Morphing a Consulting Business to a Cloud Computing Product Company: Bill Loumpouridis, CEO of EDL (Part 7)

Sramana: Are the increased e-commerce metrics experienced by LI-COR a direct result of their use of CloudCraze?

Bill Loumpouridis: Yes. They have used CloudCraze in a manner that has allowed them to focus on their business, not on running an e-commerce architecture and the associated challenges.

Sramana: What model do you follow in the use case provided? Does LI-COR pay a subscription fee?

Bill Loumpouridis: There is an initial setup fee as well as an ongoing subscription fee.

Sramana: What is the pricing model?

Bill Loumpouridis: The pricing depends on the scope of the project. In the Java world with Comergent, a typical project for us would be $500,000 to $1 million in services. Large enterprise e-commerce projects would easily run into the multi-million dollar range for services. Most of the proposals we are doing now are for 10 to 15 percent of the cost that the legacy Java technology solutions would have cost.

Sramana: Is the 10 to 15 percent the integration cost for CloudCraze?

Bill Loumpouridis: Yes. If you are a client of ours you will receive a million dollars of value at a cost of $100,000.

Sramana: Integration costs are significantly lower than legacy systems. Are you still doing legacy integration work?

Bill Loumpouridis: We are, simply because of the nature of e-commerce. Business still need to connect to ERP systems and accounting systems. E-commerce systems do not stand alone; they have to be wired to legacy systems. There is some effort required to drop the solution into a legacy environment and have fluid operations.

Sramana: What is the size of your typical customer?

Bill Loumpouridis: We are seeing shorter sales cycles in the mid-market. We consider mid-market to be $100 million to $300 million in revenues. There is a screaming need for enterprise e-commerce in the mid-market, and it is largely unfulfilled because until now it has been too expensive. Businesses in the mid-market have the same complexity as their larger cousins. We are able to provide mid-market companies with millions of dollars of value at a hundred thousand dollar price tag.

Sramana: Who is your competition? Who else is targeting that market segment?

Bill Loumpouridis: We run into companies like Demandware and iCongo. We occasionally run into Microsoft products hosted by IT organizations. In that case we are breaking through the IT departments’ internally hosted Microsoft solutions. It takes vision and courage for those shops to break out of the Microsoft mode. E-ecommerce to the power of CRM is unprecedented, and right now we are the only one who has that solution.

Sramana: What do you mean when you say “e-commerce to the power of CRM?”

Bill Loumpouridis: We are native on the Force.com platform. We share the same data objects as the CRM system. If you are using Salesforce CRM, then there is no reason to create another silo. The product data and the customer data are already there. Why replicate that in another cloud?

Sramana: From Salesforce’s perspective, having you as an extension of their CRM system means all of their customers who are in the B2B e-commerce space, such as manufacturers catering to value-added resellers and retail customers, are all potential clients for you. Is it just an extension of their current deployment to get into your product?

Bill Loumpouridis: Exactly. We are on the same platform and share the same data objects.

Sramana: How many customers that fit your target profile does Salesforce have?

Bill Loumpouridis: That number grows every day. Right now it is in the tens of thousands.

Sramana: So you can get into those tens of thousands of companies with little acquisition cost?

Bill Loumpouridis: Yes.

Sramana: Great. Good luck; you should have a very good run for the next few years.

This segment is part 7 in the series : Morphing a Consulting Business to a Cloud Computing Product Company: Bill Loumpouridis, CEO of EDL
1 2 3 4 5 6 7