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ATLANTIC MEDIA (www.aboutface.com).

Atlantic Media produces Web-based "facebooks"-graphical employee directories that the company builds and hosts for large law firms and other clients. Launched in November 1998, the company's subscription service--which carries a monthly price of $99.95 per company--evolved from an earlier facebook-creation product that customers installed on their own desktop PCs.

Even though the subscription version costs less and was easier to maintain, Atlantic Media founder Adam Grossman says his clients didn't instantly embrace the concept of remote hosting. "The reaction from customers was, ONo way are you going to manage our sensitive human resources data!' Instead, there was instant demand for an option whereby the software would be installed on a server within their organization, behind their firewall. Of course, that almost completely defeats the purpose of the ASP model." (For his "more paranoid" users, Grossman now offers a $6,995 intranet version that runs on a dedicated mini-server.)

Gradually, however, customers have figured out that it makes sense to outsource the whole employee directory application, Grossman says. "There's no installation hassle, no dreaded DLL conflicts, and the software can be deployed to a global organization as easily as to a single office."

The "sheer simplicity" of flat-rate subscription pricing also reduces customer resistance, he adds. And even though Atlantic Media charges the same $99.95 monthly fee regardless of a customer's size or employee count, Grossman points out that big customers are still profitable, because many of them pay for an optional photo-scanning service. "We charge $5 to scan an employee picture, and I'd say half of our new customers these days go for this option," he says. "On average, that brings in another $2,000 per customer up front, and maybe $200 more every year for scanning in new employees."

Marketing tactics: "We've tried online advertising with banner ads, but they've been a bust," Grossman says. "In fact, old-fashioned direct mail yields the best results. The other thing that has been terrific has been free listings we've received on ASP-related Web sites, such as www.webharbor.com. That site in particular generates the second-largest group of visitors. The first, of course, is Yahoo."

Grossman also notes that Atlantic Media "lets customers cancel their accounts online without having to call an 800 number--a small piece of customer service that makes customers feel comfortable, knowing they won't be locked into something." So far, he adds, "we have a 0% cancellation rate."

Development issues: In creating the Web-based engine for aboutface.com, Grossman says "we used our old, Windows-based product as a model, but wrote the ASP product from the ground up." Performance is a tough issue for browser applications, especially with Java code, he adds. "Java is a rich development environment, and it could have offered us the flexibility we lost with plain HTML. But we chose to limit our use of Java to just one component. In our case, we wanted to mimic the look and feel of the Windows Explorer with its nested folders, and that's where we used our Java quota."

Security is another "huge issue" for remote hosting, Grossman notes. "We spent a lot of time satisfying the need for security without making customers submit to a retinal scan every time they log in. We chose to include IP-based security, which automatically authenticates users when they're using computers on a corporate LAN. This lets them use our application as easily as they would any other, but it keeps out prying eyes."

Forecast: In two years, what percentage of Atlantic Media's revenues will come from ASP-related subscriptions? "At least 90%," says Grossman. "I'm betting the whole farm on it."

Adam Grossman, president, Atlantic Media, 15 Court Sq., Boston, Mass. 02108; 617/227-6090. E-mail: agrossman@aboutface.com.
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Title Annotation:Company Business and Marketing
Comment:ATLANTIC MEDIA (www.aboutface.com).(Company Business and Marketing)
Publication:Soft-Letter
Geographic Code:1USA
Date:Dec 31, 1999
Words:620
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