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Carlos F. CamargoCollaborative Marketing
399 Main StreetLos Altos, CA 94022
650-949-4882February 1999
Phase II:Market Opportunity Identification
Small-to-Medium-sized Business Deep Dive
A custom research project for Prodigy Business Solutions
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High Level Findings from Phase I (July 1998)
• Focus on SMB firms with <50 employees in theNY Metro and Northern California areas
• Emerging geographies are Dallas, Atlanta, and Miami• Offer services with low up-front costs• Ripest markets are consulting and accounting• Expand capabilities through partnering• Build aggressive demand generation programs
Prodigy Capabilities
Top CompetitorsTargeting SMB
Best Markets Bundling Opportunity
Key Recommendations
Consulting, Accounting,Publishing, A/E/C, Investment,
Legal & Health
Consulting, Accounting,Publishing, A/E/C, Investment,
Legal & Health
Large User Base,Concentrated in Key Metro
Areas, Brand Equity,Customer Service
Large User Base,Concentrated in Key Metro
Areas, Brand Equity,Customer Service
Mindspring &Earthlink
Mindspring &Earthlink
E-mail, Web Hosting, Backup,IP Fax & Business Quality
Customer Service
E-mail, Web Hosting, Backup,IP Fax & Business Quality
Customer Service
Size Class1-24
employees25-99
employees100-500 employees
# of Companies(*) 9.5 million 624,000 155,000
Level of Need/Level of
FullfillmentHigh/ Low High/ High High/ High
GeographicalAttractiveness
More concentrated inProdigy coverage
No advantage No advantage
Channel
TelemarketingVARs
DevelopersAssociations
Vendors
TelemarketingVARs
Developers
DirectVARs
Developers
(*) Source: Dun and Bradstreet
Laying down the Foundation forSMB Access, Presence &
Commerce
Laying down the Foundation forLaying down the Foundation forSMB Access, Presence &SMB Access, Presence &
CommerceCommerce
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Review of Key Findings from Phase I (July 1998)
Knowledge Workers are Ripest MarketKnowledge Workers are Ripest Market• Accounting & Consulting share similar needs
but will buy through different channels• Require Relatively Generic Tools and Services• Health, Investment, and Legal require more
specialized content and services• Highly mobile workers with roaming access
needs
6 monthopportunities
12 mo. opportunities
18+ mo. opportunities
ConsultingAccounting
A/E/C
Investment
Legal
Healthcare
Education
Manufacturing
Insurance
Wholesale
Real Estate
Retail
Publishing
The objectives of Phase I were to:The objectives of Phase I were to:1) prepare a market segmentation situation analysis
identifying and classifying the "universe" ofmarket segments
2) determine the highest value for small andmedium business market segments
3) relate the potential Prodigy business bundleofferings to the leading market segmentopportunities.
4) perform a competitive analysis of keycompetitors
5) conduct an analysis of channel alternatives
Competitive Landscape & Best PracticesCompetitive Landscape & Best Practices
•Referral Programs
•Customer Gateway
•Information &Resource Library
•ISV Alliances
•OEM Partnerships
•Web DeveloperPrograms
MindSpringMindSpringEarthlinkEarthlink
PSINetPSINetConcentricConcentricNetcomNetcom
Demand Generation Strategies Channel Strategies
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Phase II Objectives
• Find commonalties across the SMB market around whichProdigy can form marketing themes
• Identify the most compelling IP-based applications andservices for the SMB market
• Chart the Buying Process for SMBs, focusing on purchasingcriteria and motivations
• Determine the overall opportunities in the followingemployee-size segments: 1-4, 5-9, 10-19, 20-49, 50+
• Identify the the commonalties of the SMB market for webhosting
• Recommend pricing strategies for SMB market entry
• Identify sources of awareness for SMB Decision Makers
• Recommend a positioning strategy for Prodigy BusinessSolutions
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CM Methodology
Project KickoffProject Kickoff
Secondary ResearchSecondary Research
In-Depth InterviewsIn-Depth Interviews
Synthesis & AnalysisSynthesis & Analysis
Recommendations and Conclusions
Recommendations and Conclusions
• Set project schedule• Clarify Objectives• Brainstorming• Define Deliverables
Identifying Key Markets• Electronic Literature Search• Identify Existing Studies
Interviewed Decision Makers &Influencers in Small & Medium SizedBusiness nationwide.
