Turning a Services Company to a $30M Product Company: Bridgeline Digital CEO Thomas Massie (Part 4)

Sramana: How do you compete in deals? What market do you target?

Thomas Massie: We offer a mid-market product. Our customers have revenues of a billion dollars or more, but our sweet spot is companies in the $25 million and up revenue range.

Sramana: In terms of the competitive landscape, whom do you compete with directly as well as indirectly in the segmented areas?

Thomas Massie: Nobody else has integrated all four categories into a single product suite. Adobe is trying to. They have acquired a CMS and an analytics piece, but those are disparate systems which have been bundled together. We see our competitors trying to bolt things together because of the direction that market is headed, but we are the only ones who have a fully integrated framework. That gives us a significant advantage because we share all user data, components, and libraries.

Individually, there are pieces. In the e-commerce world we compete against Demandware and Digital River. When it comes to the content management side of the business, we compete against companies like Open Text.

Sramana: How do you price your solution?

Thomas Massie: Our positioning has always been to create a Mercedes image, with rich features, but to price at the 60th percentile in the marketplace.

Sramana: What does that translate to in terms of dollars?

Thomas Massie: We are not the highest and we are not the lowest. We are just above the middle. The solution is a SaaS or dedicated services solution. It can range anywhere from $700 a month to as much as $3,000 a month in SaaS fees. If a client is buying a dedicated license and servers, then the solution will range from $20,000 to as high as $100,000 for all four modules.

Sramana: How many customers are using this product?

Thomas Massie: Today we have 453 customers. We have sold more than 700 licenses in the past four and a half years.

Sramana: Is your business today 100% product, or do you still offer services?

Thomas Massie: We do a lot of services. We provide all of the interactive and digital services around iAPPS. We build and develop mission-critical websites and online stores around our product suite. We have a large professional services team that is provides all the digital strategy, the web development, web store development, and the back-end systems integration services.

Sramana: How does your business break down between the product and the services components?

Thomas Massie: We are about 70% services and 30% software.

Sramana: How much of your services business is related to the product?

Thomas Massie: I would say that number is 80%.

This segment is part 4 in the series : Turning a Services Company to a $30M Product Company: Bridgeline Digital CEO Thomas Massie
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