By Peter Graff Thu Dec 29, 1:04 PM ET
LONDON (Reuters) - If you have an envious streak, you probably shouldn't read this.
Because chances are, Alex Tew, a 21-year-old student from a small town in England, is cleverer than you. And he is proving it by earning a cool million dollars in four months on the Internet.
Selling porn? Dealing prescription drugs? Nope. All he sells are pixels, the tiny dots on the screen that appear when you call up his home page.
He had the brainstorm for his million dollar home page, called, logically enough, www.milliondollarhomepage.com , while lying in bed thinking out how he would pay for university.
The idea: turn his home page into a billboard made up of a million dots, and sell them for a dollar a dot to anyone who wants to put up their logo. A 10 by 10 dot square, roughly the size of a letter of type, costs $100.
He sold a few to his brothers and some friends, and when he had made $1,000, he issued a press release.
That was picked up by the news media, spread around the Internet, and soon advertisers for everything from dating sites to casinos to real estate agents to The Times of London were putting up real cash for pixels, with links to their own sites.
So far they have bought up 911,800 pixels. Tew's home page now looks like an online Times Square, festooned with a multi-colored confetti of ads.
"All the money's kind of sitting in a bank account," Tew told Reuters from his home in Wiltshire, southwest England. "I've treated myself to a car. I've only just passed my driving test so I've bought myself a little black mini."
The site features testimonials from advertisers, some of whom bought spots as a lark, only to discover that they were receiving actual valuable Web hits for a fraction of the cost of traditional Internet advertising.
Meanwhile Tew has had to juggle running the site with his first term at university, where he is studying business.
"It's been quite a difficulty trying to balance going to lectures and doing the site," he said.
But he may not have to study for long. Job offers have been coming in from Internet companies impressed by a young man who managed to figure out an original way to make money online.
"I didn't expect it to happen like that," Tew said. "To have the job offers and approaches from investors -- the whole thing is kind of surreal. I'm still in a state of disbelief."
Friday, December 30, 2005
Tuesday, October 04, 2005
SandHill.com | Finance | New VC Rules for On-Demand Software
New VC Rules for On-Demand Software: "
Expansion round specialists, Insight Venture Partners, provide their list of must-haves for investing in on-demand software companies.
Deven Parekh and Peter Sobiloff, Insight Venture Partners
Sep 23, 05
On-demand is the big game in software today.
We're bullish about the prospects for recurring-revenue software solutions. Whether you call them application service providers (ASPs,) on-demand vendors, or even a subset of software-as-a-service (SaaS) companies, the opportunity is the same: a growing company with streamlined operations that provides a hosted, pay-as-you-go software solution which earns them a steady revenue stream, as well as a satisfied enterprise client base.
But not every software vendor can play successfully in this emerging field. We use a new set of criteria we use to analyze on-demand software vendors as VC investment opportunities.
The Potential for On-Demand
There is a new and emerging market for best-of-breed ASPs. The underlying business model shift away from perpetual licenses to recurring revenue will enable smaller vendors to compete and grow in today's world of software megavendors.
The recurring-revenue model has several advantages for customers. Turn-key implementation. Low maintenance efforts. Continued vendor attention. These advantages will spawn a host of vendors that offer today's enterprise applications via an ASP or recurring-revenue business model.
After these recurring-revenue vendors grow, you'll begin to see ASP rollups: on-demand vendors who team up to offer best-of-breed, on-demand suites of enterprise solutions.
You'll also see some vendors - Salesforce.com for example - emerge with a much bigger footprint in the "
Expansion round specialists, Insight Venture Partners, provide their list of must-haves for investing in on-demand software companies.
Deven Parekh and Peter Sobiloff, Insight Venture Partners
Sep 23, 05
On-demand is the big game in software today.
We're bullish about the prospects for recurring-revenue software solutions. Whether you call them application service providers (ASPs,) on-demand vendors, or even a subset of software-as-a-service (SaaS) companies, the opportunity is the same: a growing company with streamlined operations that provides a hosted, pay-as-you-go software solution which earns them a steady revenue stream, as well as a satisfied enterprise client base.
But not every software vendor can play successfully in this emerging field. We use a new set of criteria we use to analyze on-demand software vendors as VC investment opportunities.
The Potential for On-Demand
There is a new and emerging market for best-of-breed ASPs. The underlying business model shift away from perpetual licenses to recurring revenue will enable smaller vendors to compete and grow in today's world of software megavendors.
The recurring-revenue model has several advantages for customers. Turn-key implementation. Low maintenance efforts. Continued vendor attention. These advantages will spawn a host of vendors that offer today's enterprise applications via an ASP or recurring-revenue business model.
After these recurring-revenue vendors grow, you'll begin to see ASP rollups: on-demand vendors who team up to offer best-of-breed, on-demand suites of enterprise solutions.
You'll also see some vendors - Salesforce.com for example - emerge with a much bigger footprint in the "
Monday, October 03, 2005
SandHill.com | Finance | Consolidation? What Consolidation?
SandHill.com | Finance | Consolidation? What Consolidation?: "OPINION
Consolidation? What Consolidation?
Software industry insiders present their views on the long-anticipated Oracle-Siebel deal: what it means to product innovation, the CRM space, the health of the software industry - and whether it was a good deal in the first place.
M.R. Rangaswami, Sand Hill Group
Sep 16, 05
Finally. The Oracle-Siebel deal is done and the industry can stop speculating about it. Interestingly however, the deal seems to have woken some observers from a deep sleep. Consolidation has been going on for years. The latest deals - specifically Oracle's aggressive buys - have simply made the trend front page news.
But broader awareness of big software mergers is important in and of itself. The sense that young companies cannot make a go of it alone any longer, that they must find a 'Big Brother' to take them under their wing, dampens enthusiasm of many software executives and investors.
This is the wrong reaction. I would argue that innovation and opportunity continue to drive the software industry today - even in the face of these megadeals.
Innovation Continues to Power the Industry
Consolidation is most certainly accelerating. However there are major sectors which have yet to see any major mergers. Take middleware - or business intelligence. There are many small markets which continue to innovate and thrive.
Even in established software categories, innovation thrives. Look at Salesforce.com. NetSuite. These vendors operate in so-called mundane application areas but continue to grow rapidly and flourish at the same time consolidation is going on in their sector.
These upstarts and other vendors are succeeding by innovating - both product- and business model-wise - in areas where megavendors have weaknesses. T"
Consolidation? What Consolidation?
Software industry insiders present their views on the long-anticipated Oracle-Siebel deal: what it means to product innovation, the CRM space, the health of the software industry - and whether it was a good deal in the first place.
