Farmers know how to till the land and grow crops. But when it comes to harvesting information they need to keep their agribusinesses strong and healthy, that’s been a different story. Today, they must cultivate technology and their commodities to succeed. More of them use an unlikely resource, their Internet Service Provider (ISP).
One in particular, Agristar Global Networks, connects many commercial farmers and ranchers with trade partners and also provides them a portal to check on industry news, weather, and market prices through its satellite-based, high-speed Internet service. But as an ISP with a trimmed-down staff, Agristar is not an arbiter of niche information and data nor an enabler of communications between businesses and their trading partners.
“We wanted to create a single portal to provide both services in addition to the typical ISP services,” says Tim Ganschow, Vice President of Strategic Satellite Deployment at Agristar, in Chicago.
Rather than building and hosting its own portal, Agristar turned to Internet content and Application Service Provider (ASP) InfoStreet of Tarzana, California,and its “Software as a Service” (SaaS) model to develop, host, and maintain this portal for Agristar customers.
The niche service is aimed at the 2.1 million American farmers, vineyard owners, and ranchers who, due to their rural locations have, at best, spotty access to high-speed landline Internet.
Today, Agristar pays less than $100,000 annually to outsource this specialized content management and delivery to InfoStreet, claiming a savings of at least that much per year. Kelly Paradis, Director of Web Development at Agristar reports, “The human and technology resources we would need to support this internally would cost much more than what we spend to outsource it.”
“There’s a growing need for wireless communications–particularly satellite–in the agricultural industry,” according to grain market analyst Bob Wisner. He points out that offering time-sensitive data on-demand, a portal for agribusinesses to connect with their markets, and high-speed satellite rural connectivity “brings a dramatic and very positive impact.”
Pushing the Content Delivery Envelope
When Agristar launched its service in April 2003, it planned to handle all the technology. But, as often happens when companies try to build a solution from scratch, it quickly saw the wisdom of outsourcing. In order to reduce the time and cost, the ISP turned to InfoStreet.
“Software-as-a-Service is a new buzzword for many people,” according to Siamak Farah, InfoStreet’s CEO and Founder. “It allows us to develop software and deliver on any level of demand.” He suggests many companies have this capability but get bogged down in growing and scaling. “This is why they outsource to us because we can also grow with them.”
InfoStreet’s basic information architecture solution to Agristar “gave us a good way to manage our content sources in a single area,” Ganschow says. “But when we looked at different options, like delivering focused content to our agri-subscribers, we needed to build a portal from the ground up. InfoStreet tackled that problem and proved how we could move forward together.”
InfoStreet’s SaaS model appeals to Agristar because it allows the ISP to support a handful of users of any specific content bundle in the beginning, then grow as more subscribers join. “We needed a service that would eventually benefit several thousand subscribers but was affordable during the early period when we wouldn’t have a large number of users,” adds Ganschow.
The ISP began receiving volume discounts when it had 200 users. Per-user costs started at 25 cents but moved as low as five cents per day as the user roster grew. The highest volume discounts – three cents per day – are available when the number of users of the service reaches 10,000, Ganschow said. “We like the ‘pay only for what we use’ service.”
“There are advantages to paying for outsourced SaaS services that way,” says Michael Mankowski, Senior Vice President of Tier 1 Research in Minneapolis. “Few customers realize that they can pare their yearly costs by five-to-fifteen percent if they pay for an annual SaaS agreement all at once.”
“When we get to that point, InfoStreet says it’s prepared to move to that model,” says Ganschow, who notes that when the deal was first igned, InfoStreet guaranteed 99.95 percent uptime for the portal. Beginning last April, the ASP upped it to 99.99 percent.
Speed-to-Market and More Niche Services
“In an hour-long conference call, we identified much of what we wanted,” Paradis says. “InfoStreet had a programmer build an interface for our network to access that let users go in and build an email account unique to their portal and provide access to the remote information portals.” The service went live within a week.
At initial deployment, the company had several hundred subscribers but now has thousands. “It’s grown by an order of magnitude, and InfoStreet handles it fine,” Ganschow says.
When customers sign up for the Agristar high-speed Internet service, they have access to the Myagristar.com agricultural information portal and are given an agristar.com email address. “Many of our subscribers want an identity with the service, so having our own brand of email was really important,” Ganschow says. “Subscribers like the agricultural-specific email, but it is also a form of marketing for us.”
Many agricultural customers that adopt the Agristar service are novice computer users, so simplicity and the ability to provide good customer support were critical components for the new system. This ease of use also allows trouble-free additions of other content resources to its now robust agri-portal.
“As we add additional content providers, it’s easy to layer them on top of current content providers,” according to Ganschow, who also notes that audio files and commentaries are just two of the types of content they’ve added since service launch. “It’s organized so we can efficiently manage it with just a few people.”
As Agristar attracts more users, the ISP looks to provide more localized content. “There are 300 different commodities and 50 states in the union, so there are a lot of localized centers,” Ganschow says. “We can create micro-communities that may be a small percentage of the total subscriber base. But it’s becoming easier to deliver what these vertical customers want since we’ve outsourced this responsibility to a company that can deliver it affordably.”
Lessons From The Outsourcing Journal:
- Outsourcing information services to an SaaS solution offers dramatic savings in both cost and internal resources due to scalability efficient management and impressive speed-to-market.
- With the growth of smaller, “leaner” ISP providers, greater emphasis on numerous diverse niche content suggests growth possibilities for the outsourced SaaS model.
- SaaS outsourcing providers typically offer sliding-scale rates on the number of user transactions to begin, but can then migrate or the even less-expensive “annual fee.”
- Outsourcing content allows ISPs to have their customers create their own branding and marketing