Elementool, my dear Watson!

Last issue I discussed the value of application service providers. Today, I want to look at an ASP that provides business functions that are, to many companies, crucial to operations. Elementool offers three outsource functions: a help desk service, a bug-tracking system, and a time-tracking service.

The three services have a number of attributes in common: 

* As an ASP service, a client on a browser is all that is needed (I know, “Du’oh” but we have to be clear about that).

* Account setup that takes 30 seconds.

* A continuous upgrade program that reflects customers’ requests.

* Highly customizable services.

* You can define an unlimited number of users of your account for a single price (very interesting).

And very compellingly, elementool’s services are “for rent” so you can stop using the services at any time and with no obligation.

All of the services have free subscription levels that are limited by various combinations of storage limits, number of projects, data retention time, and so on, but even then there are no banner ads.

Common to all elementool’s services is the ability to download all of your data at any time. In the bug and help services you’ll find sophisticated, customizable reporting and statistics; automatic e-mail notification of users responsible for specific tasks or topics; history trails of activity; and integration with your own Web site.

The pricing of these ASP offerings is also impressive: single accounts with the Standard features are $40 per month, $60 per month for the Pro features, and there’s a Premium version for Help Desk and Bug Tracking for $70 per month. Multiple accounts are priced per account at $20 per month (Standard), $25 (Pro), and $30 (Premium) as long as the monthly billing exceeds $120.

What impresses me about these offerings is how easy elementool has made it to adopt its services and even made it easy to terminate (being able to download your own data also avoids you getting artificially locked in to the system) combined with very reasonable pricing, good looking service presentation, and excellent feature sets.

I’m impressed. Elementool understands that establishing a volume ASP business requires presenting a solid, well-engineered service at a compelling price to create a stable business. The SAPs and PeopleSofts can leverage premium prices (at least for now) but that restricts their market to companies willing to spend hundreds of thousands of dollars to play.

Small, agile companies such as elementool are excellently positioned to build major businesses by addressing the bigger market: the small-to-midsize businesses that need to outsource so they can focus on what they are good at rather than trying to run an IT operation.