Reduced Costs, Removed Barriers to Entry

• Reduced costs, removed barriers to entry
• Worry-free, pay-as-you-go service
• Higher credibility, better reach

Situation

Sopima, a software development firm based in Helsinki, Finland, set out to simplify and streamline the processes of creating, managing, and storing business contracts for companies of all sizes.

Many companies manage hundreds to thousands of contracts each year for business arrangements with customers, clients, suppliers, and other external partners. With many stakeholders involved, including administrative assistants, sales associates, account managers, engineers, and legal representatives, collaboration through the contract creation process can be time-consuming and inefficient. The process requires close collaboration among individuals and departments, as well as with external business partners. Antti Makkonen, Research and Development Lead at Sopima, says, “Getting a contract signed can mean months and months of ‘back and forth’ between companies, often involving complex negotiations among legal teams.”

Often companies share documents through e-mail, which exposes them to the risk of information being stolen or compromised. Managing version control of these documents is also a challenge. In addition, it’s difficult for companies to control contributors’ access to various parts of a contract. For instance, a company may need for one of its engineers to review and approve a section about a design concept, without having access to the terms and conditions of the contract. Also, throughout the drafting of the contract, stakeholders must meet important deadlines that can be difficult to track.

Locating older contracts can also be a challenge. Markus Mikola, Partner at Sopima, says, “In our market research, we found that it could take a company several days to manually search and sort through its contracts based on multiple parameters, such as by company, expiration date,and by contractor.”

In early 2009, Sopima began to develop a software application called the Sopima Online Contract Bank to simplify the steps of creating, managing, and approving business contracts, including negotiations processes among stakeholders. “Sopima had a vision of making a contract and commitment management solution that included deal-making capabilities,” says Mikola. “We wanted to provide a tool that would help companies collaborate and negotiate easily and put an end to sending documents back and forth through e-mail. The goal was to simplify the workings between legal departments and the rest of the business structure.”

A small company with only five full-time employees and limited investment capital, Sopima decided to base its application on a software-plus-services approach and deliver it in a “cloud computing” environment, in which the solution would be hosted and managed on the Internet through an external partner’s data centers. This way, it could minimize its hardware infrastructure and administration costs. Also, the main goal of its business model was to get smaller companies signed up quickly so that Sopima would have an immediate cash flow. To do this, it needed to be able to offer them a low-cost monthly subscription service.

Sopima also needed a highly scalable solution. It anticipated that even its smallest customers would upload hundreds of contract documents to the application, and as its customer base grew, the company would need to be able to increase storage and other computing resources without purchasing new hardware. “We needed a way to increase and decrease our raw computing power on an as-needed basis. We couldn’t afford to invest in costly infrastructure that might sit idle,” explains Makkonen.

Finally, as a young company trying to increase its recognition in the industry, Sopima wanted to find a technology partner that could give it greater credibility in bringing its new services to market. “We wanted to be able to tap into a larger network for marketing to new clients. To find enough leads and build a strong customer base on our own would have been very costly.” says Makkonen. “We needed a partner—not just on the technology side, but from a marketing perspective as well—who could make that happen.”

Solution

Sopima evaluated hosted infrastructure offerings from several vendors, including the Amazon Elastic Compute Cloud (EC2) and Google App Engine, but neither provided the full-scale platform and service management capabilities that the company was looking for. “With Google, we saw that it could scale relatively well, but it still left us with the problem of having to add administrative staff to support the solution as our customer base grew,” says Makkonen. “Amazon EC2 didn’t provide a full service. You just get virtual servers and still need to build your own load balancing and clusters and other infrastructure. We didn’t want to have to reinvent the wheel. It would have been a huge waste of time and effort.”

In March 2009, Sopima evaluated the Windows Azure™ platform from Microsoft, an Internet-based services platform that provides an operating system and a set of developer services that can be used to create flexible, cost-effective solutions. The solution is hosted in Microsoft® data centers and offers a scalable infrastructure based on a pay-as-you-go model. The company chose the Windows Azure platform for several reasons, including its developers’ experience in building solutions based on the Microsoft .NET Framework 3.5. “The .NET Framework is a great foundation on which to build up this kind of business. In my previous role as a developer of software for large healthcare companies, our chosen technology was also .NET. It’s a solid platform for highly efficient development,” says Mikola.

To aid its development efforts, Sopima joined the Microsoft BizSpark™ program, which was designed especially for startup companies. Through the program, Sopima received valuable online training, access to software, support for Windows Azure, and was also exposed to a rich ecosystem of peers and partners. The development tools, platform technologies, and production licenses available through BizSpark include Microsoft Visual Studio® Team System 2008 Team Suite with an MSDN® Premium subscription, production use rights to host a Web-based solution using many of the latest components of the Microsoft application platform, and eligibility for the Windows Azure platform and other Microsoft offerings. “I’d recommend BizSpark to any startup building on Microsoft technology,” says Mikola.

Sopima also chose the Windows Azure platform because of the marketing advantage it believed it would gain through achieving status as a Microsoft Certified Partner. Currently a Microsoft Registered Member of the Microsoft Partner Program, the company plans to soon become a Certified Partner. Mikola, whose experience also includes time spent as the president of the Finnish chapter of the International Association of Microsoft Certified Partners, says, “We wanted to take advantage of the helpful network of sales and marketing professionals and opportunities that Microsoft could offer.”

