Microsoft Web PlatformCustomer Solution Case Study

Vehicle Pricing Provider Anticipates User Needs with Interactive and Mobile

OverviewCountry or Region: United StatesIndustry: Manufacturing—Automotive & industrial equipment

Customer ProfileKelley Blue Book is a leading source of new- and used-car values in the United States. The company has 390 employees and is based in Irvine, California.

Business SituationAs a leading Web source of vehicle values, Kelley Blue Book must continually work to provide users with innovative new ways to access and interact with vehicle data.

SolutionBy building its Web site using Windows Server® 2003, Microsoft® SQL Server® 2005, the Microsoft .NET Framework, and Microsoft Silverlight™, Kelley Blue Book has been able to deliver both greater levels of interactivity and mobile support.

Benefits Rapid delivery of new Web site

capabilities and experiences Mobile access to vehicle data Low total cost of ownership,

“With our Silverlight-based client, we can approach advertising in an entirely new way. People are engaged for five to seven minutes, which becomes very attractive to advertisers.”Justin Yaros, Executive Vice President of Product Design and Development, Kelley Kelley Blue Book is a leading provider for new and used automobile values. The company’s Web site, kbb.com, averages 12 million visits per month. To succeed on the Web, the company needs to provide consumers with reliable, immediate access to car values in new and innovative ways, whether users are sitting in front of their PCs or want information via their mobile phones. The company’s use of Microsoft® software gives Kelley Blue Book a Web presence with which it can easily deliver the innovative experiences that customers demand—in turn, helping Kelley Blue Book differentiate itself from its competition and drive new revenues. Just as important, Kelley Blue Book can maintain a reliable Web presence with minimal costs, making it possible for the company to spend more on new product development.

SituationKelley Blue Book has been a leading source of used-car values since 1926, when the company published its first Blue Book of Motor Car Values. For many years, Blue Book® guides were sold mainly to businesses, such as car dealers and financial institutions. However, with the advent of the Internet, Kelley Blue Book saw an opportunity to reach consumers, as well. Today, nearly one out of every three people in the United States who buys a new or used car visits kbb.com. The company also has business-to-business products such as KARPOWER Online®, which is used by automobile dealers and other industry participants.

Since Kelley Blue Book first launched its Web site in 1995, the Internet has fueled the biggest growth in the company’s history. “For many years, our main source of revenue was car dealers, who bought our printed books,” says Justin Yaros, Executive Vice President of Product Design and Development at Kelley Blue Book. “When we first launched kbb.com, we charged $3.95 for a pricing report—but that didn’t go over very well. We pulled the plug on charging a fee for pricing reports after three weeks and began the switch to a business run like radio and television, supported by advertising and partners.”

With the majority of its revenue today derived from advertising and lead generation on kbb.com, the company’s Web site is its crown jewel. Kelley Blue Book must

continually work to deliver innovative new Web site capabilities and customer experiences to attract and retain users, win over advertisers, and compete for visitors with other Web sites. “Our data is syndicated to other Web sites, as well, so how users can interact with the data on kbb.com is just as important as the data itself,” says Yaros. “Consumers want instant access to car values, whether they’re just starting the research process and are sitting at home in front of their PCs or are at a car dealer and need instant information via their   mobile phone. Our internal conversations are always about the customer experience, and our focus today is all about making the site more interactive and accessible in new ways.”

To retain this focus on new customer experiences, Kelley Blue Book must work to minimize the cost of running its Web site. “When it comes to my IT budget, we need operational costs to remain low,” says Yaros. “I want to spend money on developing new products that will drive additional revenues, not on keeping our existing servers up and running.”

Kelley Blue Book must also ensure that its Web site delivers a consistent, reliable customer experience, even during peak traffic times. “We receive more than 12 million visits a month, so the reliability of our Web site is just as important as the accuracy of our data,” says Yaros. “If someone has a bad experience on our site, that’s

“We may be able to develop interesting products with any technology, but only Microsoft gives us what we need to run the entire business.”Justin Yaros, Executive Vice President of Product Design and Development, Kelley Blue Book

likely a user that we’ve lost to the competition.”