BuildingFactBase
Develop SegmentProfiles via CaseStudies
Weekly Status Meetings
Deliverables• Executive Briefing• Presentation• 3 Case Studies• Contact Database• Interview Journal
Deliverables• Executive Briefing• Presentation• 3 Case Studies• Contact Database• Interview Journal
Contact Sources: Interviewees wererandomly selected from Dun & Bradstreet’sDatabase of U.S. Businesses from amongfirms with under 100 employees and acrossall industries as well as yellow pages.
Contact Sources: Interviewees wererandomly selected from Dun & Bradstreet’sDatabase of U.S. Businesses from amongfirms with under 100 employees and acrossall industries as well as yellow pages.
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Contact List - 55 SMBs Interviewed
Size Holdouts (4) Novice (21) Sophisticated (30)
1-4Employees
(16)
⟨ CunninghamCleaners, DavidLink, Principal
⟨ Nick’s Shoe Repair,ElizabethSantangelo
⟨ Sacks Tailor Shop,Richard Sabato,Owner
⟨ City Eyes Vision Gallery, Ted Joseph, Owner⟨ Hoosier Cleaners Steve Principal, Owner⟨ Kennedy Studios, Winnelle Kennedy, Owner⟨ Photographic Images Melinda Gordon,Owner⟨ Georgia Fast Tax, Inc.,Robert Daniel, President⟨ S/W Crafts, Marie Emmons, President⟨ Beauty Source Adolfo Alba, President⟨ Aavcom LTD., Bill Lawrence, President⟨ Professional Modification Services Estela Cruz, President
⟨ A & O Engineering Inc., Greg Orphall, Mgr. Sales and Service⟨ Consumer Credit Counseling, Terry Grubb, Exec. Director⟨ Shattuck & Associates, Jeff Shattuck, Principal
5-9Employees
(12)
⟨ Baad & Associates, Randall Baad, Principal⟨ Aerospace Design and Development, Dr. H.L. Gier President⟨ Robert A. Schless & Co., Inc. Beau Schless, Principal⟨ Application Research, Inc, John Berner, President⟨ ARR Enterprises, Joy Gay, President
⟨ Pollock Consulting, Jane Pollock, Principal⟨ Stevenson & Associates, Alan Stevenson, President⟨ Dicks Carpet One Rug Warehouse,Caryln Green,Store Mgr.⟨ Moran Ashton Funeral Home, Peter Ashton, Owner⟨ Cover Story, Craig Cousins, Owner⟨ Impact Specialty Advertising, Melinda Owens, President⟨ Kahn’s Pharmacy, Mel Kahn, President
10-19Employees
(12)
⟨ Chase BeckMachine Corp,Arthur Beck,President
⟨ The Technology Group, Dr. E.A. Coleman, CEO⟨ Sobol Bosco & Associates, Daryl Sobol, Tax Associate⟨ Sungro Chemical, Inc. Harold Igdaloff, President
⟨ Strategic Alliances Group, Beatrice Kohn, Office Manager⟨ Hexter & Associates, Fran Richards, Office Manager⟨ Cislunar Aerospace, Dave Banks, CTO⟨ DYS Analytics, Yuvai Shimoni, President⟨ Geobiotics, Jay Pickarts, Technical Marketing Manager⟨ A Plus Machining and Manuf., Barbara Dutton, Office Mgr.⟨ Abatement Technologies, Inc., Jim Bowers, Marketing Mgr.⟨ Kushner & Co., Brenda Williams, Admin to Gary Kushner
20-49Employees
(13)
⟨ E.R. Roland & Associates, Wayne Smith, Principal⟨ Mulgrew Aircraf, Dave Mulgrew, Sales Manager / President⟨ Royal Plastics Manufacturing, Robbie Wimmer, MIS Manager
⟨ Spero-Smith Investment Advisors, Andrew Smith, Pres.⟨ Public Affairs Information Service, Debra Brown, Exec. Dir.⟨ Marketing & Advertising Svcs Center, Gary Bacchetti, Pres.⟨ Dynamic Concepts, Inc., Mary Washington, Business Admin⟨ CE Corporation, Darin Gemereau, Eng. and Intranet Admin⟨ Metals Technology, Walter Hayes, CEO⟨ Benefit Management Design⟨ Rooney, Plotkin & Wiley, Williman Stevens, Managing Partner⟨ Access Direct, Steve Danoff,⟨ Advanced Data Systems, Nathan Lunney, Dir. Marketing
50+Employees
⟨ Picometrix, Inc. Rob Risser, CEO. ⟨ Rayvern Lighting Supply Co. Inc., Helen Anderson, President⟨ Unicare Corporation, Matt Brent, Web Master
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Respondent Profile
Respondents by Company Size
1-427%
5-922%
10-1922%
20-4924%
50+5%
Respondents by Level of Sophistication
H o l d - o u t s7%
Novice38%
Sophisticates55%
15
1212
13
3
4
2130
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How did we characterize respondents?
Hold-outs: No Email, Access or Website
Novice: Email and Access Only
Sophisticate: Email, Access AND a Website
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Roadmap
Introduction
FindingsFindings
Conclusion
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High Level Findings
Prodigy PositioningPurchase Decision Makers
Purchase Influencers
• Key driver is to be perceived as “on theforefront”
• Heavily influenced by Friends & BusinessAssociates
• Key driver is to be perceived as “on theforefront”
• Heavily influenced by Friends & BusinessAssociates
• <5 employees: Owners, Presidents andCEOs are the IP Champions.
• >5 employees: Web-savvy employees,Managers with designated webresponsibility.
• <5 employees: Owners, Presidents andCEOs are the IP Champions.
• >5 employees: Web-savvy employees,Managers with designated webresponsibility.
• <5 employees: the “easy-to-do-business-with” or “hassle-free”ISP offering “wizard- or template-based web hosting solutions.”• 20-49 employees: “a trusted, reliable and long-standing onlinebusiness solutions partner” offering “online business-in-a-box”solutions.”• “be on the forefront” “don’t be left behind” “join the club”
• <5 employees: the “easy-to-do-business-with” or “hassle-free”ISP offering “wizard- or template-based web hosting solutions.”• 20-49 employees: “a trusted, reliable and long-standing onlinebusiness solutions partner” offering “online business-in-a-box”solutions.”• “be on the forefront” “don’t be left behind” “join the club”
Best “Fit” Opportunities
• Low price, no risk Access for Holdouts• Better service, better brand for Novices with
10-49 employees
• Low price, no risk Access for Holdouts• Better service, better brand for Novices with
10-49 employees
• Internet literacy correlated closely with company size. Companies with more employeeswere more literate. Internet illiteracy was generally confided to companies with < 5employees .
• Respondents were eager for more information and were planning further investments in IPservices.
• Killer Applications continue to be Email and Internet Access.• Pricing Sensitivity to upfront, setup costs: less price sensitivity for value-added services
Key Findings
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High Level Findings (continued)
Strong evidence that small businesses are adopting many of the same technologies to remaincompetitive. However, more education is needed about the strategic importance of the Internetthrough a basic, staged product offering (or Learning Path) are key to establishing and retainingcustomers.
