zdnet.com
Next came the consolidation of ESD service providers. A recent
example is Netsales Inc., an e-commerce company in Overland Park,
Kan., which sold off its ESD operation to Digital River. The deal,
which took place in August, lets Digital River tap Netsales' customer
base. "We've taken their client list and incorporated it into our
system," Kerutis says.
Scale—as measured by the number of customers and software
publishers jumping on one's ESD bandwagon—was a key factor in
the Netsales transaction. "In order to be successful in a new industry,
you have to have scale," Kerutis observes. "For someone to start a
business, it's an uphill climb." Digital River claims to have more than
100,000 digital products in its inventory. As for Netsales, it now will
focus on hosting e-commerce storefronts.
.... Other ESD players find the advice business a ripe area for expansion. Digital River, for example, is expanding into B2B
e-commerce consulting services. The company helps customers develop and launch their e-commerce business models. But
perhaps the biggest push among ESD providers is electronic license delivery—in which ownership rights to software are
purchased and delivered electronically.
.....
Symantec's Seelinger notes that her company's Norton AntiVirus and Norton Internet Security products have done well as ESD
titles. She cites the products' smaller footprints and general appeal to customers who spend a lot of time online as factors in that
success. "We continue to be big proponents of the ESD delivery model where it's appropriate, given bandwidth and application
size," she says.
.....It's no wonder. International Data Corp. (IDC) projects that electronic licensing delivery will rake in about $70 billion in
revenue worldwide this year, while ESD will fetch about $1 billion. In 2002, electronic license delivery will represent a $140
billion market, while ESD will reach about $5 billion. |
