefits that your competitors' can't match. Convince them that your app should be the only app that their company or nonprofit allows its workers to use in its software category.

Another approach would be to make the multi-user licensing pricing so attractive that enterprises will feel motivated to select your solution for their companies' problems. Competing on price alone, however, is dangerous. Price competition weakens differentiation, and leads to commoditizing of software. And that results in lower prices for software developers.

Selling to the App Store Managers

microISVs will need to craft sales presentations that appeal to a wide range of stakeholders in each enterprise.

The app store managers will be looking for software in every major business category. Make it easy for them to understand exactly what your program does, how it should be categorized, and how much time and money it will save the enterprises' employees.

Selling multi-platform applications will give you a serious advantage over your competitors. If you have a web-based application, for example, then talk about how it can be used by employees with every major type of PC, tablet, and smartphone.

Selling your App to the Accounting Staff

To get on the "approved software list" of an enterprise app store, it may be necessary to cater to the needs of the accounting people. They may reject the idea of paying for your software by credit card, and require you to use a purchase order system instead. You need to be flexible and create a process that allows large institutions to purchase your apps effortlessly.

When it's time for employees at an enterprise to pay for an upgrade to your software, find a way to send their accounting department a single invoice for all of their workers. Don't make them deal with multiple invoices or multiple purchase orders.

Keeping Tech Support Happy

The enterprise's tech support people may have standards that they require you to meet before approving your applications for the company's app store. High on that list of standards will be the requirement that they won't have to perform hardware validation on every installation in the enterprise.

Most large enterprises upgrade their hardware every three or four years. If your software's copy protection regimen requires users to go online and validate the license on each device, you're not going to be popular with the tech support people. Find a way to make it easy for your customer to validate software when it's re-installed on multiple machines. And find a way for users to upgrade to a new version of your software without involving the enterprise's tech support staff.

Make your Software Help Desk Friendly

Each enterprise's help desk manager is going to give input to decisions about adding specific software to the app store's list of approved programs. The help desk people are looking for software that is easy to understand, and easy to explain to their in-house customers. microISVs need to describe their software simply and clearly on their websites so the help desk people will realize that the programs are simple to use.

Software developers also need to weave the concept of "rock solid software" into their sales presentations. Talk about how many years your software has been in the marketplace. Emphasize the rigorous beta testing regimen that you put each new software release through. Include testimonials on your web site that vouch for the stability of your applications. Help desk people don't want end-users who ask easy questions. Help desk people want end-users who don't have any tech problems or questions.

Dealing with HRM

Larger enterprises' human resource management (HRM) people may only accept software that is easy to use by people with disabilities. And no doubt, there are other standards in the HRM community that will influence the way the HRM people will view your applications. Multi-language support, for example, might seem like a low priority feature that you'll add to your applications some day in the future. But if you're trying to sell software in Canada, you'll find that support for both the French and English languages is not optional.

The Bottom Line

Getting onto the app stores' approved software lists might be a way to sell large quantities of your programs to universities, libraries, government agencies, and Fortune 500 companies. In the coming years, microISVs should monitor this new marketplace trend, and find ways to turn it into a source of income.

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