Top reasons SMBs use the Internet:•Faster communications with customers, suppliers, and employees•Access to information resources•Better customer service•Lower advertising costs•Increased visibility and broader geographic marketing coverage via web site•Improved competitiveness against other firms, both large and small•Higher sales through expanded markets and new business opportunities
Top challenges to implementation:•Finding the time to implement the solution, and the money to pay for it•Adjusting business practices to accommodate new systems•Choosing solutions that can easily accommodate growth
Ran
ked
Ran
ked
Ord
erO
rder
Ran
ked
Ran
ked
Ord
erO
rder
Implication to Prodigy: To resonate with SMBs messages should highlight TopReasons & Top Challenges.
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Business Improvement: Why do SMB decide to put up a Web Site?
Reasons for Going Online Reported by SMBs
30 30
25
20
15 15
0
5
10
15
20
25
30
35
New
Cu
sto
mer
s
New
Rev
enu
es
Imp
rove
Cu
sto
mer
Ser
vice
Rai
seA
war
enes
s
Ext
end
Rea
ch
Pro
du
ctiv
ity
Reasons For Going Online
Nu
mb
er R
esp
on
ses
Top 3 ReasonsSMBs
Go Online
Source: CM Interviews
To acquire new customers
To grow new revenue steams
To improve customer service
To acquire new customers
To grow new revenue steams
To improve customer service
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SMBs report a 3 Phase Adoption Process
Source: CM Interviews
Phase 1: ACCESS
Company doesn’t wantto be left behind the
times and goes onlineto see what it’s all
about
Phase 1: ACCESSPhase 1: ACCESS
Company doesn’t wantto be left behind the
times and goes onlineto see what it’s all
about
Phase 2: CONTACTCompany understands
the improvedcommunications with
customers andvendors
Phase 2: CONTACTPhase 2: CONTACTCompany understands
the improvedcommunications with
customers andvendors
Phase 3: COMMERCECompany understandsstrategic value of the
Internet & hasallocated resources to
execution of onlinesales strategy
Phase 3: COMMERCEPhase 3: COMMERCECompany understandsstrategic value of the
Internet & hasallocated resources to
execution of onlinesales strategy
SMB Internet Migration PathSMB Internet Migration Path
• New Revenue• Better
Communications• Information
• New Revenue• Better
Communications• Information
• Buy & Sell• Email• WWW
• Buy & Sell• Email• WWW
Activities
Benefits
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Who Are the Decision Makers?
IP Champion & Decision Maker
97
2 3 3
3
9
10
3 2
3
1
0
2
4
6
8
10
12
14
16
1-4 5-9 10-19 20-49 50+
Firm Size Category
Nu
mb
er o
f F
irm
s
Owner Designated Responbility Web Saavy Employee No Champ
Ad hoc DesignatedNo Clear Vision Clear Vision
Decision ContinuumSmallFirms
LargeFirms
Source: CM Interviews
Key Decision Makers &Influencers
• Smaller Firms: Ownerand/or President
• Larger Firms:DesignatedResponsibility
Key Decision Makers &Influencers
• Smaller Firms: Ownerand/or President
• Larger Firms:DesignatedResponsibility
Owner isChampion
Owner isChampion
Sales &Operations
are theChampions
Sales &Operations
are theChampions
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How Much Do SMBs Typically Spend on Internet Services?
Average Monthly Expenses for SMB Novices
$20 $31 $29 $27
$650
$0
$100
$200
$300
$400
$500
$600
$700
1-4 5-9 10-19 20-49 50+
Firm Size CategoryD
olla
rs $
1-4 5-9 10-19 20-49 50+
Source: CM Interviews
Average Expenses for SMB Sophisticates
$22$56
$516
$209$240
$0
$100
$200
$300
$400
$500
$600
1-4 5-9 10-19 20-49 50+
Firm Size Category
Dol
lars
$
1-4 5-9 10-19 20-49 50+
Novices typically spendbetween $20-$55/mo. onInternet Services. Companysize is not a factor
Novices typically spendbetween $20-$55/mo. onInternet Services. Companysize is not a factor
Sophisticates typicallyspend between $22-$240/mo. on InternetServices. Company size isa key factor.
