What is Electronic Software Distribution?

Electronic Software Distribution and e-Commerce – Where Do They Meet?

What do you do if you are a software company and you reach a point when you notice that your costs (production, delivery, customer support, etc.) begin to skyrocket? Do you start a downsizing campaign within your company? Or do you try to find lucrative, innovative solutions that not only allow you to keep your trusty employees but also start bringing you a quite significant profit?

One of these solutions, and probably the most handy is Electronic Software Distribution - not an easy task, but worth considering and implementing. For most of you, this term is well known, yet I still see lots of searches on our website for the definition of ESD or "electronic software distribution" term.

A Definition

According to Wikipedia, Electronic Software Distribution (ESD) is a solution devised by software producers, meant to allow users to download software products over the Internet (i.e. electronically). This approach comes as a counter-offer to the common practice of delivering the software on physical media (e.g. CDs, DVDs).

Usually, software products distributed electronically have the advantage of costing less than software distributed on physical media, due to factors such as the elimination of expensive storage space or of the time gap between order and delivery by regular mail.

Therefore, it is common practice that software vendors offer discounts for software purchased and downloaded over the Internet.

ESD – What It Implies

There are two approaches that vendors adopt regarding the products they sell:

  • Direct purchase
  • Trial version

Direct purchasing means that the customer pays and then downloads the full software from the vendor's Web site. The purchased software contains all the features and functionalities and the buyer can start using it right away.

The other approach is commonly referred to as "Try-Before-You-Buy" or "TYBY", and it consists of offering prospective customers only a trial version of the software. This trial (or evaluation) version is a version of a software product that has several particular traits. It can be delivered to prospective customers (for pure marketing reasons) via magazines, direct mail or Web links. See the History of shareware.

Usually, trial versions are restricted to a certain number of activations/uses or to a strictly defined period of time (common practice is to allow using it for up to 30 days). Also, a trial version can contain only a limited number of the features and functionalities of the "full" product. This is meant to entice buyers to purchase the software from the vendor after having been given the chance to evaluate the product and see what it can do. See also the article: Win Promoters with Shareware.

This distribution of software solution is associated with what is known as Digital Right Management (DRM) systems. DRM technologies are meant to protect the intellectual rights of the software producer, and are usually implemented within the software or the operating system. In the case of TYBY software, they control the number and length of uses, while generally they prevent any unwanted (by the software producer) alteration of the software or unlawful copying.

Electronic Software Distribution and e-Commerce

ESD is a solution that supports e-Commerce. It helps vendors get rid of ineffective shelf space and diminishes considerably the costs of having the products distributed on physical media. There are cases when buyers will also ask for a back-up cd / dvd for the software, which is actually a nice option to offer since it gives customers the comfort of knowing that their purchase is safe and sound. Nevertheless, offering a back-up cd / dvd to the customer at their request is definitely better than having hundreds of CD or DVD cases lying around in a vendor's storage house. The cost of having software hosted on a Web site is much smaller compared to the cost of storing large amounts of physical media.

One of the main advantages (and probably the most important) of this type of software distribution is that it offers buyers permanent access to software products, 24/7, regardless of time or place. Thus, software purchases can be made at any hour, from anywhere in the world, using only a valid credit card. This is a factor that greatly influences customer satisfaction.

ESD leaves little place for human error in terms of delivery, again adding to customer satisfaction. If implemented and managed correctly, such a product can help vendors and producers alike win over a significant "slice" of the market.

Of course, ESD services must be properly promoted and customers have to be educated. They have to understand why an electronically delivered product is as good and reliable as one they would buy from a physical retail store.

They have to be certain that they will enjoy the same rights and benefits (not to mention the security and support) they would receive when buying a CD.

One easy way (and quite at hand) to have your product promoted as much as possible and made known to prospective buyers is to use the affiliate networks and cross-selling. With affiliate networks, you have to find the right affiliates to promote your software products.
See also the article Choosing the Right Affiliate Program.

When it comes to cross-selling, it is important to select a partner and find one (or more) of their products to which you can bundle your own product(s). Whenever a purchase of your product is about to be made, it will appear as a supplementary item at (preferably) a promotional price, and vice-versa. See also the article: Cross-sell, Up-sell, Boost Your Software Sales.

Conclusion

Electronic Software Distribution is faster, simpler and less expensive than "classic" software distribution. Taking into account that customers generally want to have access to their purchases as soon as possible, ESD is the proper solution to meet this ongoing demand.

The implementation of ESD services can help increase the revenue of software producers and vendors, since it has become a very important factor associated with e-Commerce. Basically, it's all about product delivery and how quickly it can reach customers, and, given that fast Internet connection tends not to be an important issue nowadays; it's safe to say that ESD is a solution for the future.

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