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Then a Concierge employee told CEO Carlos Fierro about Agillion. The Austin (Tex.) company runs a Web service for small outfits that can't afford to set up their own customer-service software. Agillion's CustomerPages allow Fierro to offer his clients their very own personalized Web page. Rather than wait on hold to speak with a Concierge staffer, the client can request a dry-cleaning pickup by typing it onto the Web page. The concierge receives an e-mail on his pager letting him know a service has been requested. Clients can go back to the Web page later to see if their clothes have been delivered, and let Concierge know if they're satisfied. For its part, Concierge might post helpful hints like restaurant recommendations based on client preferences, or offer headline news and links to Web sites that match clients' interests. Agillion and its 130 employees handle the tricky stuff like storage, security, and systems management, so its customers don't have to worry about keeping the software up and running. All they need to use the software is a PC and a Web connection. The cost to Fierro: a mere $29.95 a month, compared with about $60,000 that he probably would have paid to develop his own Web system. "The stuff is simple, and it's affordable," says Fierro. "It saves us a lot of time, and that saves us money." "WAVE OF THE FUTURE." For Agillion and others like it, the market potential is huge: Customer-relationship management is a $12 billion business today. The Web-based segment, where Agillion plays, is growing by 30% a year, according to Yankee Group, a Boston-based research firm. Because downloading customer-management software as a service over the Web is so new, research firms are still trying to get a handle on the market's size. "The one thing we know is that getting these services over the Web is the wave of the future," says Yankee Group analyst Sheryl Kingstone. Agillion's co-founders saw the same thing in their crystal ball. Chairman Frank Moss and CEO Steve Papermaster created the company two years ago because they were convinced that the future would be affordable, downloadable software -- not packages licensed for huge lump sums. "All you need is a browser to access this incredibly powerful software that was once completely out of reach," Papermaster says. "We see enormous potential." Both Moss and Papermaster hail from old-fashioned software backgrounds: Moss built Tivoli Systems into a multimillion-dollar powerhouse that was acquired by IBM in 1996 for $743 million. Papermaster founded software-services company BSG Corp., which he sold to Per Se Technologies in Atlanta for more than $350 million in 1996. About 3,000 companies, most with just a handful of employees, are taking a free 90-day test drive of Agillion's software. The company wouldn't say how many paying clients it has but knows it will have to find new ways to reach small-business customers, such as partnerships with bigger-name software makers. THE SCRAMBLE FOR CUSTOMERS. In October, Agillion joined forces with IBM to provide CustomerPages with Big Blue's WebConnections service, which charges small businesses a monthly fee for their hardware, software, and online storage for the Web pages. Agillion earns an undisclosed percentage of the monthly fee. The startup expects this and other deals with Office Depot, Cisco Systems, and Click Action to help it sign on more than 250,000 customers by yearend. Agillion may have a promising product that helps make small businesses more efficient -- but so do plenty of others. Dozens of startups offer downloadable "customer care" software, including Sales.com of San Mateo, Calif., Jamcracker of Sunnyvale, Calif., and vJungle of Redmond, Wash. "It's going to be a marketing game in the end," says Yankee's Kingstone. "Right now it's about who can sign up the most customers the fastest. He who has the most penetration is going to win." Analysts say it's too soon to tell who is ahead. "This is a very young market, and everyone claims to have the most customers," Kingstone says. "Who will be standing a year from now is anybody's guess." TOUGH SELL? But reaching those customers is not easy. Agillion has raised $40 million from investors such as Goldman Sachs, Morgan Stanley, and Chase Hambrecht & Quist, to help it woo the small fry of the corporate world. But these companies are traditionally more difficult to reach because they come and go faster, keep a lower profile, and are slow to adapt to new technology. "The small-business market was billed as the land of the low-hanging fruit, but Agillion is learning that it takes more than a Super Bowl ad to reach these customers," says Bill Martorelli, an industry analyst with Hurwitz Group in Framingham, Mass. "For most of them, this is all new, and Agillion is learning it has to do a clearer job of explaining what it does, and why people need it." Martorelli and other analysts say Agillion is overcoming its marketing challenges through partnerships like the one with IBM. And Papermaster is confident that once he can get the software into users' hands, he can get them to pay to keep it there. Concierge's Fierro, for one, says he can't imagine doing business without it. "Our clients expect white-glove service, and Agillion lets us provide it," he says. "I didn't know software could be so easy." Easy to use, yes. But the question for Agillion is whether it will be easy to sell. Hawkins covers technology from Austin for Business Week |