Sophisticates typicallyspend between $22-$240/mo. on InternetServices. Company size isa key factor.
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Penetration of Internet Services by Sophistication Level
60%
33% 32%
0%
10%
20%
30%
40%
50%
60%
Pe
rce
nta
ge
of
Em
plo
ye
es
Us
ing
Te
ch
no
log
y
% w/ Computer % w/ Email % w/ Access
Technology Used
Novices: Technology Penetration
% w/ Computer % w/ Email % w/ Access
72%
66%66%
62%
63%
64%
65%
66%
67%
68%
69%
70%
71%
72%
Pe
rce
nta
ge
of
Em
plo
ye
es
Us
ing
Te
ch
no
log
y
% w/ Computer % w/ Email % w/ Access
Technology Use
Sophisticates: Technology Penetration
% w/ Computer % w/ Email % w/ Access
Source: CM Interviews
% of Employees with Computers:
Hold-outs 42%Novices 60%Sophisticates 72%
% of Employees with Computers:
Hold-outs 42%Novices 60%Sophisticates 72%
% of Employees with Email &Internet Access:
Novices 33%
Sophisticates 66%
% of Employees with Email &Internet Access:
Novices 33%
Sophisticates 66%
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What do SMBs Desire as Applications?
51 51
37
30 30
20
10
0
10
20
30
40
50
60
Nu
mb
er o
f R
esp
on
ses
Em
ail
Acc
ess
E-C
om
mer
ce
Web
Ho
stin
g
IP T
elep
ho
ny
IP F
ax
Bac
kup
/Rec
ove
ry
Top Application Requirements
The TopApplication
Requirements
#1 Email & Internet Access(tied)
#2 E-Commerce
#3 Web Hosting & IP Telephony
#1 Email & Internet Access(tied)
#2 E-Commerce
#3 Web Hosting & IP Telephony
Source: CM Interviews
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What are SMB Preferences for Outsourcing of Web Hosting?
0
3
0
7
3
5 5 5
2
00
1
2
3
4
5
6
7
Nu
mb
er o
f F
irm
s
1-4 5-9 10-19 20-49 50+
Firm Size Category
Insourcing Vs. Outsourcing
Preferences (n=30)
Internal Outsourced
Source: CM Interviews
Top 3 Reasons SMBNovices & SophisticatesOutsource IP/IT Services
• No time to develop or maintain internally• No relevant skills sets or personnel• Not enough knowledge of options, solutions
& technology
• No time to develop or maintain internally• No relevant skills sets or personnel• Not enough knowledge of options, solutions
& technology
• Smaller Respondentsare more likely tooutsource
• Larger Respondentsare more likely todevelop & manageweb sites internally
• Smaller Respondentsare more likely tooutsource
• Larger Respondentsare more likely todevelop & manageweb sites internally
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What are the Outsourcing & Pricing Preferences of SMBs?
1 1 1
2 2
3
1
3
1
5
0 0 0 0 00
0.5
1
1.5
2
2.5
3
3.5
4
4.5
5
Nu
mb
er o
f F
irm
s
1-4 5-9 10-19 20-49 50+
Firm Size Category
To Whom are Web Site Project Outsourced?
ISP Web Designer Web-Savvy Friend/Employee
N=20N=20
ISPs, Web Site DesignConsultants, and Websaavy friends are allcommonly used foroutsourcing.
ISPs, Web Site DesignConsultants, and Websaavy friends are allcommonly used foroutsourcing.
• Template-driven Site Hosting Under $20/mon.• RapidWeb Site $25/ Setup
$25/mon.• Transactional Web Hosting $50/Setup
$100/mon.• Design Services & Consultation $100/hour
Dial-up access not included in pricing.
• Template-driven Site Hosting Under $20/mon.• RapidWeb Site $25/ Setup
$25/mon.• Transactional Web Hosting $50/Setup
$100/mon.• Design Services & Consultation $100/hour
Dial-up access not included in pricing.
Expected
Price Points
Top Web Site Creation Tools
# 1 ISP’s Site Template (50%) #2 Front Page (35%) #3 HTML Coding (15%)
Top Web Site Creation Tools
# 1 ISP’s Site Template (50%) #2 Front Page (35%) #3 HTML Coding (15%)
Source: CM Interviews
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How Satisfied are SMBs with their Incumbent Internet Solutions Provider?
“We are very satisfied with our ISP (a local phone company). We don’t have much of a need for the internet, just tocheck email and do some minor research, and I wouldn’t even think of switching to another ISP because I don’t thinkthat they could offer us anything that we don’t already get – and for only $15 a month. So, A Ten”
(Greg Orphall, A&O Engineering, Sales Manager)
I love what’s been happening for me since I got this AOL account. I owe most of my new business to them. Satisfied?Yes, I’m extremely satisfied!”
(Dr. E.A. Coleman, CEO, The Technology Group)
We don’t have any need for additional services, and Blue Grass is doing a everything that we could possibly expector even want for such a basic connection. We’re very satisfied with what there doing for us.”
(Wayne Smith, E.R Ronald & Associates, Architectural Design)
0
10
20
30
40
50
#
Respondents
Low High
How satisfied are you with your existing ISP?
Respondents generally report high satisfaction with their ISPs but do not expect much .Respondents generally report high satisfaction with their ISPs but do not expect much .
Source: CM Interviews
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Top ISP Selection Criteria
51
45 45
40
3027
25
20
1513 12 11
0
10
20
30
40
50
60
# o
f R
esp
on
ses
Ava
ilab
ility
Cu
sto
mer
Ser
vice
Rel
iab
ility
Bill
ing
Rec
om
men
dat
ion
Tim
e in
Biz
Sec
uri
ty
Bre
adth
of
Off
erin
g
Pri
ce
Au
dio
/Vid
eo
Tec
h S
up
po
rt
Fro
ntP
age
Purchasing Criteria
Source: CM Interviews
Top 3 SelectionCriteria Reported
by all SizeCategories &
SophisticationLevels
#1 Availability of Service# 2 Customer Service &
Reliability of Service#3 Billing Accuracy
#1 Availability of Service# 2 Customer Service &
Reliability of Service#3 Billing Accuracy
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Other research supports these findings
31%
39%
47%
47%
51%
59%
59%
63%
70%
85%
86%
88%
93%
96%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Reliability
Performance
Technical Support
Price
Knowledgeable Customer Support
Full-service Provider
Security Services
Managed Connectivity
Size/Financial Stability of ISP
Web Site Hosting
Quality of account mgmt.
Number of years ISP has been in Business
Audio/Video Streaming
Value-added Services
Reliability, Performance, Support & Price are the top swing factors when selecting an ISP
Source: TeleChoice Survey of 1,308 network and IT managers.*
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Customer Service/Support was the #1 Internet Application for SMBs
4035
25 25
16
05
10152025303540
Nu
mb
er o
f R
esp
on
ses
Cu
sto
mer
Su
pp
ort
E-C
om
mer
ce
Co
mm
un
icat
ing
w/ V
end
ors
Co
mm
un
icat
ing
w/ C
ust
om
ers
LA
N
Application Area
Top Applications Considered Very Important to Continued Business Success
Top ApplicationsReported by all SMB
Size Categories &Sophistication Levels
#1 Customer Support &Service
# 2 E-Commerce#3 Communication w/
Vendors & Customers
#1 Customer Support &Service
# 2 E-Commerce#3 Communication w/
Vendors & Customers
Source: CM Interviews
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4
13
30
12
10
1
7
1
11
17
16
11
143
4
12
4
2
5
15
2
5
10
0
5
10
15
20
25
30
35
40
45
50
Nu
mb
er o
f R
esp
on
ses
AO
L
Co
mp
uS
erve
Ear
thlin
k
Min
dsp
rin
g
Pro
dig
y
Ver
io/B
est
AT
&T
IBM
MC
I/Wo
rld
Co
m
ISP Awareness Levels
Hold-outs Novices Sophisticates
ISP Mindshare
Novice awareness1) AT&T2) AOL3) Prodigy4) Mindspring
Sophisticate awareness:1) AOL2) Mindspring3) IBM
Novice awareness1) AT&T2) AOL3) Prodigy4) Mindspring
Sophisticate awareness:1) AOL2) Mindspring3) IBM
Source: CM Interviews
For these Respondents incumbentISPs tended to be local or regional
No ISP has succeeded in building strong mindshare with Hold-outs.
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What are the Favorite Sources of Information about Technology?
30
40 4035
05
10152025303540
Nu
mb
er o
f R
esp
on
ses
Dir
ect
Mai
lC
atal
og
s
Tra
de
Pu
blic
atio
ns
Fri
end
s
Bu
sin
ess
Ass
oci
ates
Source
Favorite Sources of Information
Source: CM Interviews
Favorite & MostTrusted Sources ofInformation aboutTechnology for all
SMB categories
# 1 Friends & TradePublications
# 2 Business Associates# 3 Direct Mail
# 1 Friends & TradePublications
# 2 Business Associates# 3 Direct Mail
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Bundling Opportunities for Prodigy
ServiceElements
Near - Term(<12 months)
Mid - Term(12-24 months)
Long - Term(> 24 months)
Email X X X
Web Hosting X X X
Remote Backup& DisasterRecovery
X X X
IP Fax X X X
IntelligentMessaging X X
IP Video X X
IP Telephony X
VPN X
Implication to Prodigy:Partnering will be essential to meet the needs of these customers
Implication to Prodigy:Partnering will be essential to meet the needs of these customers
Source: CM Interviews
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Roadmap
Introduction
Findings
ConclusionsConclusions
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Conclusions and Recommendations
For Holdouts:• Swiftly provide seminars, edutorials and special offers focused on Access and Email as the holdout market is ready to develop.• Provide “ in the box trials” with major PC manufacturers.• Form distribution partnerships with Industry Associations, Office Supply Stores, and Buying Clubs e.g. Costco or Sams.For Novices:• Target Novices in the 10-49 Employees Size Range• Offer hosting bundles to induce Novices to switch ISPs.• Establishing a trust relationship by providing a Web Roadmap and becoming a trusted source of information.• Position as the user-friendly “Small Business Internet Solutions Partner”• Establish an online trading community and value network that drives traffic from Prodigy Internet accounts onto a “Prodigy Mall” featuring
web hosting SMB accounts• Develop a “unified messaging” infrastructure to sell into PAIN (E-mail & communications overload)For Sophisticates:• Eventually SMBs will join the E-commerce Bandwagon. Prodigy will need to support this trend to be able to retain these accounts.• Small business are starting to be approached by DSL and cable modem solutions that offer near T-1 speeds for between $40-100/month.
Prodigy will need for formulate a response to this.
Solutions Pricing• Short-term (6mon.): RapidWeb 2-5 pp. site, 10 Pop E-mail and 2-hour consultation free for 2 months and priced at $50/monthly thereafter
• Long-term (12 mon.):Unified Communications Strategy: “UNIFIED MESSAGING BUNDLES” have the greatest appeal to SMBs with “E-mail &Voice mail Nightmares”
Alliances• Partner aggressively with ISVs, OEMs and Telcos to jointly develop & co-market integrated online office solutions
Positioning• Prodigy should position itself as the “easy-to-business-with” or “hassle-free” ISP offering “wizard- or template-based web hosting
solutions.”
• Prodigy should position itself as “a trusted, reliable and long-standing online business solutions partner” offering “online business-in-a-box” solutions.”
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Golden Nuggets