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Net prophet: software vendor's online success

Net prophet: software vendor's online success

If you doubt the power of the Internet to transform business, just talk to Jim Luty. The president of Innovative Software (www.innovativesoftware.com) in the US, Luty used the global reach of the Internet to take his business from zero to $US2 million in monthly revenue in less than two years. Luty has been in the computer industry since the early 1980s and describes himself as "half-tech, half-salesman".

Luty was technical enough to recognise the value of a program for quickly copying hard drives when a friend showed it to him in June 1996. He figured this utility, called Ghost, would be extremely useful to anyone who had to install Windows 95 on more than a few machines at once. You could install everything you needed on one hard drive, then create an exact replica on a second system in just a few minutes.

Luty contacted the developer of Ghost, Murray Haszard, in New Zealand and in short order was reselling Ghost from the back of his house in the US.

At first, Luty tried to drum up interest on CompuServe without much success. So he checked out the Internet. He stumbled onto Usenet search engine Deja News (www.dejanews. com), where he found many people asking how to install Windows 95 onto multiple systems quickly and easily.

Luty built a simple Web page describing Ghost, including a demo version of the program for people to download, and then posted a seed message to the newsgroup where he had seen the questions asked, directing people to his brand new site.

The phone started ringing. IT managers around the world had a need for Ghost, and Luty had found a way to reach them. By September 1996, Luty was generating $US20,000 per month in revenue, with customers as far apart as Honda of Canada, a Tasmanian police department, and Harvard University.

When Haszard decided to go back to developing full-time, he turned his retail operation over to Luty, who hired a couple of salespeople and moved into a 500-square-foot office space in November. By the end of the first month, Innovative Software had done $US200,000 in sales. "I was like that guy in Jaws where he looks at the shark and says, 'I think we need a bigger boat,'" Luty recalled.

Currently, Innovative Software gets 1200 phone calls and an equal number of downloads every day from its Web site. Ghost is used by 55 per cent of Fortune 500 companies and many other organisations. Luty himself is now worth $US10 million.

The Internet was and is a critical component of Innovative's business strategy.

"The typical tech is going to turn to the Net if he needs a quick answer," Luty said. By planting seed questions in Usenet newsgroups, and by maintaining an information-rich Web site where people can download the program, Innovative Software ensures that its product reaches the right audience. "If you took away my Web pages tomorrow, my revenue would probably diminish down to nothing in about two months," Luty said.

Sometimes Luty still can't believe how well his strategy has worked. At a recent meeting in the Bahamas with his eight international distributors, he marvelled at his good fortune.

"I can't believe I'm sitting here in the Bahamas," Luty remembered saying. From Usenet to the Bahamas - not a bad trajectory for two years of I-commerce.


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