M.R. Rangaswami, Sand Hill Group
Sep 16, 05
Finally. The Oracle-Siebel deal is done and the industry can stop speculating about it. Interestingly however, the deal seems to have woken some observers from a deep sleep. Consolidation has been going on for years. The latest deals - specifically Oracle's aggressive buys - have simply made the trend front page news.
But broader awareness of big software mergers is important in and of itself. The sense that young companies cannot make a go of it alone any longer, that they must find a 'Big Brother' to take them under their wing, dampens enthusiasm of many software executives and investors.
This is the wrong reaction. I would argue that innovation and opportunity continue to drive the software industry today - even in the face of these megadeals.
Innovation Continues to Power the Industry
Consolidation is most certainly accelerating. However there are major sectors which have yet to see any major mergers. Take middleware - or business intelligence. There are many small markets which continue to innovate and thrive.
Even in established software categories, innovation thrives. Look at Salesforce.com. NetSuite. These vendors operate in so-called mundane application areas but continue to grow rapidly and flourish at the same time consolidation is going on in their sector.
These upstarts and other vendors are succeeding by innovating - both product- and business model-wise - in areas where megavendors have weaknesses. T"
Monday, August 29, 2005
Tuesday, August 16, 2005
� Open source risks now insurable | Open Source | ZDNet.com
� Open source risks now insurable | Open Source | ZDNet.com: "Open source risks now insurable
-Posted by Dana Blankenhorn @ 8:06 am
General Linux Software Licensing Legal
It may sound silly, but Lloyd's of London is now willing to write policies against the intellectual property risks of open source software. (This Lloyd's bottlestopper is available for just 30 pounds, plus VAT and shipping.)
To understand why this is important, consider how the insurance business works. True insurance covers the unexpected. Most medical insurance isn't really insurance per se, but a form of banking. We know you'll get sick (or at least be prescribed something to prevent it), so we estimate the costs and apportion them out.
Real insurance works differently. Real insurance, the kind of policies Lloyd's writes, is a form of gambling. A capital pool is created and risks are assigned to it. If there are no claims during the policy term, the investors get their money back, plus the premiums paid against it, plus any investment profits they can generate in the meantime. (On the other hand, risks can be unlimited, too.)
Before Lloyd's is going to write a policy, in other words, the chances of loss have to be pretty low.
Despite all the evidence found in courts so far, businesses are still being told there are risks to open source software. The point today is that smart money now knows how low those risks really are."
-Posted by Dana Blankenhorn @ 8:06 am
General Linux Software Licensing Legal
It may sound silly, but Lloyd's of London is now willing to write policies against the intellectual property risks of open source software. (This Lloyd's bottlestopper is available for just 30 pounds, plus VAT and shipping.)
To understand why this is important, consider how the insurance business works. True insurance covers the unexpected. Most medical insurance isn't really insurance per se, but a form of banking. We know you'll get sick (or at least be prescribed something to prevent it), so we estimate the costs and apportion them out.
Real insurance works differently. Real insurance, the kind of policies Lloyd's writes, is a form of gambling. A capital pool is created and risks are assigned to it. If there are no claims during the policy term, the investors get their money back, plus the premiums paid against it, plus any investment profits they can generate in the meantime. (On the other hand, risks can be unlimited, too.)
Before Lloyd's is going to write a policy, in other words, the chances of loss have to be pretty low.
Despite all the evidence found in courts so far, businesses are still being told there are risks to open source software. The point today is that smart money now knows how low those risks really are."
CEOs share secrets of long-term growth - News - ZDNet
CEOs share secrets of long-term growth - News - ZDNet: "Executive panel discusses profit strategy at Software 2005 event
At the Sand Hill Group's Software 2005 conference in Santa Clara, Calif., Cape Horn Strategies President Brian Turchin asks chief executives Jim Cashman (ANSYS), Mike Greenough (SSA Global), Amnon Landan (Mercury) and Bernard Liautaud (Business Objects) to give their thoughts on building a business capable of sustaining long periods of growth and profitability. "
Click above title for free video.
At the Sand Hill Group's Software 2005 conference in Santa Clara, Calif., Cape Horn Strategies President Brian Turchin asks chief executives Jim Cashman (ANSYS), Mike Greenough (SSA Global), Amnon Landan (Mercury) and Bernard Liautaud (Business Objects) to give their thoughts on building a business capable of sustaining long periods of growth and profitability. "
Click above title for free video.
Life, Growth, Leadership - Entrepreneural Style | thinksba.com
Life, Growth, Leadership - Entrepreneural Style | thinksba.com: "Take the 24 hr Promotion Test � Where Does Your Business Stand?
Posted August 9, 2005
What exactly is promotion? Is it the sales you offer new customers or visitors to your website? Or the ads you run in the newspaper? Or the discounts you give to your repeat customers? Yes, all of that and more."
Click title above for full link
Posted August 9, 2005
What exactly is promotion? Is it the sales you offer new customers or visitors to your website? Or the ads you run in the newspaper? Or the discounts you give to your repeat customers? Yes, all of that and more."
Click title above for full link
Monday, August 15, 2005
SandHill.com | Management | 10 New Opportunities for Software Vendors
SandHill.com | Management | 10 New Opportunities for Software Vendors: "OPINION
10 New Opportunities for Software Vendors
The confluence of new technologies, emerging business models and globalization leads to big business prospects for software companies.
Romesh Wadhwani, Symphony Technology Group
Aug 12, 05
We are in an industry that is having trouble coming to grips with reality.
Software companies thought for a long time that our industry could defy gravity and experience double-digit revenue growth forever.
The truth is that our customers no longer value cutting-edge technology over business results. Our investors no longer value growth over profit. Our employees no longer value options over stability. We are in an industry that needs to make dramatic changes to reinvent itself over the next decade.
When I gave this presentation at Enterprise 2005, I asked the 100-plus software CEOs assembled if they felt their company's best opportunity would be to be acquired by Oracle. No one raised their hand. Then I asked who wanted to leave their software company to run an auto supply business because that industry has more upside? Only a few hands went up.
To me, those responses mean there is still a tremendous amount of hope in the industry. There are exciting new developments - in technology and business practices - that will lead to significant new market opportunities in the next few years. Here are ten trends which will lead to those possibilities.
1) Consolidate or Be Consolidated
There is a perception in the industry that 'Darwin's Law' applies: You must acquire or be acquired. This isn't quite the case. Oracle is almost done with its acquisition frenzy. The high valuations they caused are not going to apply to most other vendors.
If you want to be the acquirer, you need acqui"
10 New Opportunities for Software Vendors
The confluence of new technologies, emerging business models and globalization leads to big business prospects for software companies.
Romesh Wadhwani, Symphony Technology Group
Aug 12, 05
We are in an industry that is having trouble coming to grips with reality.
