ISSAQUAH, Wash.--(BUSINESS WIRE)--Jan. 16, 1996--An innovative new service that makes it possible for end-users to order, pay for and receive software upgrades on-line is making its maiden run on anti-virus software from McAfee Associates, Inc.
Each copy of McAfee's new Scan95 anti-virus software, an OEM product bundled on thousands of computers and peripherals, comes loaded with an on-line upgrade program from CDi, Inc., called Self Serve Software. Users access the program through a menu option labeled "Update Scan95" where they can select either a one-time $10 upgrade or one- or two-year upgrade subscriptions for $40 and $60, respectively.
The 32-bit service then intuitively senses the most direct route to Self Serve Software's client server, either via modem, Internet or the user's network's connectivity path, and sends the order and encrypted credit card information to the server for processing and approval. The server fulfills the order electronically, transmitting the upgrade with a registration key that is valid only on the customer's PC. Security is ensured through a proprietary "secret key" locking and unlocking system, the use of a private T1 phone line for credit card authorization and a variety of other mechanisms.
MORE SALES AT LOWER COST
"Traditionally, users who wanted to upgrade our software had to call our 800 number to do it, and only about 10 percent went to the trouble of registering," said Alex Sill, McAfee's director of OEM sales. "With this service, we expect that percentage to rise significantly, simply because customers will be able to upgrade without even taking their eyes off their computer screens. And it will cut our costs because we'll have fewer calls to handle and virtually no packaging or delivery expenses."
The system even cuts costs for customers with no connectivity capabilities who order by conventional methods because the order goes to a fulfillment house instead of to McAfee's order takers.
In addition, McAfee views the service as an opportunity to increase sales of other company products. Other items from McAfee's product line will be added to the Scan95 on-line upgrade catalog this spring, as well as the option of ordering manuals and upgrade diskettes.
PAY AS YOU GO
For software vendors, another advantage of CDi's service is a pay-as-you-go feature that requires the software company to pay a service charge only at the time of purchase by the end user. The charge varies with each customer but averages 10 percent of the gross transaction. CDi keeps a separate bank account for each vendor, deposits customer payments into each account minus the service charge and then provides the vendor with all registration data and consumer information for customer support needs.
"We don't have to pay unless we're making money, and this is money we probably wouldn't be collecting otherwise," Sill noted. "The secret is to make it easy for the user to buy, and this is a cutting-edge method of simplifying the process that we believe will spread to the whole industry."
BEYOND UPGRADES
In addition to the upgrade services being used by McAfee, CDi's Self Serve Software service can be used for a wide variety of other applications.
The program offers the first practical system for software rental, for example, permitting users either to test software packages or to use them for short-term projects without making large capital investments. CDi's service can also eliminate piracy and turn potential pirates into customers. Both these benefits are possible because the service locks the paid software to a specific computer as identified by the unique GUID electronic serial number embedded in every 32-bit operating system. If the software is copied to an unauthorized computer, the Self Serve Software server will foil the interloper by time-bombing the program or releasing it in a crippled mode predefined by the software vendor.
Industry estimates suggest that this kind of distribution model will provide registration revenues four to seven times higher than traditional shareware registration rates.
ON THE CUTTING EDGE
"What we are offering is value-added electronic commerce that can do everything from registering, renting and selling software to downloading a demo from the World Wide Web," said CDi President Gerry Bakker. "It's a service that doesn't disrupt the present channels of delivery; it dramatically lowers cost of sales by eliminating expenses such as warehousing, packaging, shipping and distributing, and it ensures revenue collection and copyright enforcement. McAfee jumped on the bandwagon early, but eventually, everyone in the software industry will want to do business this way."
CONTACT: S&S Public Relations, Inc.
Christy Gerhart, 708/291-1616, ext. 254
Laura Greenberg, 708/291-1616, ext. 229
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