Boom to bust. Pets.com, ToySmart, Rx.com, Music.com, Wine.com, Zap.com, CDWorld, eToys, MusicMaker.com, Garden.com and at least 600 other major Internet companies have unplugged in the past 18 months. Companies formed without much thought to a business model sprouted like daisies and now are gone with the first frost of an economic downturn. Venture capital funding has dried up, and many online companies are worth pennies to the dollar or less.

How will this affect us in the meetings industry? What about the hundreds of online technology providers and Internet companies servicing meeting planners? There have already been layoffs and downsizing for many of the companies and even failures (i.e. MeetHead.com). Are most of these companies doomed?  What questions can a planner ask to get a sense of the health of these companies? What can planners do to protect their organization when dealing with dot-coms? What's the worst-case scenario if a company goes under? This article will address these issues.

The Good:

The Web and the digital economy are here to stay. I believe that history will record the Internet and it graphical interface, the Web, as being the most significant invention since the printing press. The Web is changing the business process from analog (paper-based) to digital (computer-based).  Huge efficiencies await us as the world becomes a much more connected and smaller place. The technology companies that survive will transform our lives in the meetings business.

Nearly every task in the course of meeting planning has digital alternatives: site selection, requests for proposals, housing, registration, meeting promotion, marketing, attendee communication, purchasing of meeting space, room diagramming/floor plans, exhibition sales, surveys, messaging, member management, meeting programs, audience polling, budgeting, meeting consolidation, fundraising, incentive management, meeting logistics, scheduling, badging, travel management, and exhibitor kits are only a few of the jobs that are being replaced with more efficient and convenient digital methods. 

Many of the companies, especially the application service providers (ASPs) who rent software rather than selling it, have provided reliable and secure services that are easy to learn and use. They can help plan highly complex meetings. The data are accessible any time and any place with Internet access. They are regularly updated and the total cost of ownership from purchasing software can be considerably less.

The Bad:

Many of the existing meeting industry internet-based companies will not be around in two years. There have been layoffs at several of the major companies. We will see continued downsizing and layoffs as companies strive to make their last round of funding stretch. There will likely be mergers or failures for several technology providers in the meeting planning arena this coming year.

he Ugly:

To the extent that your company or your procedures are relying on these providers and/or that your data is entrusted to them, your data could be in peril.  Any company should be thoroughly investigated before relying on them to process or provide key services and information.

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Conducting an online service provider audit:

Any business relationship should be entered into with care. However, with the recent difficulties in the dot-com space, extra caution should prevail. Here are some of the key areas and questions to consider when interviewing applicants.

Company Information:

Examining the company history can give a good insight into its viability. When was the company founded? What was its origin? What is its history?

Was the company built by people that understand the meeting industry or by technology experts trying to figure it out?

Clients and References:

A company client list and references are also important gathering details about viability and longevity. Who are their principal clients? Are their clients doing well financially? Are these clients using the company’s services to an increasing degree?

Also ask if the company has clients similar to yours. If so, ask for customer references who are similar to you in size and work.  Can quantifiable results of  success be provided by the company and its references?

Also ask if their technology been recognized by third-party endorsements.

Product Information:

Has the company been designed as an online provider from the start or is it converting from a traditional software product? If it is the latter, ask specifically how they have changed the original system architecture to meet the scalability demands of the ASP service model.

Does the company use a third-party solution as part of its service offerings? 

If so, how integrated is the entire service offering? 

Staff and Employees:

The employees, of course are the heart of every company.  Information about the staffing level can be very useful. Finding out the total number of employees will give an indication on the scope of the company. How does this total compare to similar solution providers?  If the numbers are much higher or lower the reasons why should be ascertained. A “lean” staff will require less overhead but may not be as able to new developments. Also ask how many “core service staff” (people who are most directly responsible for delivering the service you are buying) such as engineers and customer service and support.  Find out if there been recent layoffs to get an indication of problems at the company in terms of funding.

Also, examine their staffing employed in the software development. Is the company’s core technology developed by internal engineering staff, or is it outsourced to partner developers?   If outsourced, how does the company support the technology and respond to customer issues?  Are the engineers certified on the servers, network gear and software? Is this in the contract?

Funding:

With current funding challenges being experienced by many online companies, this line of questioning becomes especially important.  Many online companies have had spent millions in development and marketing, and have yet to achieve profitability.  Now that the Internet bubble has deflated, investors have  been much less likely to spring for new rounds of funding. This will be the key reason why  companies close their doors in the next 18 months. 

Questions regarding the financial viability should include:

When was the last round of funding and for how much?

What is the current monthly spending rate (burn rate) and when is the next round of funding scheduled?

How much money has been raised to date? 

Who are the company backers? 

You can expect to get the best spin possible on these questions, even from financially troubled companies, so this information will need to be weighed and crosschecked carefully.

