Software Marketing Resource Articles: Changes at SWREG How Will it Affect the Industry?

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Tuesday, September 28, 2004

Changes at SWREG How Will it Affect the Industry?

Cyrus Maaghul the former owner of Digibuy, one of the first registration services purchased by Digital River, raised some eyebrows by announcing that he is the new CEO of SWREG. I interviewed Cyrus to find out more.

Approximately five years ago, Cyrus Maaghul sold Digibuy to Digital River. After the sale, Cyrus returned to school attending George Washington University, where he obtained an advanced degree in International Securities Studies. The background in foreign policy and foreign affairs enabled Cyrus to work in the international arena, spending 4 months in Iraq working with the Coalition Provisional Authority as an advisor to those investigating the corruption in the Oil Ministry and Oil for Food Program.

The additional college course work in cyberterrorism, and the impact on national security policies eventually led Cyrus back to the software industry. Three month's ago, while working with a venture capital fund researching the shareware market, Cyrus crossed paths with an old industry friend and former rival, Steve Lee from SWREG. Unbeknown to most, prior to the Digital River purchase of Digibuy, SWREG leased the Digibuy technology for their use.

Having a history and knowing the industry, Cyrus could appreciate the hidden value in SWREG, and was confident he could take the company to the next level. Steve Lee while still an integral part of SWREG, welcomed the thought of free time that would allow him to pursue other interests.

In talking with Cyrus, he laid out ambitious plans, including setting up a US sales operation for SWREG. He expects the sales office to be operational in Denver, Colorado within three months.

Some of the more innovative ambitions he alluded to, got me thinking that perhaps my predictions back in January may have been right on target, it appears this will be a defining year for registration services after all. With Digital River's recent purchase of ShareIt/Element 5, and management changes underway at SWREG, it is apparent that significant changes are in the works.

Cyrus believes that developers are looking for a new type of relationship with their ecommerce providers. Companies that just provide payment processing will go away, and they won't be as valuable as they are today. It is my belief while this might be true for the western world, it is not the case for the east. The developers from less-developed regions cannot simply obtain a merchant account for credit card processing, but perhaps it is in these regions where the most opportunities exists. It was apparent in my recent trip to Russia, that developers from those regions would welcome assistance in bridging the east and the west, and none of the registration services have found an effective way to do this outside of providing multi-currency and traditional registration offerings.

While Cyrus is aware of SWREG's weaknesses in infrastructure and affiliate programs, he is working to partner with others that can provide value in those areas.

While developers are becoming leary of industry consolidations and the sales of registration services, there is likely to be additional consolidations, or at the very least strategic relationships formed in order for the smaller services to compete against the consortium of DR properties. It is Cyrus' belief that in order to trump the leader structural changes will need to occur.

Watch the SWREG website for changes in the coming months, the site will have a new look, better documentation, and SWREG will be releasing a series of press releases announcing many of their new initiatives.


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