The below article from the Mass Hightech Times informs us that smaller technology companies are considering a near 100% virtual model, including the outsourcing of Sales. Their example is a hardware company with a seemingly low price point.
It is Xtra Effort's opinion that outsourcing of Sales is only viable if the product's price point is relatively low, the category mature, and the installation/integration simple. Otherwise it won't work.
Sellers need to have extensive knowledge of their customers, markets, and pain points to be effective in making a corporation feel comfortable to make a capital expenditure with a newer technology that requires a change in enterprise behavior (to adopt among users). Customer intimacy is also required to help the enterprise buyer mitigate political and financial risk.
Only Sales people who are 100% committed to an employer can develop this required mix of knowledge and relationships for an enterprise to embrace change that is externally initiated by a start-up.
Outsourced demand generation is the exception. Appointment setting and market intelligence gathering can be effectively performed by a third party.
Technology start-ups should only outsource their entire Sales cycles if their price point is relatively low, their solutions represent little risk to enterprise decision makers, their product category is mature, and solutions easy to integrate and adopt.
Can you imagine a CIO (or more likely, her subordinate's subordinate) adopting new wireless headsets or a blog widget from a third party Sales agent? Yes, probably.
However, can you imagine a sales agent from a third party being successful in convincing a CIO to embrace a $500k annual commitment to a new order entry system based on Cloud Computing? Probably not.
The Mass High Tech Times article: http://www.masshightech.com/stories/2009/06/15/weekly7-Limited-funds-drive-startups-to-contract-hiring-.html