Software companies thought for a long time that our industry could defy gravity and experience double-digit revenue growth forever.
The truth is that our customers no longer value cutting-edge technology over business results. Our investors no longer value growth over profit. Our employees no longer value options over stability. We are in an industry that needs to make dramatic changes to reinvent itself over the next decade.
When I gave this presentation at Enterprise 2005, I asked the 100-plus software CEOs assembled if they felt their company's best opportunity would be to be acquired by Oracle. No one raised their hand. Then I asked who wanted to leave their software company to run an auto supply business because that industry has more upside? Only a few hands went up.
To me, those responses mean there is still a tremendous amount of hope in the industry. There are exciting new developments - in technology and business practices - that will lead to significant new market opportunities in the next few years. Here are ten trends which will lead to those possibilities.
1) Consolidate or Be Consolidated
There is a perception in the industry that 'Darwin's Law' applies: You must acquire or be acquired. This isn't quite the case. Oracle is almost done with its acquisition frenzy. The high valuations they caused are not going to apply to most other vendors.
If you want to be the acquirer, you need acqui"
SandHill.com | Management | Insight from Enterprise 2005
SandHill.com | Management | Insight from Enterprise 2005: "'What keeps you up at night?'
After gathering demographic data, the first question asked by host M.R. Rangaswami was 'what keeps you up at night?' Revenue growth was cited by 76%, followed by profitability (15%), competition (5%), and survival (5%). I expected revenue growth to be a top choice, but was surprised that it was five times that of profitability given the financial community's emphasis on making money.
The next question looked at the 2006 growth rate for the software industry. "
After gathering demographic data, the first question asked by host M.R. Rangaswami was 'what keeps you up at night?' Revenue growth was cited by 76%, followed by profitability (15%), competition (5%), and survival (5%). I expected revenue growth to be a top choice, but was surprised that it was five times that of profitability given the financial community's emphasis on making money.
The next question looked at the 2006 growth rate for the software industry. "
Tuesday, August 09, 2005
SandHill.com | Management | Software Intrigue
SandHill.com | Management | Software Intrigue: "SEC Takes Action Against Former i2 Execs
Bruce Richardson
Aug 08, 05
On July 15th, the U.S. Securities and Exchange Commission (SEC) filed suit against three former officers of i2 Technologies. (Read the SEC complaint here. Read down to page 11 and beyond for the more interesting details, including text from email transcripts about 'selling vapor' and allegations about relationships with Nike, Best Buy and K-mart.) The executives include Greg Brady, former president and CEO; William Beecher, former executive vice president and CFO; and Reagan Lancaster, former president of worldwide operations. "
Bruce Richardson
Aug 08, 05
On July 15th, the U.S. Securities and Exchange Commission (SEC) filed suit against three former officers of i2 Technologies. (Read the SEC complaint here. Read down to page 11 and beyond for the more interesting details, including text from email transcripts about 'selling vapor' and allegations about relationships with Nike, Best Buy and K-mart.) The executives include Greg Brady, former president and CEO; William Beecher, former executive vice president and CFO; and Reagan Lancaster, former president of worldwide operations. "
Monday, August 01, 2005
SandHill.com | Engineering | Navigating Software�s �New World�
SandHill.com | Engineering | Navigating Software�s �New World�: "Navigating Software�s �New World�
The combination of globalization and open source spells opportunity for the software industry.
Kim Polese, SpikeSource
Jul 28, 05
Strange things are happening in the technology business today. In the global economy, the power of nations and corporate conglomerates is giving way to that of individuals and small businesses. At the same time, IT customers are reticent to buy, vendors are merging, and new technologies and business models are taking hold.
Today's software startups - and established vendors - need to navigate these new waters carefully, by understanding the net impact of globalization, innovation and consolidation on the software business.
Thomas L. Friedman's best-seller, The World is Flat, lays out the landscape in which businesses are operating today.
CLICK TITLE ABOVE FOR FULL ARTICLE"
Friday, July 15, 2005
CRN | Keep It Simple: Microsoft Draws Up New Licensing, Financing Policies
CRN | Keep It Simple: Microsoft Draws Up New Licensing, Financing Policies: "Changes are afoot for Microsoft's SMB licensing and financing policies. And the common theme is simplification.
Among other things, the vendor is collapsing best practices from multiple regional efforts into a single, worldwide Open Value licensing program.
Moreover, Microsoft is streamlining its license ordering process. That includes a move away from a controversial program adopted several years ago under which traditional resellers (dubbed Microsoft Software Advisers) were required to work with Authorized License Providers, typically distributors, on licensing deals and were paid a fee for that work. Now, partners can resell Open Value contracts and set their own margins again. Open Value contracts apply to deals of 250 desktops or fewer.
>> 'Licensing terms and complexity affect us. If [Microsoft] can simplify licensing, it will make it easier for customers to buy software through partners.'
�YACOV WROCHERINSKY, INFINITY INFO SYSTEMS
'If you look at some of the things we had in the past, a lot of these one-off singular vertical decisions absolutely made sense either for the customer segment or the business we had. And then over time, the cumulative effect of that is not necessarily great,' said Brent Callinicos, corporate vice president of Worldwide Licensing and Pricing at Microsoft, Redmond, Wash"
Among other things, the vendor is collapsing best practices from multiple regional efforts into a single, worldwide Open Value licensing program.
Moreover, Microsoft is streamlining its license ordering process. That includes a move away from a controversial program adopted several years ago under which traditional resellers (dubbed Microsoft Software Advisers) were required to work with Authorized License Providers, typically distributors, on licensing deals and were paid a fee for that work. Now, partners can resell Open Value contracts and set their own margins again. Open Value contracts apply to deals of 250 desktops or fewer.
>> 'Licensing terms and complexity affect us. If [Microsoft] can simplify licensing, it will make it easier for customers to buy software through partners.'
�YACOV WROCHERINSKY, INFINITY INFO SYSTEMS
'If you look at some of the things we had in the past, a lot of these one-off singular vertical decisions absolutely made sense either for the customer segment or the business we had. And then over time, the cumulative effect of that is not necessarily great,' said Brent Callinicos, corporate vice president of Worldwide Licensing and Pricing at Microsoft, Redmond, Wash"
Europe's Patent on Failure
Europe's Patent on Failure: "Europe's Patent on Failure
EU legislators' inability to find common ground on protecting software innovation will do serious harm to the Continent's tech sector
A proposed law to create Europewide rules for patenting software was soundly defeated July 6 in Strasbourg, France, after five long years of wrangling among the European Commission, the European Parliament, and aggressive lobbyists. In the wake of 'no' votes in France and the Netherlands on the proposed European Constitution, and a bitter rift over the European Union budget in Brussels, the patent fiasco fuels a deepening sense of crisis in Europe. Advertisement"
EU legislators' inability to find common ground on protecting software innovation will do serious harm to the Continent's tech sector
A proposed law to create Europewide rules for patenting software was soundly defeated July 6 in Strasbourg, France, after five long years of wrangling among the European Commission, the European Parliament, and aggressive lobbyists. In the wake of 'no' votes in France and the Netherlands on the proposed European Constitution, and a bitter rift over the European Union budget in Brussels, the patent fiasco fuels a deepening sense of crisis in Europe. Advertisement"
The Sarbanes-Oxley Software Race
The Sarbanes-Oxley Software Race: "The Sarbanes-Oxley Software Race
Providing companies with advanced programs for keeping tabs on financial activity is as hot as a market gets. And so far Virsa is in the lead
Sarbanes-Oxley compliance may be costing the average large company $7.8 million, 70,000 man hours, and countless headaches. But one company's nightmare is another's gold mine.
When entrepreneur Jasvir Gill first heard "
Providing companies with advanced programs for keeping tabs on financial activity is as hot as a market gets. And so far Virsa is in the lead
Sarbanes-Oxley compliance may be costing the average large company $7.8 million, 70,000 man hours, and countless headaches. But one company's nightmare is another's gold mine.
When entrepreneur Jasvir Gill first heard "
Wednesday, July 13, 2005
ROI Analysis Tools
Integration Technology ROI Financial Analysis Tool by Nucleus Research Featured Sponsorship - KnowledgeStorm: " ROI Financial Analysis Tools "
SandHill.com | Sales & Marketing | Software that Makes CIOs Happy
SandHill.com | Sales & Marketing | Software that Makes CIOs Happy: "Software that Makes CIOs Happy
Software that Makes CIOs Happy
Top IT executives from Unilever, BP, Lockheed Martin and Kaiser Permanente provide insights on what software vendors can do to improve their product offerings.
Maryann Jones Thompson, Sand Hill Group
Jul 05, 05
Most I.T. buyers would say that software vendor behavior has improved over the past 5 years. Since the recession when businesses dramatically slashed I.T. budgets, software companies have had no choice but to improve customer relations and product quality in order to remain competitive.
But CIOs speaking at Software 2005 say there is still much room for improvement in software buyer-vendor relations. The panel consisted of the key I.T. executives from major corporations:
* Neil Cameron, CIO, Unilever
* John Leggate, Group VP for Digital Business, BP
* Ed Meehan, COO Information Services, Lockheed Martin
* David Watson, CTO, Kaiser Permanente
Moderator Ernest von Simson, senior partner at Ostriker von Simson, prompted the panelists to speak on "hot button" issues such as consolidation and pricing. The discussion identified a list of "to-dos" for vendors which would make CIOs worldwide "happier" with software products.
Improve Quality
The panel was unanimously unimpressed with product quality. "The quality of software I receive from you is abysmal," says Kaiser's Watson. "I'm in a business where if I put in a bad piece of software, I can actually kill people. We take patient safety and software quality extremely seriously. I need partners that take it just as seriously as we do."
Hospitals are not the only clients with life or death accountability. "At Lockheed Martin, we have more lines of code than Microsoft in the products we deliver," says Meehan, complaining that the enterprise software vendors he purchases from do not have the same standards of quality. "The difference is that our products have to work because we have lives at stake, missions at stake."
Add Value, Not Complexity
"Most software adds complexity," says BP's Leggate, speaking for many critics of the enterprise software business. "We're looking for software that adds unique value to our corporation."
"The complexity forces companies to invest in maintenance and integration work which seems to have no return for the business. This places the CIO in a bad position," says Unilever's Cameron. "All other parts of the business can negotiate away expenses with no ROI... It makes me not want to buy software."
Build Dialogue
Software vendors have long been criticized for a lack of strategic, consultative selling. The CIO comments seem to indicate that vendors are trying to be true business partners - but not quite there yet. "Please don't tell me you're going to solve all my problems. Vendors are continually using that pitch," says Cameron. "Ask me what my problems are."
Adds Leggate, "If you're going to set out to build good stuff, come and talk to me first," We want to work with companies at a level of strategy, not at a level of selling boxes and disks."
Be Flexible
All panelists expressed an interest in new vendor business and pricing models. "The ASP model was static," says Watson. Buying software as a service allows enterprises to purchase more than just an application; it can also come with an additional piece of intellectual property. "Software as a service is more flexible."
As vendors increasingly focus on service or subscription models, it is important to remember that all customers may not want the same model - or the same model every time. Adaptability is key. "We like to go to our vendors and say, 'Can you do it this way?'" says Meehan. "Most of the time, it works out."
Embrace Reality
Even at companies with large IT budgets, funds available for new initiatives are still scarce. Meehan explains Lockheed Martin has grown 13 percent over the past 10 years but the IT budget has only grown 1 to 1.5 percent.
BP has a similar situation. "The headroom for new software is only $10, $20, $30 million a year," says Leggate of BP's budget. "We care deeply about innovation. But we need things that fit our business and take our company forward but not cause integration problems."
Smooth Merger Impact
Too often, customers are bearing the brunt of industry consolidation. "I don't know how many times I've been negotiating for a product, purchase one and then end up with the other because of an acquisition. You think you know what you're buying but then you have to factor in what's going to change as a result of the acquisition," says Meehan. "We look for value, ease of use, ease of dealing with company and flexibility in our deals. The consolidation going on in the industry adds another layer of complexity."
Enhance Security
IT security remains a tremendous challenge for enterprises. Software vendors need to do more to help fight the battle. "Today I am spending tremendous amounts of money to protect the business environment," says Meehan. Lockheed Martin tracked 56,000 viruses two years ago. Last year that figure hit 10 million. The ramifications of the situation are huge. "How can we get 130,000 people patched against a vulnerability before the hacker community figures out how to exploit it?"
Share Responsibility
"I'm looking for [vendors] to have some skin in the game," says Watson. "When it works, I'm happy to pay you because I like 'win-wins.'" But too often when it doesn't work, vendors wrap themselves in warranty provisions and eliminate their downside. "I don't believe that is a fair exchange in value."
Speed Industry Evolution
Buyers appreciate that the software industry is maturing and evolving. But the dynamics and timing of the evolution are frustrating. "We're all looking to see the future and bring the future forward," says Cameron. "When we see the future, our biggest frustration is 'How do we get there faster?' What we've got is SOA and I won't live to see it - and I'm young... So we have to get after these things faster so that we can bring them to the business and see the benefit."
"If you can [provide a solution] in 4 months for less than a million dollars, I'm ecstatic," says Meehan. "I think the technology is moving in that direction. We don't have time for the two-to-three year, multimillion dollar engagement anymore. We're expecting quick solutions to real business problems."
Maryann Jones Thompson is editor of SandHill.com. To view the entire Software 2005 CIO panel, visit the post-conference video page click here.
Software that Makes CIOs Happy
Top IT executives from Unilever, BP, Lockheed Martin and Kaiser Permanente provide insights on what software vendors can do to improve their product offerings.
Maryann Jones Thompson, Sand Hill Group
Jul 05, 05
Most I.T. buyers would say that software vendor behavior has improved over the past 5 years. Since the recession when businesses dramatically slashed I.T. budgets, software companies have had no choice but to improve customer relations and product quality in order to remain competitive.
But CIOs speaking at Software 2005 say there is still much room for improvement in software buyer-vendor relations. The panel consisted of the key I.T. executives from major corporations:
* Neil Cameron, CIO, Unilever
* John Leggate, Group VP for Digital Business, BP
* Ed Meehan, COO Information Services, Lockheed Martin
* David Watson, CTO, Kaiser Permanente
Moderator Ernest von Simson, senior partner at Ostriker von Simson, prompted the panelists to speak on "hot button" issues such as consolidation and pricing. The discussion identified a list of "to-dos" for vendors which would make CIOs worldwide "happier" with software products.
Improve Quality
The panel was unanimously unimpressed with product quality. "The quality of software I receive from you is abysmal," says Kaiser's Watson. "I'm in a business where if I put in a bad piece of software, I can actually kill people. We take patient safety and software quality extremely seriously. I need partners that take it just as seriously as we do."
Hospitals are not the only clients with life or death accountability. "At Lockheed Martin, we have more lines of code than Microsoft in the products we deliver," says Meehan, complaining that the enterprise software vendors he purchases from do not have the same standards of quality. "The difference is that our products have to work because we have lives at stake, missions at stake."
Add Value, Not Complexity
"Most software adds complexity," says BP's Leggate, speaking for many critics of the enterprise software business. "We're looking for software that adds unique value to our corporation."
"The complexity forces companies to invest in maintenance and integration work which seems to have no return for the business. This places the CIO in a bad position," says Unilever's Cameron. "All other parts of the business can negotiate away expenses with no ROI... It makes me not want to buy software."
Build Dialogue
Software vendors have long been criticized for a lack of strategic, consultative selling. The CIO comments seem to indicate that vendors are trying to be true business partners - but not quite there yet. "Please don't tell me you're going to solve all my problems. Vendors are continually using that pitch," says Cameron. "Ask me what my problems are."
Adds Leggate, "If you're going to set out to build good stuff, come and talk to me first," We want to work with companies at a level of strategy, not at a level of selling boxes and disks."
Be Flexible
All panelists expressed an interest in new vendor business and pricing models. "The ASP model was static," says Watson. Buying software as a service allows enterprises to purchase more than just an application; it can also come with an additional piece of intellectual property. "Software as a service is more flexible."
As vendors increasingly focus on service or subscription models, it is important to remember that all customers may not want the same model - or the same model every time. Adaptability is key. "We like to go to our vendors and say, 'Can you do it this way?'" says Meehan. "Most of the time, it works out."
Embrace Reality
Even at companies with large IT budgets, funds available for new initiatives are still scarce. Meehan explains Lockheed Martin has grown 13 percent over the past 10 years but the IT budget has only grown 1 to 1.5 percent.
BP has a similar situation. "The headroom for new software is only $10, $20, $30 million a year," says Leggate of BP's budget. "We care deeply about innovation. But we need things that fit our business and take our company forward but not cause integration problems."
Smooth Merger Impact
Too often, customers are bearing the brunt of industry consolidation. "I don't know how many times I've been negotiating for a product, purchase one and then end up with the other because of an acquisition. You think you know what you're buying but then you have to factor in what's going to change as a result of the acquisition," says Meehan. "We look for value, ease of use, ease of dealing with company and flexibility in our deals. The consolidation going on in the industry adds another layer of complexity."
Enhance Security
IT security remains a tremendous challenge for enterprises. Software vendors need to do more to help fight the battle. "Today I am spending tremendous amounts of money to protect the business environment," says Meehan. Lockheed Martin tracked 56,000 viruses two years ago. Last year that figure hit 10 million. The ramifications of the situation are huge. "How can we get 130,000 people patched against a vulnerability before the hacker community figures out how to exploit it?"
Share Responsibility
"I'm looking for [vendors] to have some skin in the game," says Watson. "When it works, I'm happy to pay you because I like 'win-wins.'" But too often when it doesn't work, vendors wrap themselves in warranty provisions and eliminate their downside. "I don't believe that is a fair exchange in value."
Speed Industry Evolution
Buyers appreciate that the software industry is maturing and evolving. But the dynamics and timing of the evolution are frustrating. "We're all looking to see the future and bring the future forward," says Cameron. "When we see the future, our biggest frustration is 'How do we get there faster?' What we've got is SOA and I won't live to see it - and I'm young... So we have to get after these things faster so that we can bring them to the business and see the benefit."
"If you can [provide a solution] in 4 months for less than a million dollars, I'm ecstatic," says Meehan. "I think the technology is moving in that direction. We don't have time for the two-to-three year, multimillion dollar engagement anymore. We're expecting quick solutions to real business problems."
Maryann Jones Thompson is editor of SandHill.com. To view the entire Software 2005 CIO panel, visit the post-conference video page click here.
M&A activity by industry and SIC code, including valuation multiples and buyer activity.
Mosaic Capital - Industry Reports: "M&A activity by industry and SIC code, including valuation multiples and buyer activity."
Monday, July 11, 2005
State of the Venture Capital Industry; Analysis of Data Shows That Who You Know is Top Driver of VC Returns
PALO ALTO, Calif.--(BUSINESS WIRE)----An overview of the current state of the venture capital industry shows that some of the common perceptions about the factors that drive profit for the top firms are outdated.
Steve Bird, a general partner at leading Silicon Valley-based venture capital firm Focus Ventures today published a white paper titled "Private Equity or Personal Equity: Why Who You Know Still Drives Venture Capital Returns." Focus Ventures provides expansion-stage capital for leading software, communications and semiconductor companies.
By combining the data of industry watchers, such as VentureOne and Thomson Venture Economics, with Focus Ventures' analysis of returns from more than 8,000 venture financings from 1980-2003, the new white paper debunks, confirms, and forces caveats on some of the prevailing myths about the venture industry.
There were three major findings from Focus' research:
-- Despite the proliferation of VC firms, only 40-50 VC firms still create the bulk of industry value. The same small group of firms has consistently created the majority of value in the VC industry over the last 20 years, and their share of total industry profits has increased, not decreased, over time.
-- Stage doesn't matter... much. Perhaps the biggest myth in venture capital is that only early stage investors earn high returns. Focus Ventures found that if you take out the aberrant "bubble" year of 1999, when a substantial disparity in returns for early versus late stage skews the comparison, late-stage firms' internal rate of return (IRR) matched that of early-stage firms over the last 20 years. The report also found that, while late stage investors pay about twice as much for their equity, they also nearly double the odds of a pay-out, hold their investments half as long as early stage investors and enjoy more predictable returns.
-- Who you know is everything. The quality of the relationships that general partners build over years in the business influences VC fund returns the most, more so than sector, stage and geography. High returns and long-standing relationships with the financial community, entrepreneurs, customers, suppliers and scientists earn a firm access to the best deals, and ultimately to better performance.
"Together, these findings reinforce a notion that is intuitive, but bears repeating: that it is the quality of the startups that drives VC returns," said Bird. "And since only a handful of firms and general partners get to invest in the best startups, success in venture capital still boils down to one thing: relationships."
The findings show that only a handful of initial public offerings (usually 30 or fewer) account for the bulk (70%) of industry profits in most years. The grip of the top 50 or so venture capital firms that have invested in those IPOs is tightening, not loosening.
That research presents a quandary for limited partners: if they can't directly access the best deals through top-tier early-stage funds, should they go to other avenues such as seed and angel investments (highly risky), late-stage funds (the best of which invest later in the life of the highest quality startups), or even funds of funds to get into the most desirable investments?
"If none of these options are possible, or palatable, limited partners should avoid compromise," said Bird. "History has shown that, unless you can capture a piece of the very best deals in venture capital, your money may be better off in the public markets," Bird concluded.
To view a copy of Focus Ventures' white paper, go to: www.focusventures.com/whitepaper_who_you_know
About Focus Ventures
Focus Ventures is the leading expansion stage venture capital firm that invests in emerging market leaders in the software, semiconductor and communications industries. Focus Ventures currently manages $570 million, having closed its first fund in October 1997 and Focus Ventures II in December 1999. Focus Ventures offers its portfolio companies access to high quality partners in Asia and an extensive network of resources focused specifically on driving top line revenue growth through customer introductions and by establishing distribution channels, joint ventures and licensing arrangements. Since the firm's inception, Focus Ventures has invested in 83 companies and has had 20 IPOs and seven acquisitions by public companies. A select number of portfolio companies that have gone public include: Active Software, Agile Software, Alteon WebSystems, BroadBase Software, Chordiant Software, Commerce One, Copper Mountain Networks, Corio, CoSine Communications, Interwoven, Loudcloud, Niku, Pixelworks, and Verisity. For more information on Focus Ventures or to read Steve Bird's full white paper, visit www.focusventures.com.
The Blueshirt Group for Focus Ventures Jenny Spitz, 415-217-7722 jenny@blueshirtgroup.com
07/11/2005 10:00 ET
Steve Bird, a general partner at leading Silicon Valley-based venture capital firm Focus Ventures today published a white paper titled "Private Equity or Personal Equity: Why Who You Know Still Drives Venture Capital Returns." Focus Ventures provides expansion-stage capital for leading software, communications and semiconductor companies.
By combining the data of industry watchers, such as VentureOne and Thomson Venture Economics, with Focus Ventures' analysis of returns from more than 8,000 venture financings from 1980-2003, the new white paper debunks, confirms, and forces caveats on some of the prevailing myths about the venture industry.
There were three major findings from Focus' research:
-- Despite the proliferation of VC firms, only 40-50 VC firms still create the bulk of industry value. The same small group of firms has consistently created the majority of value in the VC industry over the last 20 years, and their share of total industry profits has increased, not decreased, over time.
-- Stage doesn't matter... much. Perhaps the biggest myth in venture capital is that only early stage investors earn high returns. Focus Ventures found that if you take out the aberrant "bubble" year of 1999, when a substantial disparity in returns for early versus late stage skews the comparison, late-stage firms' internal rate of return (IRR) matched that of early-stage firms over the last 20 years. The report also found that, while late stage investors pay about twice as much for their equity, they also nearly double the odds of a pay-out, hold their investments half as long as early stage investors and enjoy more predictable returns.
-- Who you know is everything. The quality of the relationships that general partners build over years in the business influences VC fund returns the most, more so than sector, stage and geography. High returns and long-standing relationships with the financial community, entrepreneurs, customers, suppliers and scientists earn a firm access to the best deals, and ultimately to better performance.
"Together, these findings reinforce a notion that is intuitive, but bears repeating: that it is the quality of the startups that drives VC returns," said Bird. "And since only a handful of firms and general partners get to invest in the best startups, success in venture capital still boils down to one thing: relationships."
The findings show that only a handful of initial public offerings (usually 30 or fewer) account for the bulk (70%) of industry profits in most years. The grip of the top 50 or so venture capital firms that have invested in those IPOs is tightening, not loosening.
That research presents a quandary for limited partners: if they can't directly access the best deals through top-tier early-stage funds, should they go to other avenues such as seed and angel investments (highly risky), late-stage funds (the best of which invest later in the life of the highest quality startups), or even funds of funds to get into the most desirable investments?
"If none of these options are possible, or palatable, limited partners should avoid compromise," said Bird. "History has shown that, unless you can capture a piece of the very best deals in venture capital, your money may be better off in the public markets," Bird concluded.
To view a copy of Focus Ventures' white paper, go to: www.focusventures.com/whitepaper_who_you_know
About Focus Ventures
Focus Ventures is the leading expansion stage venture capital firm that invests in emerging market leaders in the software, semiconductor and communications industries. Focus Ventures currently manages $570 million, having closed its first fund in October 1997 and Focus Ventures II in December 1999. Focus Ventures offers its portfolio companies access to high quality partners in Asia and an extensive network of resources focused specifically on driving top line revenue growth through customer introductions and by establishing distribution channels, joint ventures and licensing arrangements. Since the firm's inception, Focus Ventures has invested in 83 companies and has had 20 IPOs and seven acquisitions by public companies. A select number of portfolio companies that have gone public include: Active Software, Agile Software, Alteon WebSystems, BroadBase Software, Chordiant Software, Commerce One, Copper Mountain Networks, Corio, CoSine Communications, Interwoven, Loudcloud, Niku, Pixelworks, and Verisity. For more information on Focus Ventures or to read Steve Bird's full white paper, visit www.focusventures.com.
The Blueshirt Group for Focus Ventures Jenny Spitz, 415-217-7722 jenny@blueshirtgroup.com
07/11/2005 10:00 ET
Tuesday, July 05, 2005
Friday, July 01, 2005
Tuesday, June 21, 2005
Monday, June 20, 2005
Sunday, June 19, 2005
Friday, June 17, 2005
Thursday, June 16, 2005
Tuesday, June 14, 2005
The venture capital party is really over, and it won't be revived for years.
Boston.com / Business / Party pooper: "The venture capital party is really over, and it won't be revived for years. "
Tuesday, May 17, 2005
At Siebel, Rumors Fill the Void: Shaheen's Game Plan
At Siebel, Rumors Fill the Void: "MAY 16, 2005 � Editions: N. America Europe Asia Edition Preference
NEWS ANALYSIS
By Sarah Lacy
At Siebel, Rumors Fill the Void
The whispers range from layoffs to takeovers. Meanwhile, investors aren't getting what they crave -- new CEO George Shaheen's game plan
On May 5, Siebel Systems (SEBL ) investors and analysts gathered for a powwow with company execs in New York, hoping for a change in tune from an outfit company that so far has refused to tell them what they want to hear: Mainly, that the embattled Silicon Valley software maker will use its $2.2 billion in cash to issue a dividend"............
NEWS ANALYSIS
By Sarah Lacy
At Siebel, Rumors Fill the Void
The whispers range from layoffs to takeovers. Meanwhile, investors aren't getting what they crave -- new CEO George Shaheen's game plan
On May 5, Siebel Systems (SEBL ) investors and analysts gathered for a powwow with company execs in New York, hoping for a change in tune from an outfit company that so far has refused to tell them what they want to hear: Mainly, that the embattled Silicon Valley software maker will use its $2.2 billion in cash to issue a dividend"............
Friday, May 13, 2005
SandHill.com | Management | 10 Ways to Maximize Employee Value
SandHill.com | Management | 10 Ways to Maximize Employee Value: "Employees are arguably a software company�s most important asset. Here�s how to create an environment that improves their performance.
Dr. James Goodnight, CEO, SAS"
Dr. James Goodnight, CEO, SAS"
Thursday, May 12, 2005
Friday, May 06, 2005
SandHill.com | Conferences: Software 2005: Proceedings
SandHill.com | Conferences: Software 2005: Proceedings: "Software 2005: Proceedings"
Wednesday, May 04, 2005
Monday, May 02, 2005
Thursday, April 28, 2005
Saturday, April 23, 2005
RedPrairie to be Acquired by Francisco Partners
Source: ARC Wire
RedPrairie Corporation, a provider of supply chain technology solutions that enable business process transformation announced it has entered into a definitive agreement to be acquired by Francisco Partners, a technology-focused private equity funds.
Francisco Partners is a technology-focused investment firm. It invests in public and private technology companies at inflection points, where its strategic insight and long-term focus give it a differentiated view of investment value. Francisco Partners provides transformational capital by working in close concert with the management team to reposition, recapitalize, or otherwise rejuvenate companies to support strong long-term value creation.
Adrian Gonzalez, ARC Advisory Group, commented, "This news confirms a rumor that had been circulating for a couple of weeks. As the software landscape continues to consolidate--and the large enterprise players like Oracle, SAP, SSA Global, and Microsoft become more powerful--vendors like RedPrairie are being forced to think defensively and find new sources of capital to accelerate growth. Going public continues to be a challenge for small and midsized software vendors, especially with the added costs and constraints inflicted by Sarbanes-Oxley. Therefore, it's not surprising that RedPrairie and others are going the private equity route--i.e. consolidating ownership under one entity and pursuing a roll-up strategy (a strategy that's easier to pursue as a private entity instead of a public company). The rumor that was floating around also said that a large Transportation Management Systems vendor was also being acquired. It remains to be seen whether this comes true, but additional acquisitions will certainly occur this year. What does this mean to customers? Being acquired by an equity firm is arguably less disruptive than being acquired by another software company. So in the near term, it's business as usual. It remains to be seen what changes Francisco Partners makes down the road from a strategy and acquisitions perspective."
RedPrairie Corporation, a provider of supply chain technology solutions that enable business process transformation announced it has entered into a definitive agreement to be acquired by Francisco Partners, a technology-focused private equity funds.
Francisco Partners is a technology-focused investment firm. It invests in public and private technology companies at inflection points, where its strategic insight and long-term focus give it a differentiated view of investment value. Francisco Partners provides transformational capital by working in close concert with the management team to reposition, recapitalize, or otherwise rejuvenate companies to support strong long-term value creation.
Adrian Gonzalez, ARC Advisory Group, commented, "This news confirms a rumor that had been circulating for a couple of weeks. As the software landscape continues to consolidate--and the large enterprise players like Oracle, SAP, SSA Global, and Microsoft become more powerful--vendors like RedPrairie are being forced to think defensively and find new sources of capital to accelerate growth. Going public continues to be a challenge for small and midsized software vendors, especially with the added costs and constraints inflicted by Sarbanes-Oxley. Therefore, it's not surprising that RedPrairie and others are going the private equity route--i.e. consolidating ownership under one entity and pursuing a roll-up strategy (a strategy that's easier to pursue as a private entity instead of a public company). The rumor that was floating around also said that a large Transportation Management Systems vendor was also being acquired. It remains to be seen whether this comes true, but additional acquisitions will certainly occur this year. What does this mean to customers? Being acquired by an equity firm is arguably less disruptive than being acquired by another software company. So in the near term, it's business as usual. It remains to be seen what changes Francisco Partners makes down the road from a strategy and acquisitions perspective."
Friday, April 22, 2005
Tuesday, April 19, 2005
Wednesday, April 13, 2005
The Slippery Slope Of Moving R&D Overseas
The most frightening statement in "Outsourcing innovation" (Special Report, Mar. 21) was from Quanta's Barry Lam: "It's now difficult to get good ideas from our customers." This shows what the real threat is. You can't develop new product ideas if you can't integrate intimate knowledge of the market with knowledge of emerging technologies. Companies that pretend these interlocking streams can be separated won't be around for long. The last thing they will outsource is the chief executive and the board.
Daniel E. Whitney
MIT Engineering Systems Div.
Cambridge, Mass.
It is frightening to think that the bean counters' new "target of the day" is the amount Corporate America should spend on R&D. In one tidy, neat statement, Allen J. Delattre of Accenture (ACN ) has relegated research and development to line-item status -- as nothing more than the last great "controllable expense" on the ledger. Delattre's comments are those of a tactician, the same mind-set that stated at the turn of the 20th century that all new important inventions had already been invented or that Einstein was a lazy student who would amount to little.
The continuing success of America's ability to innovate needs to be articulated with a sense of strategic vision by someone who will not ask: How much does "X" save us in making our new widget? Rather he will ask, how will our widget revolutionize the world? Focus on the correct question, and the appropriate savings and profit will follow.
Louis Janicek
Ramsey, N.J.