“Our familiarity with Microsoft products helped make the transition to Windows Azure very easy,” says Makkonen.Sopima used the Microsoft Visual Studio 2008 development system to develop its contract management application on the Windows Azure platform, including Microsoft Visual Studio Team System 2008 Team Foundation Server. It also used the Microsoft Silverlight™ 3.0 browser plug-in as the basis for the user interface. “Silverlight gave us the power to do things with the interface that we couldn’t do using regular Web page programming,” says Makkonen. “It also made it possible to offer the application across a range of Web browsers.” The interoperability of Silverlight with the Representational State Transfer (REST) application programming interface (API) was also of value to Sopima, because it uses REST to connect users to data stored in the Windows Azure environment without requiring complex manipulations of administrative rights or firewall port settings.

Sopima customers who use its contract management application can easily manage different users’ access rights to various parts of each contract through the authenticationcapabilities of the .NET Framework.

Sopima uses Microsoft SQL Azure™, a cloud-based relational database platform that is built on Microsoft SQL Server® technologies, to manage contracts and contract information that helps customers track the commitments within the contracts based onany chosen criteria including expiration date, company name, contract owner, value of a contract, or assessed risk levels. Using SQL Azure, Sopima also stores all deadline and project milestone reminders for users involved in the contract creation process. As part of the Windows Azure platform, SQL Azure provides automated management capabilities, including built-in data protection, self-healing, and disaster recovery—crucial for safeguarding customers’ data. “SQL Azure relieves us of the database management aspect, which would otherwise require a huge investment of resources. We would have had to spend approximately[U.S.]$20,000 annually in server licensing, and pay several support salaries amounting to roughly $300,000 in savings” says Makkonen.

Sopima will release its application in December 2009 to 200 paying subscribers. “By 2010, we expect to have 2,000 subscribers, and from there it will just keep growing,” says Mikola.

Benefits

Sopima used the Windows Azure platform to launch a software-plus-services approach to contract management. By using a hosted infrastructure, Sopima kept its investment costs low, critical for a small startup in today’s economic environment. The Windows Azure platform was a perfect fit because Sopima was able to take advantage of its expertise in Microsoft technologies for a rapid deployment. Its relationship with Microsoft also gave Sopima the opportunity to capitalize on important marketing opportunities.

Reduced Costs, Removed Barriers to Entry

Using the Windows Azure platform, Sopima could avoid prohibitive startup costs, such as purchasing enough hardware to support a broad customer base and the ongoing costs of administering the hardware. Sopima found that, compared to other hosted infrastructure offerings, Windows Azure provided a more complete, lower-cost service. “The Windows Azure platform delivers an Internet-scale foundation for our application while reducing the need for application management,” says Makkonen. “Automated application monitoring and self-healing capabilities are part of the platform. We wouldn’t have been able to afford to provide that ourselves.” With the automated service management in Windows Azure, Sopima estimates an overall annual cost avoidance of approximately $500,000 in salaries alone. “Without Windows Azure, we would have had to hire additional full-time employees to support our application.”

Mikola adds, “As a small company in a time of recession, we have built a global solution with a minimal investment. If we hadn’t used the Windows Azure platform, we wouldn’t have been able to launch this service at all.”

Worry-Free, Pay-As-You-Go Service

This low cost does not come at a price for Sopima customers. “Silverlight has made the user experience almost fun,” says Makkonen. “And because the experience runs on the Windows Azure platform, the application is highly responsive.”

Mikola says, “The high performance is due to the speed of the Windows Azure platform and Silverlight. Even on a wireless or mobile phone connection, response times are great.” With the Sopima application, the company’s customers don’t have to invest in additional infrastructure. “Our customers don’t have to embark on an IT project to improve their contract management capabilities. They don’t have to worry about the availability or performance of the service—it just works.”

The pay-as-you-go pricing model of the Windows Azure platform also gets passed on to Sopima customers. “With Windows Azure, our customers will experience the cloud as it’s supposed to be experienced,” says Makkonen. “A company will be able to go from 300 users to 2,000 with no lag time. All they have to do is inform us of their needs and we’ll send them a monthly bill. Customers can scale the service according to their own usage. Our market intelligence tells us that our customers can save as much as $2,000 per user insetup fees for hosting, and approximately $15,000 per year per company in maintenance and hosting fees,usingour application and Windows Azure. We all gain control over our costs with the Windows Azure platform.”

Higher Credibility, Better Reach

Sopima chose the Windows Azure platform not only for its technology benefits, but also for the advantages that a relationship with Microsoft can provide to a fledgling company. “It’s difficult for a small, unknown startup to look highly credible,” says Makkonen. “We chose to work with Microsoft because the company is more than a technology partner; it’s a business partner, too.” Through membership in the BizSpark program, Sopima gains visibility with potential investors, clients, and partners. “Our relationship with BizSpark and the Windows Azure team has given us a network of potential customers that would have cost a significant amount of money to build on our own. We chose Windows Azure and Microsoft because the opportunities were so great we could not ignore them.”

Windows Azure Platform
The Windows Azure platform provides an excellent foundation for expanding online product and service offerings. The main components include:

• Windows Azure. Windows Azure is the development, service hosting, and service management environment for the Windows Azure platform. Windows Azure provides developers with on-demand compute and storage to host, scale, and manage Web applications on the Internet through Microsoft data centers. In addition, Windows Azure serves developers’ connectivity needs through the following services.

The Service Bus connects services and applications across network boundaries to help developers build distributed applications.

The Access Control Service provides federated, claims-based access control for REST Web services.

• Microsoft SQL Azure. Microsoft SQL Azure offers the first cloud-based relational and self-managed database service built on Microsoft SQL Server 2008 technologies.

To learn more about the Windows Azure platform, visit:

For more information about Microsoft BizSpark, go to: