Astoria Software was a start-up offering on-demand content management using an object-oriented database. A use case example would be Boeing; Astoria provided the documentation system for the 747, which runs approximately 1.2 million pages in length, requires subsystem documentation from hundreds of vendors, which then needs to be translated into dozens of languages and branded per carrier. We were essentially documenting the world’s most complex machinery, manufactured by the largest companies in their respective industries. Astoria originally offered their software as a perpetual license (rack mounted, behind the firewall, supported by IT, etc.), and sold primarily to defense contractors and the military.
This market eventually dried out, and a new management team was brought in. We were tasked with moving the company out of Defense and into Manufacturing, and transitioning the product from on-premise to Software as a Service (SaaS).
In less than a year and a half, we completely transitioned the technology architecture to an on-demand model, launched the product, and brought in over a half dozen Fortune 1000 customers in the semiconductor, medical device and discrete manufacturing verticals, ranging from $300,000 to over a million per year in recurring revenue. All of these accounts came at the expense of much bigger, better funded competitors.
This was a really well-run company, headed by a very experienced team, and resulted in a successful exit strategy (acquisition by Perfect Software Systems). If you’d like to check out the web site, click here.
As the Vice President of Marketing, I was responsible for product marketing, product management, marketing programs, marketing communications, business development, and strategic planning. Details are as follows:
Astoria provided an excellent example of a well thought through messaging and positioning execution. We needed to take the company in an entire new direction without spooking our existing customers, establish a broad and deep media footprint, fight against vastly bigger competitors, and create an entire communications package (branding, web site, collateral, value proposition, etc.).
We changed the value proposition to track two levels higher in the food chain, going from tech writers to VPs of Engineering and Marketing. Our message became much more business-centric, rather than technology/domain-centric. We had two significant advantages, which we wielded with great enthusiasm on our competitors.
1) Being on-demand allowed us to drop our price point while increasing margins, and we could deploy our solution in weeks rather than months. 2) Running on an object database allowed us to scale far more quickly, and with a far greater level of control than anyone we competed against. We did not lose in head to head competition once, and this message was broadcast loud and clear to the entire analyst community covering the Content Management, Manufacturing, Semiconductor, Medical Device, and Software industries.
We transitioned our enterprise-grade content management system from a perpetual to an on-demand model. This involved porting three separate sub-systems from a LAN-centric to a WAN-centric implementation, while still continuing development on a perpetual version in use at companies such as Texas Instruments and Lockheed Martin.
We expanded integration of our system from a single vendor input source (PTC’s Arbortext Editor) to include every major authoring tool available, including Word and Frame. We also expanded our translation memory server integration to include two of the three leading industry solutions as an integral part of our product offering. We expanded our content sourcing to include Rich Media applications such as Flash, 3D CAD/CAM, full-motion video, etc.
We transitioned product development from a waterfall development method to an Agile-based one. This allowed us to integrate our customers much more tightly into our product development process. From an end-user perspective, the initial on-demand version was indistinguishable from the perpetual version, and since the initial launch the primary difference was that the on-demand version received a steady and substantial stream of upgrades on a continuous basis, rather than twice per year.
I had the good fortune to hire an extremely capable boutique MarCom agency, TechMarket Communications, who did an excellent job of bird-dogging the media and consistently getting us face time with the major analysts who were tracking our space. The amount of coverage we received was consistently high and positive, and was a core enabler of our holding a thought leadership position within the SaaS Content Management domain.
One aspect of MarCom that turned out to be a surprisingly effecting marketing tool was my blog. Most of the postings were picked up and republished on a regular basis. It generated a significant number of interview requests, and even generated a couple of strong sales leads. One thing that worked really well was to treat the thought-piece postings as media advisories; which blasted them out to over 900 journalists and analysts. We always got a good response when we did this.
Marketing programs included webinars/webcasts, participation in roughly twelve trade shows per year (mostly in the third quarter), Search Engine Optimization and Search Engine Marketing, dimensional mailers that were preceded and followed by electronic mail campaigns, a fully integrated telemarketing function, as well as blogging as a lead source (in addition to the media aspect of blogging).
We implemented a rolling series of multi-touch direct marketing campaigns that provided a very granular grasp of the account development process, all of which was tied to real-time metrics and analytics. The sequence was as follows:
- We purchased scrubbed lists from vendors specializing in our target domains or verticals.
