This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

The Digital Skeptic: Software Sales Are Over. We're All Concierges Now

NEW YORK (TheStreet) -- Chris Pyle has looked at cloud software from both sides now.

"We are developing a healthy cloud-computing business," Pyle told me during a long, marvelously frank phone interview. "But we are facing the new reality of consumption economics over the Web."

Pyle's view should matter to investors. He's CEO of Champion Solutions Group, a Boca Raton, Fla., business data management firm that has sold business computing software and tools for the past 15 years. It's a $75 million business he runs, with 110 employees. And his firm "considers it our heritage to integrate software and hardware for our clients," he said

Surprisingly, Pyle was willing to break down in tiny detail what it's taking to manage the transition from being a traditional business software reseller -- where customers buy products and equipment from makers such as Microsoft (MSFT), Dell (DELL) or maybe Oracle (ORCL) -- to today's fast-moving Web software market where businesses rent access to apps delivered over the Internet. A market will increase from $16.7 billion this year to $21.3 billion by 2015, predicts CMSWire, a publication service focused on information technology.

Those are numbers Pyle trusts. "In fact, I am doubling down on my cloud offerings," he said. "We bought a neat Microsoft Office 365 management app called MessageOps."

But if as I listened to Pyle details Champion's transition to selling business software over the Web, a sobering investor lesson emerged.

"What you learn is," he explained, "What you did to get you here won't get you there."

A foggy cloud reality
The biggest change, Pyle said, is business customers no longer buy software, but essentially rent it by the month -- so clients can jump ship at any time. Therefore, the intense, upfront sales process that went into selling pricey computers or software packages has been replaced by a tricky ongoing, costly and culturally challenging client-service relationship.

"I think, long term, it's very sticky," he said. "At the same time, it's very hard. Someone can move from Microsoft to Google (GOOG) in a heartbeat because there is no long-term contract."

Pyle no longer markets features or hardware, but now tries to communicate a sense of service and a knowledge of a client's business that require a startlingly granular commitment to information.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,985.61 +78.99 0.47%
S&P 500 1,972.83 +9.12 0.46%
NASDAQ 4,419.0340 +27.5710 0.63%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto
Advertising Partners

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs