Rich Media Publishing and Management Part 2: Sorting The Candidates

Business Models and Packaging
By far the easiest segmentation for a vendor to waffle on is the business model. Vendors in this category that have focused their efforts exclusively on software sales and, in some cases, integration (not hosting) services, include Accordent, Autonomy, IVT, Macromedia, Media Publisher, and SoftTV. One of the reasons that this is a popular model is that there is a high margin associated with software, once it’s proven to be stable and to meet customer requirements. Another rationale is that software is highly customizable so the customer’s changing needs may be quickly met by modifying the software as they evolve. For customers, one risk associated with this strategy is that the software a vendor offers may not be fully compatible with existing hardware, and this may not become apparent until after a sizeable investment.

Cisco, IBM, MediaSite and STARBAK are taking a more integrated hardware/software solution sales approach. They package the components tightly together and they or their channel partners wrap as much service around the bundle as the customer is willing to buy. This is a good strategy for customers that do not own content delivery network components prior to purchasing a rich media publishing and management system because they get it all in one stop and can be certain that the results of a trial will carry over to production network performance. The advantage of the hardware/software packaging for the vendors is that they don’t have to support a multiplicity of hardware platforms with their (or their partners’) software applications. Application stability and rapid feature development are among the benefits this strategy enjoys. Risks for vendors include the fact that their specialized hardware may be too expensive when compared with a general purpose servers and software licenses. The vendors offering hardware/software bundles have not demonstrated a strong tendency to offer a hosted service, however, almost every company with a software sales strategy has been or will at some time in the future become a service provider.

Eveo, Reflect Systems, thePlatform, and ZETOOLS offer both software products and platforms for deployment in a customer’s network, and also host their entire suite in a publicly accessible network, functioning as ASPs for companies who don’t wish to purchase products for rich media publishing and management. Companies who deploy these vendors’ platforms internally may also leverage the ASP infrastructure to reach new audiences. The blended strategy offers a "try before you buy" option that is popular among customers. For the vendor, the primary benefit is that services revenues can offset costs of selling the complete platform to a customer.

Although it was the most popular model three or four years ago, only ON24, Loudeye, and Vodium adhere exclusively to the ASP model today. Loudeye appears to be exiting this marketplace, however, the other providers continue to gain traction among corporations of all sizes who don’t want to build and manage their own publishing and media management networks. The benefit for the service provider is that there is a predictable, recurring revenue associated with service contracts. Customers usually enter with a basic service for a specific set of applications and, if the service provider model suits them, the engagement expands to include more events, greater reach, and higher efficiencies of scale.

Regardless of the business model proposed in the first meeting, customers should remember that providers of rich media publishing and management solutions can be flexible in part because they are small, and for some, because they are hungry. "It’s tough out there," summarizes Steve Vonder Haar, digital media analyst and president of Interactive Media Strategies. "Small companies will do whatever they have to, to earn the right to stay in business another quarter or another year."