Security & Data Protection:

Security and data protection issues should be fundamental when considering using and online technology provider. I will give insight into the overall robustness of the company as well.

Here are some of the questions to ask:

·        What level of data security, backup and disaster recovery does the company offer to ensure integrity of your customer and event data?

·        How secure is their computing environment?

·        Who audits the company security?

·        Do I need a firewall on my site for additional security?

·        Is there a firewall protecting the database in addition to the one in front of the web server?

·        What is their exact backup routine?

·        What is their backup interval and procedure?

·        Is there offsite backup?

·        What is their access control policies and procedures to the servers?

·        What is the level of data encryption?

·        How much data could be lost in the worst case scenario? (e.g. just the current transaction / the previous hour / the previous day?).

·        What are the fail-over procedures?  How long does it take? 

·        What are their policies regarding purging of data?

·        At the time of data purges, can we receive a CD ROM with all of our data for our archive?

·        How many points of redundancy are there in the system (web server only, web server and database, web server and database and application server, etc.)?

·        How are financial transactions handled?

·        What are the security procedures for handling credit cards?

·        Are credit cards processed automatically an in real time?

·        Can multiple payment types (credit cards, checks, purchase orders) be accommodated?

·        Is secure socket layer technology used?

·        What tangible assurance can the company offer in terms of scalability?

·        What is the highest level of simultaneous users successfully handled?

·        What is the highest number of simultaneous credit card transaction successfully handled?

·        What is the highest number of daily site visitors successfully handled?

·        Has the site traffic been verified by any third-party?

·        What are the privacy policies?

·        Do they disclose the identities of their customers to other companies, or market to them themselves?

·        Do they read customers’ data?

·        What is their code of ethics regarding customer privacy?

·        Who audits compliance?

·        Who certifies it?

The database of clients is the most important intellectual property that most companies have. To the extent that companies entrust this data to online service providers, the greater is the risk. Most ASPs allow some means of exporting the data to your own database. Look into the following questions:

·        What are the options to export the data into my company’s database?

·        What export formats are available?

·        How is the export process completed?

Contract Terms & Exit Strategy:

If a dot.com dies, disaster for you company can be mitigated by carefully examining the contract terms and exit strategy.

The following contract items should addressed before signing:

·        How do they price their services (e.g. per user/per month, per user/per transaction, etc.)?

·        What services are included in the subscription fee (fee-set-up, helpdesk, software updates, on-line training, etc)?

·        Lead time:  How many days will it take between a signed contract and a customized, working registration site?  (Often this can be an important indicator of customer service level as well as the viability of the technology.  Well-designed ASP services are designed to be easily customizable and can accommodate large number of system users at the same time.)

·        What is their guaranteed uptime for the applications ( i.e. 99.7% uptime?) What happens if this service level agreement is not met?

·        What is the length of the contract?

·        Other than a Web browser, what hardware/software, if any, is required at your company’s site?

Exit items:

Here are some of the key questions to have answered before you or the company decided or is required to exit before the contract length:

·        What happens if I want to end the contract earlier than the stated length?

·        What are the exit options if I am dissatisfied?

·        What happens at the end of the contract?

·        How I will get my data back, and in what form?

·        Assuming the ASP has been providing this service for a year or two, how much data history will it return to me – all of it? or less?

·        Assuming I want to transfer to another ASP, will it agree a seamless handover with them?

·        Will it manage incoming email during the handover?

·        If so, for how long?

The Move Toward Accepted Practices (Voluntary Standards)

One of the challenges in data collection is that everyone does it in different ways. Databases come in all sizes and shapes. Data storage among meeting planners, hotels, CVBs and ASPs are not standardized making in difficult to share information easily.  If everyone could conform on a voluntary basis to a standard set of data fields, then the issue of the disappearing dot-com would be diminished. If everyone stores the raw data in the same way, then it would be much easier to transfer from one online company to another in case of company failure or other reason.

This is where APEX steps in. The Convention Industry Council (CIC) has recently launched the Accepted Practices Exchange Initiative (APEX) chaired by PCMA past chair Mickey Shaefer. The goal is to develop and implement industry-wide accepted practices to create and enhance efficiencies throughout the meetings industry.

The subcommittees (panels) will concentrate on seven key areas: Terminology; History/Post Event Reports; RFP's; Resumes and Work Orders; Meeting and Site Profiles; Housing; and Contracts.

Technology will likely have a huge impact on this process. Finally we have a common interface (the Web) and a data transmission standard (extensible markup language or XML) with which rich data can be transferred from one party to another.  With the Web and XML it does not matter what software or what online service provider is used. On the fundamental level, all that matters is what are the key data fields and what order will they be transferred. 

If a problem occurs with one provider, it will then be much easier to transfer the data seamlessly to another provider.

Look for significant advances with APEX in the next few months.

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