The SoftAd Group saved a health care customer $50,000 in annual hosting fees. Here's how.
When Blair Kellison became president of AlternativeMedicine.com in January 2000, his first task was to overhaul and expand the companys antiquated Web site, which was deployed in 1996.
He put together a detailed RFP (request for proposal) and shopped it around to several well-known solutions providers, including Organic Inc. (now mulling a potential sale to Seneca Investments LLC) and Arthur Andersen (now known simply as Andersen).
"The cheapest quote was $1 million to $3 million just to get started," says Kellison, "plus another $200,000 per year for maintenance."
Kellison thought the estimates were too expensive, but he knew that the project certainly involved major surgery. For starters, Alternative- Medicine needed to reformat its hosted contentwhich included a 20,000-page collection of books, reference guides and back issues of Alternative Medicine magazine. The new solution also required the reformatting of directory listings for 240,000 alternative medicine practitioners. All of the information was stored in a Unix-based, custom-written Web server hosted by Digex Inc.
"There was no database, just a flat text file," says Kellison. As a result, visitors searching for information had no way to extract specific types of results. "They couldnt pull up just a listing of practitioners or just product information. They might even get a table of contents from one of our magazines," he laments.
Further complicating matters, the suite was maintained by "a husband-wife team." AlternativeMedicines staff had to request additions and changes, then wait a day or more to see them implemented.
Kellison wanted to bring content management and site maintenance in-house. "But we never did find a cost-effective solution" among mainstream Web-development firms, he says.
Get a Second Opinion
Enter The SoftAd Group, a San Francisco-based solutions provider that develops ChannelNet, a software platform that links enterprise companies to partners and their customers.
AlternativeMedicine founder Burton Goldberg happened to meet SoftAds founder, Paula Tompkins, during a trip to Aspen, Colo. Goldberg explained his Web problem, and Tompkins introduced him to SoftAds ChannelNet solution.
First released in September 1999, ChannelNet is a sell-side e- business platform designed for manufacturers and their distribution partners. What that has to do with a publisher like AlternativeMedicine will become clear in a moment.
ChannelNet consists of 10 modules, which can be purchased separately. All of them employ open standards architecture, published APIs and XML to integrate with existing systems and custom-written applications. Microsoft SQL Server and Internet Information Server (IIS) provide the database and Web server foundations for each ChannelNet module.
(Editors note: Before recommending or deploying IIS, its important to note that GartnerGroup recently warned customers to steer clear of the Microsoft platform because of security concerns. The consulting firm recommended Sun Microsystems iPlanet and Apache as potential IIS alternatives.)
ChannelNets Catalog module is fundamental to almost any selling application. It enables customers to maintain, retrieve and display stored information. Documents and images can be organized in an unlimited number of categories for hierarchical browsing. Full-text search functions also are included in the module. Related documents can be linked; in AlternativeMedicines case, a magazine article about allergies might be linked to pages from books or product literature. Documents, categories and links can be updated in real time.
Converting the flat-file data to ChannelNets database format took three weeks. Then, newly hired webmaster Shaun Lin organized the documents in categories and created links between related documents.
The Locate module helps prospective customers locate a manufacturers distributorsor, in this case, any of the 240,000 alternative medicine practitioners in AlternativeMedicines "yellow-pages" directory. Multiple search criteria are allowed, such as "someone who treats allergies using aromatherapy in Denver." And the module includes interfaces to mapping services such as MapQuest.com.
The Site Builder module plays a key role in AlternativeMedicines business plan. It enables individual practitioners to create micro-sites, which Alternative- Medicine hosts for a fee. The company expects the microsites to generate $500,000 per year in hosting fees.
The revamped Alternative- Medicine.com site was moved from Digex to DellHost, the Web-hosting division of Dell Computer. "That move saved us about one-third of our hosting costs," notes Kellison.
Overall, AlternativeMedicine will save $50,000 per year in outsourcing costs.
The conversion to Channel- Net cost "between $300,000 and $500,000," according to Kellison, including software licenses and professional services.
Catalog, Locate and Site Builder are the only ChannelNet modules that Alternative- Medicine needs at this time.
So far, those modules are proving popular with AlternativeMedicines customers. "Many practitioners are just coming out of school, and their biggest need is patient referrals," says Kellison. "Half of our visitors head first to the practitioner yellow pages," indicating a strong demand from a self-qualified audience.
AlternativeMedicine can purchase additional Channel- Net modules at a future time, if needed. They are:
1. The Assess module, which supports interactive online selling by guiding customers through a customized series of questions, retrieving relevant product information from Catalog, and eliminating products that are incompatible with customers expressed needs.
2. The Compare module enables side-by-side comparisons of product features and pricesincluding selected products from competitors.
3. The Build module guides customers through the configuration of complex products, displaying updated prices at each step.
4. The Transact module forwards customer order information to a channel partner or to a manufacturers internal order-processing system.
5. Special offers can be displayed to self-qualified prospects via the Promote module.
6. The Loyalty module encourages repeat purchases through special e-mail promotions and log-in features.
AlternativeMedicine.coms next purchase may be the Assess module, which would guide visitors through the process of learning about their conditions, alternative treatments and practitioners.
Who Is SoftAd?
The AlternativeMedicine project is the latest step in SoftAds transformation from a custom software-development shop into a modular solutions provider.
"We were originally a programming and integration house," says Marilyn Murtha, VP of product management. "But about three years ago, we decided to focus on developing a modular product that was easy to use."
"ChannelNet is a tool set that provides the tools customers need, as they need them," adds Holger Hoppe, SoftAds director of engineering.
SoftAd has not abandoned services, of course. Murtha says the companys goal is to derive 70 percent of its revenue from product sales and 30 percent from service fees.
Other solutions providers are exploring partnerships with SoftAd. "SoftAd offers an incredible reduction in maintenance costs, and makes customers self-sufficient at reduced costs," says Coby Dunn, district manager for supply chain consultant and integrator Syncata Corp.
Other potential partners are impressed with SoftAds vertical-market expertise. SoftAd, for instance, has a longstanding sales relationship with Ford Motor Corp. The automotive giant uses SoftAds DealerConnection software to link with partners and suppliers. Henry Fords great grandson even decided to invest an undisclosed sum in SoftAd, which is privately held.