SolutionKelley Blue Book is meeting all the above business needs using Microsoft® software, including the Windows Server® 2003 operating system, Microsoft SQL Server® 2005 database management software, and the Microsoft .NET Framework. “We may be able to develop interesting products with any technology, but only Microsoft gives us what we need to run the entire business,” says Yaros. “The depth and breadth of Microsoft software—and the Windows® ecosystem—gives us a great advantage, in that we know a solution can always be found.”

Kbb.com, the company’s “flagship” product, is based on Microsoft ASP.NET 2.0, with an upgrade to ASP.NET 3.5 in the works. The site uses Asynchronous JavaScript and XML (AJAX) programming techniques to reduce the number of roundtrips required between users’ Web browsers and the Web site—in turn, leading to increased responsiveness as users interact with the content on

Web pages. Software development is done using the Microsoft Visual Studio® 2008 Professional development system, and Visual Studio 2005 Team Foundation Server is used as a source code control and build environment.

“Kelley Blue Book is very much a software development company, with about half of all IT resources devoted

Kelley Blue Book is using Microsoft Silverlight to deliver a highly interactive user experience.

to product development,” says Lapin. “I’m a developer at heart, and my personal opinion is that Microsoft development tools such as Visual Studio 2008 and Team Foundation Server provide a huge benefit over other platforms. Developer productivity on Windows is, without a doubt, head and shoulders above that for Linux.”

Integrated IT InfrastructureThe Web servers that host kbb.com are Dell PowerEdge 1950 systems that run the 64-bit version of Windows Server 2003 Standard Edition, and each is configured with one processor and 8 gigabytes of RAM. The database servers are Dell PowerEdge 2950 systems that run 64-bit versions of Windows Server 2003 Standard or Enterprise, along with 64-bit versions of either SQL Server 2005 Standard Edition or Enterprise Edition.

The kbb.com Web site and all other products are supported by a single, integrated data pipeline. Kelley Blue Book receives data on vehicle transactions from all over the United States, from many different sources, ranging from dealer management systems to Microsoft Office Excel® spreadsheets that are filled out and submitted by employees in the field. The company uses SQL Server 2005 Integration Services to transform the data and load it into a SQL Server 2005 relational database, and then uses SQL Server 2005 Analysis Services and business analytics software from SAS to analyze the data and predict residual values.

Processed vehicle value data is accessed by kbb.com and the company’s other products through a service-oriented architecture that Kelley Blue Book developed using Microsoft .NET Framework 2.0. “A service-oriented architecture enables us to quickly and easily get Kelley Blue Book data from where it originates out to our many products,” says Andy Lapin, Director of Architecture for Kelley Blue Book. “And it enables all those products to access the data in a consistent manner, whether they are business-to-consumer products like kbb.com, business-to-business products like KARPOWER Online, or feeds to other Web sites that syndicate our data.”

New Levels of InteractivityWith its current IT infrastructure, Kelley Blue Book can easily execute on its number-one priority: continually delivering new products and customer experiences. One recent such project was the delivery of a highly interactive “Perfect Car Finder® Photo Edition” experience on kbb.com, which the company delivered using the Microsoft Silverlight™ browser plug-in. The project was conceived in mid-2008, when Yaros’s team was having one of its frequent discussions on how the company could further differentiate kbb.com from competing Web sites.

“Someone had stumbled across the HardRock.com Web site, which uses the Deep Zoom technology in Silverlight 2 to let users visually

“A C# developer who had never used Silverlight before was able to deliver a mockup in just two days—without learning any new skills or tools—and complete the project in less than two months.”Andy Lapin, Director of Architecture, Kelley Blue Book

explore, and we realized that we could do something similar with cars,” recalls Yaros. “Most people who come to kbb.com know the make and model of the car they want to research and go from there, primarily getting to the images of a car only after specifying it. Silverlight enabled us to support an entirely new approach in which people can view the images of many cars at once—and interactively adjust which cars are displayed based on characteristics such as body style, price, and mileage.”

From an architectural perspective, the Silverlight-based client is a rich Internet application. It was built by one developer in about eight weeks, with a few hours of assistance from a designer to help with the look and feel. Deep Zoom is used to intelligently load photos of various resolutions that zoom in and out in real time as the user interacts with the slider bars and other controls in the left pane of the user interface.