- The telemarketing group verified all contact information for the target list.
- A templated e-mail was sent to all contacts letting them know to expect a package in the mail. The e-mails included embedded scripts that allowed us to know when it was opened, how many times, if the attachment was opened, and if it was forwarded.
- The telemarketing group called to verify receipt of the e-mail, and to see if there were any requests for information.
- The dimensional mailer was subsequently sent to the prospect via UPS, telemarketing followed up within four days to ensure delivery.
- The telemarketing group was responsible for account cultivation, once it reached a point of relevant interest (we have the right contact, they have a project and a budget, etc.) the lead was then passed to Sales.
Everything we did was tracked back to Salesforce.com, graphed, and subsequently reported to the executive team on a weekly basis, and to the Board of Directors on quarterly basis. The same tracking and metrics process was applied to webinars, podcasts, and on-line advertising.
There were two components to Business Development at Astoria, product-centric, and channel-centric. Because product management was within the scope of marketing, we were also responsible for Business Development from a product integration perspective. An example of companies we engaged with include:
- Adobe: Most of our Fortune 500 customers used Framemaker as the authoring tool into our content management system. We offered integration of FM into our CMS for years, our later efforts focused on developing a WAN-version of FM integration (we already had a LAN version), as well as on developing integration of their Rich Media applications (e.g. Flash). We were fully engaged with Adobe, our contacts ranged from product managers up to the CEO.
- Translation Vendors: We worked extensively with both SDL and Idiom, integrating their Translation Memory Server into our CMS. Both of these relationships also had a strong channel component, SDL and Idiom took us into multiple F500 accounts, and we did the same for them.
- Authoring Tool Vendors: In addition to Adobe, we also had tight relationships with JustSystems (XMetaL), PTC (ArborText), and In.Vision (which provided a DITA compliant Word plug-in). We shifted our focus from near exclusivity with PTC to a model where we were authoring-tool agnostic. This opened up more business opportunities, as well as offering the possibility of integrating a wide range of rich media including Flash, full-motion video, VoIP, 3D CAD/CAM, etc.
- International: Our international business development efforts (which was unusual for a company this size) was primarily focused on Europe. We worked with Tanner AG in mainland Europe, and Digital ML in the UK. Our biggest customer in Europe was Siemens Medical, and they were particularly ‘assertive’ about driving product requirements–which was great from a Product Management perspective.
- Professional Services: We worked extensively with companies such as Com-Tech (DITA consultants), Innodata Isogen (XML data conversion services), and OpSource (who provided our hosting and first level support). There was a continuous stream of requirements from all three companies that fed into the product development process, run by product management.
This approach to Business Development allowed us to 1) broaden our technology footprint, 2) provide a strong competitive off-set, and 3) provide a substantial number of well-qualified sales leads.
Our strategic framework was to 1) prove the operational validity of SaaS as a delivery mechanism for an enterprise-grade CMS, 2) prove the competitive viability of an object-based CMS vs. a relational-based CMS, 3) position the company for future growth by expanding our offering beyond our traditional markets.
The transition to SaaS from a perpetual model took roughly nine months, which was relatively quick. Once the transition was complete, it reduced our deployment time from nearly a year to less than a month–none of our competitors could match this. It also reduced the acquisition cost of our system by nearly 75%. We had already proven the validity of the object model with our perpetual installed base, but had not done so in the context of SaaS.
We took Astoria from zero SaaS revenue to nearly $4 million in bookings in less than nine months, and the bulk of the business has come from Fortune 100 companies, including Siemens, Avaya, and ITT. The further we developed this market the larger the deal size became, the early sales were in the $200K range, the later sales were consistently coming in at over $1 million. In addition, most of our on-demand customers came back to us for more licenses in other departments, so there was a very strong viral effect at play.
At the same time we are ramped up our on-demand business we were looking to expand our media footprint beyond text to include Flash, full-motion video, and VoIP. We worked with Mark Logic, who had developed a rich media X-query tool that worked well with our object database, as a result we built a working model of a rich media content management system that pretty much blew away everyone who saw it.
The rich media aspect of our offering will took Astoria out of it’s traditional market (technical communications) and provided a strong entry into marketing, customer support, and training. This was one of the primary enablers of the company’s successful exit strategy.