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Helping people work more effectively.

Helping people work more effectively. SMB SaaS Applications - that Create Long-Term Revenue. Thomas Furr CSO, Smart Online, Inc. confidential. Discussion Highlights Why does Microsoft charge for application usage but not for hosting and domain names?

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Helping people work more effectively.

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  1. Helping people work more effectively. SMB SaaS Applications - that Create Long-Term Revenue Thomas Furr CSO, Smart Online, Inc. confidential

  2. Discussion Highlights • Why does Microsoft charge for application usage but not for hosting and domain names? • How do Hosting companies increase Average Revenue Per User (ARPU)? • How do Hosting companies create a Long Term relationship with Customers? • High Growth Potential for Future Revenue

  3. Agenda • Smart Online Snapshot • Hosting Strategic Priorities • Compete with Microsoft OfficeLive • Increase Revenue Per User • Create Long Term Customers • Summary & Conclusion

  4. What makes us unique • Full suite of daily use applications and tools to start and operate a micro business (1 to 25 employees) • Partnered with Parallels to enable hosting customers to rapidly launch micro business applications to their business customers • Scalable multi-tenant infrastructure and business model that does not compete with hosting partners • Ability to offer industry specific vertical solutions • Low cost Software-as-a-Service (SaaS) solution

  5. Unique End-to-End Products • Accounting • General Ledger • Accounts Payable/Receivable • Electronic Invoicing • Financial Statements • Productivity Tools • Shared Group Calendar • Contact Management • Real-time Dashboards • Customizable Reports • Sales & Customers (CRM/SFA) • Sales Pipeline Tracking • Sales Projections and Forecasting • Customer Support • Request Tracking • Automated Customer • Communication • Business Tools • Business Plans • Job Description • Marketing Plans • Legal Forms and Letters • Human Resources Management • Employee Records • Time Tracking • Vacation Tracking • PTO Requests • Websites and E-Commerce • Website • Order Management • Distributor and Customer Management • Sales Compensation • Affiliate Integration • Campaign Management • Administration and Reports

  6. Unique End-to-End Products

  7. On-Demand Software-as-a-Service Statistics • International Data Corporation (IDC) forecasts that the on-demand market will grow at a 32% compound annual rate to $14.8 billion by 2011 • IDC polled 612 small businesses (less than 100 employees) in 2007: 1.3% already used a SaaS solution, 5.1% were planning to use a SaaS solution within the next 12 months, 16.2% were interested in SaaS solutions, 41.2% indicated no interest in SaaS applications, and 36.2% did not know or had no opinion on the topic. We expect the “no interest” and “do not know/no opinion” categories will decrease over time as SaaS applications move into new markets and verticals. • Access Markets International (AMI) Partners believes SaaS adoption is rising steadily in the United States among small (1-99 employees) and midsize businesses (100-999 employees). According to its estimates, 21% and 31% of respective small and midsize businesses use SaaS solutions, double the percentage of adoption in 2004.

  8. How do you compete with Microsoft OfficeLive? • OfficeLive provides free hosting, email, and domain names • OfficeLive charge for daily use applications • Ways to Differentiate today: • Leverage Parallels Application Packing Standard (APS) automation for rapid launch of new small business daily use applications • Price bundles that package hosting, website, daily use applications for customers

  9. How do you increase Average Revenue Per User (ARPU)? • Provide new offerings specific to Small Business needs • Provide industry specific vertical Small Business solutions • Hosting plus SaaS Small Business applications can increase ARPU substantially: • According Parallels for customers with an average of 8 employees this number can increase from $20 per month to $180 per month

  10. How do you create long term customers? • Provide low cost Small Business solutions that create efficiencies for your customers • Get the Data in the Applications – Salesforce automation, accounting, human resource management • Provide superior customer support

  11. Conclusions • Hosting companies can compete with Microsoft OfficeLive - today. • Hosting companies can increase Average Revenue Per User (ARPU) - today. • Hosting companies can create a Long Term Relationship with Customers – today. • Smart Online and Parallels Creating High Growth Potential for Future Revenue

  12. For More Information Thomas Furr tfurr@smartonline.com (919) 765-5000

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