Monday, June 15, 2009

Successful Internet Business Models for SMBs

Technology has played an imperative role in business operations. The advent of internet has given a new methodology to conduct business faster in a cost effective way in a limited time and space. The economic downturn has increased the reliance on IT, and various companies are showing retroflexion.

Since our company, Business Mashups LLc, does web development work for Internet companies and web entrepreneurs, we have gained experience in understanding both the technological and business side of a web site. We believe the economic climate is favorable to companies like ours as we would be able to help most SMBs cut their costs, and become more efficient and help them in focusing on core revenue-generating aspects of their business. We have adopted a very aggressive approach to reach out to SMBs, and help educate them on the buying decision. We have also put a more concerted effort on simple tools that help businesses understand the savings associated with our model, and the associated tactical benefits that help them manage through the uncertainty using our scalable IT platform.

With the increasing capital constraints, most businesses are finding it hard to fund large up-front technology purchases and opt for a recurring cost model instead. The increasing regulation and compliance needs have actively propelled most businesses to make very conscious decisions about their infrastructure, and the outsourced model stands out to its advantages around cost savings, minimal capital expenditure, and flexible IT infrastructure.

How can you rate a successful e-business?

The outward signs of a robust and thriving business are:

  1. Revenue increases

  2. Ability to generate profits

  3. Success in creating meaningful alliances

  4. Success in expanding into new markets

  5. Differentiating itself

Existing business models are of many kinds:

  • Advertising - banner and direct marketing

  • Subscription sites

  • Customer services

  • Directory services

  • Content providers

  • Product/Service sales

Most successful companies pursue several related but different models concurrently. They defy easy categorization by diversifying revenue streams and becoming hybrids in a cost-efficient way.


This software and service provider entered the digitized world only in 1998, and metamorphosed into a digital pioneer in the span of two years. Innovative products and services and integration of these services have brought them into the forefront of web innovation today.

Products like Biz Online Initiative that deliver simple and complete online services and a host of other tools that customers require in setting up an e-business have made them a one stop shop for e-biz today. Their built-in self-service system for customers, employees and suppliers improved productivity and accuracy and brought down costs by 100's of millions of dollars. Consulting services with major firms like Sun Professional Systems have established their reliability with customers.

Their business formula:

  1. Innovative products and packages

  2. Integration of internal processes

  3. Exemplary customer service - a user friendly web site that connects customers easily

  4. Fast online e-business services

  5. Expert consultancy services

Another company in this league is Exodus Communications, an Internet data center that offers a range of web hosting services, bandwidth on demand, security monitoring. Their servers host leading web sites like Yahoo!, e-Bay and Merril Lynch. They allow these firms to deliver content and applications online round the clock without fail.

35% of their revenue comes from a very successful e-business consulting firm whom they have partnered with (Sapient). They are expanding from 19 data centers to 34 data centers this year.


Cisco develops switches and routers for Local Area Networks (LAN) and Wireless Area Networks (WAN) and the related software. They have become the worldwide leaders in networking for the Internet today.

90% of their sales are conducted over the Internet. They offer expertise in planning and executing Internet enabled solutions.

The company has grown in the past 7 years with 71 acquisitions to its credit, the latest being its investments in an optical equipment company and speech recognition software makers. Their business model could be termed an acquisition one!


The customer is King here! Amazon pampers their customers, tracks their tastes and uses this information to create a unique customer experience. This e-tailer cultivates relationships that lead to customers liking and trusting them. This kind of service surpasses the most brilliant technology in use today. Amazon brought in the world of successful one-to-one marketing, a personal touch from another era.

Recently though, they have suffered heavy losses, proving that any successful e-business strategy will survive provided it is based on a solid brick and mortar foundation, a la Barnes and Noble, another famous online bookseller. Although and Barnes the Noble Ltd. are run separately, a customer tends to associate trust and comfort in a known and established brand.

To summarize, exemplary customer service, successful online advertising and special discounted offers made Amazon and books synonymous terms today.

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