Support for Mobile UsersKelley Blue Book also took advantage of Microsoft software to add support for mobile users—a consumer need that is clearly growing. “We noticed that kbb.com was getting around 200,000 visits per month from mobile Web browsers,” recalls Lapin. “However, where we get an average of 14 page views per visit from desktop browsers, we were getting only 2 or 3 page views from mobile users, which made it clear that people were abandoning the experience

before they found the information they wanted.”

Working part-time over a four-month period, Lapin built two mobile versions of kbb.com—one for the Apple iPhone, and one for other mobile Web browsers. “As expected, I was able to reuse the existing service-oriented infrastructure we had built for delivering vehicle data to our products, and merely implement new user interfaces,” says Lapin. “We’ve since mobile-enabled one of our dealer products, and that only took two weeks.”

BenefitsWith Microsoft software, Kelley Blue Book is able to successfully run its online business and remain a leader in delivering car-value data and other content on the Web. The company’s choice of software makes it easy to deliver the reliability that users expect, maintain a Web presence with minimal costs, and rapidly deliver new customer experiences that drive Web site traffic and revenues.

“Part of my mandate is to ensure that we continue to innovate so that people take notice and continue to spread the word that kbb.com is the place to go for vehicle values and related content,” says Yaros. “Microsoft software enables us to do just that.” Rapid Delivery of New Web Site Capabilities and ExperiencesKelley Blue Book can rapidly deliver new experiences that enable users to

“In the past, mobile users couldn’t easily get to the information they needed, and would give up after 1 or 2 page views. Today, our mobile sites receive an average of 7 to 10 page views per visit, which is proof that we’re doing a better job of meeting user

interact with car-value data and other information in new ways. One such example is Perfect Car Finder Photo Edition, a user experience unlike anything offered by competing Web sites. “The Silverlight-based client has received more positive feedback than any other thing we’ve done, so we’ll definitely continue to enhance the application,” says Yaros. “We’re excited about what else we can do with it, such as providing the ability to compare two cars side by side and synchronously rotate those views. Or, we may use it to provide users with a new way to view dealer inventory, which is a big push for us in 2009. Today, on most Web sites, people are presented with an HTML-based list and have to drill in and back out of that list to explore a dealer’s inventory. With Silverlight, we could deliver a more interactive ‘on the lot’ experience.”

Yaros, who has profit-and-loss responsibility for kbb.com, is also excited about the potential for a different advertising model. “Users look at a standard Web page for approximately 10 seconds, and advertisers know this,” he says. “With our Silverlightbased client, we can approach advertising in an entirely new way. People are engaged for five to seven minutes, which becomes very attractive to advertisers.”

Although the customer experience delivered by the Silverlight-based client is new and innovative from a developer perspective, the technology used to deliver that

experience was already familiar. “A C# developer who had never used Silverlight before was able to deliver a mockup in just two days—without learning any new skills or tools—and complete the project in less than two months,” says Lapin. “Perception among some people is that Silverlight is the Microsoft version of Adobe Flash. However, you don’t get Deep Zoom in Flash, and we could never have used Flash to do what we did in only eight weeks.”

Mobile Access to Vehicle DataThrough its mobile Web sites, Kelley Blue Book is meeting user demand for anywhere, anytime access to its data. “In the past, mobile users couldn’t easily get to the information they needed and would give up after 1 or 2 page views,” says Lapin. “Today, our mobile sites receive an average of 7 to 10 page views per visit, which is proof that we’re doing a better job of meeting user needs. Mobile traffic is still a small percentage of total site traffic, but it is increasing in terms of sheer volume and percentage of total traffic. Demand is clearly there, even though we haven’t marketed our mobile capabilities much at all.”

The new mobile sites have yielded advertising benefits, as well. “We sold advertising space for our mobile sites to one company for November and December of 2008, and already have two more advertisers lined up for 2009,” says Yaros. “Not only are we ahead of our competition with respect to the mobile experience we’re able to deliver, but we’ve gained a new

“Not only are we ahead of our competition with respect to the mobile experience we’re able to deliver, but we’ve gained a new source of revenue.”Justin Yaros, Executive Vice President of Product Design and Development, Kelley Blue Book

source of revenue. Best of all, the investment to begin realizing that new source of revenue was very low because we were able to reuse the infrastructure we already have with very little developer effort required.”

For Yaros, the fact that the company could support mobile users so well—and so easily—came as a pleasant surprise. “It’s not like we formally set out to build a mobile site,” he says. “Andy did it as time allowed and with no funding. We had wanted to provide mobile support for a while, but it had never been a priority because the right business model had never been clear, and thus, it had been difficult to muster enthusiasm within the company. However, when Andy showed me what he had built, I was thrilled. We showed it to our Director of Advertising Products, and soon after that we had our first advertiser for our new mobile sites.”

Like Lapin, Yaros also points out that traffic patterns are proving the mobile sites’ usefulness to consumers. “On kbb.com, traffic peaks on Mondays,” he says. “On the mobile sites, traffic peaks on weekends, when people are out shopping for cars. So there’s clearly a demand. There’s a lot that we can do in the area of mobile support, and our IT infrastructure makes it easy. We’re really excited about the whole area.”

Strong Reliability and SecurityEven as Kelley Blue Book works to deliver new customer experiences, it is able to deliver a trouble-free

customer experience to millions of visitors each month. “In terms of security and reliability, everything has been really solid,” says Yaros. “We’ve never had a security incident, and I can’t remember the last time that our Web site was down. The only issues we’ve faced have been due to growing pains, such as fine-tuning performance for the Web site—an area where Microsoft Support and our technical account manager have been a great help.”

Low Total Cost of OwnershipThanks to the ease of management provided by Microsoft software, Kelley Blue Book is able to minimize the total cost of ownership (TCO) for its Web site. ”By far, the largest component of TCO is labor costs,” says Lapin. “And, because our IT infrastructure is so efficient to run and support, we can spend most of our IT labor budget on new product development. Our ratio of developers to system administrators is about 10:1, yet our system administrators are able to easily stay on top of all the new products and applications we’re delivering. The Web site itself only requires two-and-a-half system administrators, and, although we’re a big user of SQL Server 2005, we’re able to run the entire company with only two database administrators.”

Lapin has a similar view on software licensing costs, another (albeit smaller) component of TCO, preferring to view them in the context of the benefits provided by the software rather than in isolation.

“Sure, we spend a little bit of money on software licensing costs,” says Lapin. “But when you look at our software licensing costs versus labor costs for development and operations, the amount we spend on software is laughable. The superior levels of productivity we’re able to realize with Microsoft software more than make up for any licensing costs—many, many times over. When we take a long-term view at what it takes to build good, sustainable products, the answer is clearly Microsoft software.”

Microsoft Web PlatformDesign, develop, and deliver innovative Web solutions for your business. The Microsoft Web Platform offers all the tools, technologies, and server software necessary to create satisfying Web experiences.

To learn more, go to:www.microsoft.com/web

For More InformationFor more information about Microsoft products and services, call the Microsoft Sales Information Center at (800) 426-9400. In Canada, call the Microsoft Canada Information Centre at (877) 568-2495. Customers who are deaf or hard-of-hearing can reach Microsoft text telephone (TTY/TDD) services at (800) 892-5234 in the United States or (905) 568-9641 in Canada. Outside the 50 United States and Canada, please contact your local Microsoft subsidiary. To access information using the World Wide Web, go towww.microsoft.com

For more information about Kelley Blue Book, visit the Web site at:www.kbb.com

This case study is for informational purposes only. MICROSOFT MAKES NO WARRANTIES, EXPRESS OR IMPLIED, IN THIS SUMMARY.

Document published February 2009

Software and Services Microsoft Server Software Portfolio

− Windows Server 2003 Standard− Windows Server 2003 Enterprise− Microsoft SQL Server 2005

Standard Edition− Microsoft SQL Server 2005

Enterprise Edition Microsoft Visual Studio

− Visual Studio 2008 Professional Edition

− Visual Studio 2005 Team Foundation Server

Technologies− Microsoft ASP.NET− Microsoft .NET Framework 2.0− Microsoft Silverlight 2

Hardware Dell PowerEdge 1950 and 2950

server computers