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Pricing Guide for Web Services 2nd Edition
INTRODUCTION
Incredible Opportunities
Our world will never be the same again.
This book is a no-nonsense approach to making money at the on and off-ramps
of the information data highway. It's about setting prices to achieve
business success beyond your wildest dreams.
The Future is Here (and It's OnLine)
The Internet is driving a fundamental change in the way we communicate.
People all over the world are going "online". And e-commerce is exploding.
Companies in every major country have developed (or are developing) a unique
Internet presence to communicate with customers, vendors, and each other.
Today, buying customers can come from every corner of the globe. Even
government offices, libraries, radio and TV stations, newspapers, magazines,
and professionals are linking up electronically. There is no end in sight for
the dramatic rise in the use of the Internet. According to a recent article
in the Los Angeles Times, over half of all venture capitalist investments are
going to companies that help other businesses tap the Internet. These
companies provide Web page design and development services, and the future
for these types of businesses has never been brighter.
A year ago, skeptics insisted that few people are making money on the
Web. They claimed that only marketing and advertising companies were
successfully selling online. They didn't foresee the billions of dollars
being spent today through online investing, real estate transactions, home
shopping, bookstore sales, and ecommerce at a myriad of small business
boutiques. Over 17 million US households shopped online in 1999 pushing
ecommerce sales to over $20 billion. Within five years this figure will top
$180 billion
Hundreds of thousands of businesses are trying to gain a foothold and
claim their territory in this amazing market. Every business wants to sell
products and services using the Internet as their medium for reaching clients
and customers. Information is the key, and the Internet abounds with answers
to almost any question we could pose. Today, the first place that most young
people go to find answers is the Internet.
The growth of access to the Internet has consistently improved, and
everyone today feels a need to be online. Over 50 percent of the US
population is now online, and the rest of the world is rapidly catching up.
Globally, about 10 percent of the world's population is now on the Web, up
from four percent at the turn of the century. Current estimates are that
there are over 160 million Internet users worldwide. And a recent survey
predicted that 80 percent of all business transactions will occur online
within four years. Like many earlier predictions, this, too may be overtaken
by events and the rapid adoption of technology before the time estimate is
reached.
A sidebar in INC magazine described a recent Internet use survey that
concluded that half of the people who use the Web, do so for the following business purposes:
- gather information
- collaborate with others
- provide vendor support and communication
- research competitors
- communicate internally
- provide customer service and support
- publish information
- purchase products or services
- sell products or services
Currently the most popular use for the Internet is email, followed by
research and then ecommerce.
With this tsunami of activity occurring in and around the Internet,
almost every business feels a need to have an Internet presence. But few know
how to accomplish this feat. This fact has provided a remarkable opportunity
for those individuals who can help companies build a suitable online
presence and conduct electronic commerce on the Internet. The time is now for
service providers to stake their claims and exploit this gold mine of new
business at the on and off ramps of the Internet data highway. Entrepreneurs
who drag their feet may find themselves eating the digital dust of
visionaries who sweep past them to claim the treasures at the end of this electronic rainbow.
Industry researchers see fantastic opportunities for Web service
providers. According to Computer Reseller News, "It is no secret that the
Internet has grown over the past year like a spider web in an abandoned
garage, giving birth to dozens of oneor twoperson shops that specialize in
building [Web] sites."
While thousands of people experiment with their own Web pages, in the
end, good design and good content determine who wins the economic war for
business on the Web. A recent study by Gartner Group and reported in
Infoworld concluded that most Web sites fall short of what customers want.
Most sites don't get revisits by those clicking onto their pages because
they just don't have what attracts and retains customers. In fact, 75% of all
the sites surveyed need a major redesign. And EVERY site seems to be in
constant revision. What an opportunity for you!
There are enormous profits waiting for those who know how to design and
present information for online use. Graphic designers, desktop publishers,
animators, and multimedia artists are nicely positioned to exploit this huge
and growing market. There's also a profit place for the technicians who
understand servers and networks. Service providers who can write
Internetrelated code such as HTML, DHTML, CGI scripts, and design online
databases, develop Web animation and banner ads, use Web page editors and
design goodlooking Web sites are literally worth their weight in gold. Web
authoring has become the desktop publishing of the 90's, and the Internet is a
treasure chest of profit for those with the skills to work in this medium.
Just as traditional businesses are adopting the Internet as another
profit center, so are designers and developers who include Web site design in
their portfolio of service offerings. Yet there are many service providers
who simply don't have a clue what to charge for their work.
A recent query to our Real Prices CONFIDENTIAL database shows a wide
range in the billing rates for Web service. This is typical of a new business
model and much like what we saw in the early stages of the desktop publishing
revolution. New Web service providers are not sure how to price their work.
We found Web site design going for $12 to $250 an hour, Web page design going
for $30 $1,500 a page, Web consulting for $25 $300 an hour, and HTML
programming for $25 $240 an hour. Like desktop publishing, Web service
prices should settle within a narrower range as owneroperators become more
experienced and learn the true value of what they offer. Since Web service is
labor intensive, the profit potential is huge for individual owneroperators
who bill by the hour or by the job.
Just about anyone with a technical skill can discover and mine a niche in
this Internet gold field. Carve out your own niche in this huge profit pie by
creating value for potential customers. Develop the skills and then find ways
to generate higher value relationships for your clientsrelationships with
their own customers, their suppliers and with their investors. Then charge
what you're worth. Remember. Value is not what you think your services are
worth. Value is what a customer will buy.
The Internet is the ultimate “revenge of the nerds.” And many are being
richly rewarded for their knowledge and abilities.
This book is designed to help professionals who live and work at the on
and off-ramps of the Information Data Highway. It's designed for those who
seek their fortunes on the crest of the "4th Wave". This book is designed to
make Web service an incredible money-maker for you.
How to Use This Book
This "meat and potatoes" reference is full of pricing tips, tricks, and
techniques designed to help you make money. Use it to develop strategy and
tactics. Use it to set prices that generate high profits.
But also use it to help educate others. The Web services market has room
for everyone, even your competitors. One of the major complaints of Web
designers concerns "propeller-heads", "technophiles", and "newbies" who do
work at rock bottom prices or for free. The best way to counter cutthroat
pricing is to educate others that Web service is a profession, not a hobby.
Show them this book. Call them. Suggest that they buy their own copy.
There's plenty of business for everyone. By helping others approach Web
service as a business, correct value signals are passed to the marketplace,
and all Web designers and developers can make good money while enjoying their
work. Web service is about value and profit. This book shows you how to make
it a valuable and profitable business for your own company.
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