Wine Technology Blog @ WineWeb.com

To support Earth Day, we have purchased carbon offsets equivalent to the carbon dioxide generated by the electricity used to power our web and email servers. You'll notice the "CO2 Neutral" seals that appear throughout the website. Visitors will also see the seal on the shopping cart pages of all wineries and wine merchants that use our e-commerce system.

Purchasing the carbon offsets was easy to do, relatively inexpensive, and we encourage other Internet services companies to explore similar ways to offset their carbon footprint.

I've seen a couple of press releases recently touting the great financing rates available to purchase winery technology solutions. Wow, that stuff must be way overpriced if you have to go into debt to get it! Maybe the technology salesperson has convinced the winery that they need a data center and all the associated hardware and software (cha-ching goes the sales commissions on that).I guessing that most winery owners would much prefer to finance barrels than they would technology. Oh, and the financing is just on the initial fees, not the ongoing operation and maintenance costs.

I should state that WineWeb does have a payment plan. We break up the setup costs: half billable when a winery registers, the other half billable when setup is complete. And if a winery is really strapped for funds, they can charge it to their credit card and pay it off over a couple of months. But we're talking hundreds of dollars, not tens of thousands. I really enjoy when a prospective client gets that "ah ha" moment and says "all this for only this amount of money!" We tell them they can pay more, but no one has done that yet.

We've rebranded our blog as WineTechnologyWorks.com. The focus will be on technology in the wine industry: what works and what doesn't, with an attempt to focus on topics that may evoke (or provoke) discussion. WineWeb has always been focused on providing technology that works and that provides real value to its clients. We constantly see good stuff that we'd like to highlight, as well as items that make us scratch our heads in wonder. We've had that domain name for a while and liked the play on words, so we'll try to put it to good use.

Now if I can force myself to get this stuff from my head to the keyboard...

OK, so this isn't directly about wine, but sometimes a news item is just so amazing that I have to comment on it. The news was that Satyam, one of the large Indian software companies, had been misstating their revenues and cash. Having spent nearly 10 years directly competing with Satyam for outsourcing projects and having spent almost 10 years as a CPA with one of the Big 4 accounting firms, I feel qualified to comment on this.

The company reported a cash balance of 53 billion rupees (about 1 billion US$), when in fact they had only 3 billion rupees in the bank. It seems that a white lie made several years ago just kept growing until it was out of control, and they had to come clean. What's amazing here is that PriceWaterhouseCoopers missed it in their audits (and no, I used to work for Deloitte). I don't have to pull out one of my CPA textbooks to remember that verifying cash is one of the most basic auditing tasks. How do you miss a billion dollars?? Heads will roll at PWC, partners will be shot (or maybe should be). What a mess!

What's sad it that this situation will likely tarnish all Indian software companies. I'm a firm believer in leveraging a global workforce to provide value, quality and competitiveness in any industry. In my own industry, I've not been surprised at a company having to layoff many people after bragging about spenging $100/hour to develop a software application. Those economics just aren't sustainable in these times.

So, to happier times, and a Happy New Year. Cheers!

We issued this press release this morning...

WineWeb.com now offers a Premier Bundle of its services for wineries, at an attractive fixed cost per month. The bundle includes all services to manage a winery's direct sales, including website, e-commerce and point-of-sale. "We want to provide a cost-effective way for medium-sized wineries to use our services, especially in these tough economic times," states Ron Kreutzer, President and Founder of WineWeb Enterprises, Inc. "This bundled service saves money for wineries with monthly online sales over $20,000" continued Kreutzer.

The WineWeb's Premier Bundle includes services to create and manage a winery's website, e-commerce, point-of-sale, wine clubs, direct-to-trade sales, email campaigns and affiliate sales. Included in the services are its advanced content management system, customer repository and integration with shipping carriers, fulfillment centers, payment gateways, and compliance services. Pricing is $295 per month with a one-time $1,500 setup fee. There is no contract commitment period and no additional revenue share fee. For smaller wineries, WineWeb continues to offer website plans starting at $25 and $60 per month.

Recently, when potential clients come to me with questions about our company and services, I can sense that the economic conditions are putting more of an emphasis on business stability in their potential business partners. In addition to the typical questions about how long we've been in business and how many clients we serve, I'm getting questions on how we intend to survive any economic downturn. 

I'm thankful for these questions, as gone are the days when being larger gave you an advantage in business survival. If I were to put on my CPA hat (actually dusty green visor from what seems like a lifetime ago), I could think of some questions that companies should be asking potential vendors.

1. Do you have a positive cash flow each month?
2. Could you still make a profit on 20% less revenue each month?
3. Is there any outside debt on your balance sheet?
4. Have you had positive growth for the past 3, 6 and 12 months?
5. Do you have venture capital funding or investors that you need to repay in the next 2 years. If so, can your monthly profit cover the payments?
6. Will you need additional funding to meet operating costs in the next year?
7. Do you have a line of credit? If so, have you borrowed against more than half of that amount?
8. Have you had to layoff any employees in the past year?
9. Have you had to reduce the scope of any service enhancements or growth plans in the past year?

Getting answers to questions like these should give a company a better comfort level (or lack of comfort) with a potential vendor. For the record, my answers are: 1.Yes, 2.Yes, 3.No, 4.Yes, 5.No, 6.No, 7.No, 8.No, 9.No.

A group of us went up to a local winery the weekend before last to help harvest grapes. As I was picking Baco Noir grapes, I was thinking about all the steps needed to turn the grapes into a good wine, then all the steps needed to actually turn the wine into revenue for the business. Let's see, a relatively unknown grape, produced by a winery off the beaten path, with limited resources during harvest time -- is this situation that different from many of the 6,000 plus wineries all across this country? Probably not.

So, how could technology help with some of these steps? If the winery had a mailing list of customers and interested persons (obviously built up over time), that could be used to get people into the vineyard and winery to provide additional manpower during harvest. I'm guessing that there would be a lot of interest in being part of the winemaking process. Combine that with an effective website, blog and an online ordering function, and the winery can explain how/why their wines are good, generate interest, and provide a way to get the wine. Would that solve all the winery's issues? No, but it could fill some holes in the current business model.

Overall an enjoyable day, and further confirmation that what we do here is important.

We just finished our annual PCI Data Security Standards asssessment and have made sure that we are still in compliance for accepting and storing credit card data. Luckily, having done over 70 computer control audits in what feels like another lifetime, this process was relatively easy, although the 200 questions did take some time to answer and verify with our policies and procedures.

While previously there was an exemption for small companies, now every merchant that accepts credit cards must complete an annual assessment in order to be compliant with this requirement (www.pcisecuritystandards.org for more info). If you use an e-commerce service like ours (WineWeb), then the process is simpler with about 30 questions in the assessment. However, if your company has it's own shopping cart software running on a web server and you store credit card data electronically, then you're into the long questionnaire, which requires things like an "Encryption Key Custodian Acknowledgement" and an "Incident Response Plan". You've got those, right?

Many wineries are focusing on the environmental impact of producing their wines, and while that's good, it's only part of the overall green effort. Wines & Vines published an article on a study prepared by a student in Nova Scotia that shows that a consumer going to the wine shop to buy a wine can add half to the overall environmental impact of that product. This raises a lot of questions in my mind, like what's the impact of making a special trip to buy one bottle versus a case, versus stopping by the wine shop on your way home from work, versus having wine shipped directly to you. It would be great to see an eco-conscious winery show the environmental savings (if there is any) from having their wine shipped directly to the consumer. Could "Go green, have your wine shipped" be a slogan in the near future?