Artisoft prepares for new battle

Artisoft prepares for new battle

There is barely a networking vendor - hardware or software - that won't tell you the small to medium enterprise (SME) marketplace is the growth area for 1997. With the Internet continuing to popularise the general notion of networking, and the enterprise marketplace providing few fresh business opportunities, the small office looks set to be the new battleground.

Hence it is small wonder that Novell is numbered among those companies pushing into this marketplace, with the launch this month of IntranetWare for Small Business (formerly code-named "Kayak"). (See story page 49). For Novell, this is its third push into the small business marketplace, following the failure of NetWare Lite and Personal NetWare to capture any great swathe of the market.

But it doesn't come into the marketplace uncontested. Artisoft has been staking its claim in the world of small business networking for eight years.

And it is not taking the challenge from Novell lying down. According to Artisoft managing director David Hudson, if history is anything to go by, Artisoft is even looking forward to the new competition. "The strongest period of growth we ever had was after the release of NetWare Lite, because previously to that we were the only well known company that was pushing peer-to-peer networking. NetWare Lite came out, and our sales skyrocketed.

Big opportunities

"It happened again with Windows for Workgroups, where again we had a fairly strong surge in sales. And based on history, maybe Kayak will lend itself to us again, in terms of legitimising small business networking."

Hudson says the SME market makes up 95 per cent of the business community, and so is not surprised that Novell is seeking a piece of the action. "I think it's very wise of Novell to try and move into our market, because that's where all the growth is. Every user at the top end has a network - all they are going to do is upgrade, and Microsoft has been more successful than Novell in trying to get people to upgrade across to them.

"So if Novell is going to have any growth, they have to do it at this end of the market. We estimate that 50 per cent of businesses at this end do not have networks, but I would bet that more than 50 per cent of that per cent have PCs. So there's capacity for enormous growth."

Hudson says Artisoft anticipated renewed competition in its market some time ago, and took steps accordingly. The most obvious is its move away from being a single product developer. In addition to the flagship LANtastic product, Novell now carries a range of network-centric small business applications.

"The philosophy behind what we're doing these days is very similar to what Microsoft has done," said Hudson. "The OS companies have tried to take their OS and put as much in it as possible to boost its value against their competition. And we saw that, and thought that since Microsoft is our number one competitor with Windows 95, let's do the same thing.

"So we went out and acquired or developed as many technologies that we thought small businesses would actually use as opposed to throwing them and seeing if they'd use them." Those products now include a package for modem sharing within an office (ModemShare), an e-mail package for internal and external mail (XtraMail), an Internet sharing application (i.Share) and a remote access package (CoSession Remote). They are sold either as stand-alone packages, or bundled for free within LANtastic.

"I think that our product has a better set of features than Novell's product does," said Hudson. "Adding to that, our product is still considerably lower in price - at $649 for 10 users it's about half the price of their full price product, and about 30 per cent less than the price of their upgrade."

Hudson says Artisoft is having great success in selling those products into sites that are not LANtastic users. "We would rather they use LANtastic, but if they've already made the choice to go with another NOS there's no point whingeing about it - we'll just find something else to sell to them."

He stresses though that these new products do not represent a move away from Artisoft's commitment to LANtastic. "It certainly is not an abandonment of LANtastic, just a diversification, which is sensible for a company to do."

While much of the attention in the SME market will focus on the choice being made by users, another battle will take place for the loyalty of resellers. Hudson says Artisoft has been selling LANtastic in Australia for eight years now, and in that time has built a very large and very loyal reseller base. At the same time so has Novell, but as its base is more accustomed to operating in larger client sites, the possibility exists that it may try to woo some of Artisoft's reseller base away.

Hudson believes Artisoft can fend off any challenge. "We have a loyal base of resellers that have sold our products against Windows 95 and against full NetWare, and will continue to sell against Kayak, so it's not as if anything's going to change in our channel.

Strengthening the channel

"Naturally we hope to get growth, and we hope that the growth will come from all of these people that are inquiring about i.Share and ModemShare and XtraMail, and then we'll be able to get resellers to channel those users back to LANtastic."

To add extra incentive to remain loyal, Artisoft is also about to revamp its Australian Partner Alliance Program. Already it has appointed Marketing Results to handle distribution into retail chains, but other resellers can expect to see the benefits of its revamped program.

This will feature cooperative marketing programs as well as increased pre-sales and technical support. In order to qualify its reseller base Artisoft is running a new accreditation program, involving either self-paced training manuals or training seminars, with certification commencing in March.

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