There is a business term for companies that leave manufacturing and design to others -- they're called retailers. Once the Asian companies get their own brand name and distribution network, they won't be working for us anymore, they'll be working for themselves.
Paul Wetor
Wauwatosa, Wis.
I surely cannot be the only one who has noticed the disconnect between what corporate CEOs are saying and what they are doing. On the one hand, they complain that the U.S. education system does not focus enough on math and science and does not produce enough graduates to fill high-tech engineering jobs. On the other hand, they fire the talented and experienced engineers that helped build their companies so they can outsource those jobs.
Dan Tischendorf
New Cumberland, Pa.
I think you missed a critical distinction: When the dominant design, technology, and features have been established in a category, the important work of gaining sales and share by getting those features and costs right are not the province of the high-value R&D experts or scientists. Rather, this type of work requires good intuitive and interactive work among feature engineers, usability teams, and cost-down teams.
The high-value work of inventing breakthrough science and capabilities still seems to rest with the R&D geniuses who are worth their weight in gold.
Fred Heller
Stamford, Conn.
It is naive to assume that Silicon Valley and the U.S. have a monopoly on creativity and innovation. The argument, cited often in this article, that intimacy with the customer is an edge in this global competition is also naive: It presumes that there are no markets other than the U.S. to which Chinese, Taiwanese, and Indian manufacturers can direct their advanced products.
Outsourcing technology development is a slippery slope. In a number of software companies I am closely familiar with, it began with sending quality-assurance work overseas, then bug-fixing (which requires intimacy with code), and finally the entire product development (since bug-fixers eventually became coders).
Jon Handaru
Palo Alto, Calif.
I have worked at major software companies, including such icons as Sybase Inc. (SY ) and J.D. Edwards, for the past 20-plus years as a software engineer in various capacities. As far as I know, both Sybase and Oracle Corp. (ORCL ) outsourced entire maintenance engineering to India many years ago to compete with each other. Now almost all development has moved to India. I can guarantee that next generations of database engines will start from India, not from the U.S.
No engineer starts developing high-end products from zero. Such people learn their trade from a master -- as with music, carpentry, etc. -- by maintaining their codes for years and in time take it to next level. We are so shortsighted on giving away our crown jewels. Maybe it is the problem with capitalism.
Nick Shener
Alameda, Calif.
There's More Than One Way To Bring Radio To Life
I enjoyed "The new radio revolution" (News: Analysis & Commentary, Mar. 14). The 1996 rewrite of the Telecommunications Act was a near death blow to radio. Radio was already getting pretty boring, but letting four companies own most of the radio stations and automate boredom was criminal. Tuning across the dial, it sounds as if there are only four or five stations, cloned and repeated, playing the same tiny group of songs over and over.
The National Association of Broadcasters thinks that going digital and having CD-quality sound will save them. I think not. Digital boredom will be just as boring as analog boredom.
Stephen Hawkins
Boone, Iowa
You overlooked the one device that will grab share and revenue from current and new broadcasting technologies such as pod-casting and satellite. Although still in its infancy, the streaming of radio programming through a cell phone, known as mobile streaming, combines the best features of all other broadcasting technologies. Users can receive preprogrammed or personalized programming, purchase music they hear, and easily send recommended programming or songs to friends. Most importantly, mobile streaming provides operators with strong, recurring revenue streams. There certainly is a radio revolution taking place, but the battlefield will move to the cell phone.
Gilles Babinet
Chairman and Co-Founder
Musiwave
Paris
Commercial radio is becoming its own worst enemy -- because it is putting profits first and customer satisfaction second. Stupid commentary from deejays, endless commercials, and the like have driven me away. It was only a matter of time until this business model came crashing down. I believe that Internet radio is in a position to become a primary medium. I like my Internet radio station so much that sometimes I have to turn it off in order to focus on my work -- it's that good!
Tom Caine
Mountain Lakes, N.J.
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Monday, April 11, 2005
Saturday, April 09, 2005
Funding Your Software Venture
When my partners and I started ASE Services, Inc. in 1980, there wasn't a lot in the way of Venture Financing available. Instead, we relied on good old fashion bootstrap financing. We didn't know what bootstrapping was at the time - all we knew was that we were starting a business and had no money - so we found clever ways to make it work. First, we started as a services business offering local IBM sales people a way to bring manufacturing resource planning consulting and programming expertise to new prospect situations in order to help IBM "close the deal" against HP and Digital (who were starting to win more deals locally through partnerships with companies such as ASK.)
None of us had any formal sales experience but we did know what we were talking about and knew it better than anyone else in the area. So we started consulting, writing code, installing packages, then selling and supporting packages. We outsourced our work to subcontractors until there was enough load to add them full time and grew our business this way so that during light load times we could turn off the valve. I remember going several months initially without a pay day and using my credit cards for cash advances so that the mortgage was paid and my family ate.
Bottom line was that we did whatever it took to get the business running and to keep it growing and within a year we were all making more than we had ever thought possible. We built a repeatable sales model, hired reps and pre-sales consultants (a crucial role we thought we invented in 1980) and became the largest VAR of SSA's Business Planning and Control System - BPCS(TM) and several years into it had a $20million local business which was acquired by SSA 6 months after their IPO. ASE had more MRP/ERP clients in New England than any other software company including IBM with MAPICS. We had a vision of "owning the market" and achieved it.
We never had any VC money, nor angel funding. We bootstrapped out of cash flow by being totally up front with customers. We earned the right (with our expertise and full service and guaranteed success approach) to ask for payments in advance. By earning a reputation for excellence (won IBM's customer excellence award) and for delivering on our promises, we were able to convince customers we were the best path to success and they were willing to "partner" with us. We delivered more value with less risk and the business grew. We never had to touch the $50k line of credit until it was time to build a building to house our operation. We obtained a "no money down" loan from the state (Mass.) industrial finance authority at 75% of prime for $1mill to build a 15,000 sq ft building which we leased back to ourselves (the lease ran coterminous with the mortgage and when we sold the business the lease went with to provide us with a nice cash flow after the deal.) The mortgage transaction cost us $50k in legal fees - well worth it.
There are many ways to raise money which are outside the now traditional angels and VC channels. Start by looking creatively at savings, friends & family (but understand the implications if you fail), credit cards, home equity loans, bank loans, federal and local government money, SBA, IP licensing to an OEM, line of credit, bank loans, pre-pay or down payment terms, outsourcing with terms that pay when you get paid, partner marketing co-op funds, suppliers, etc.
You need to earn the right to go to Angels, Angel Groups and VC's. You need to show you have the right stuff for today's typically gun shy investors. Most investors have returned to the basics of looking for companies that have a more proven track record for success. Companies with experienced management teams, developed products, large markets, and paying customers (who are willing to stand up and be references) and companies with value proposition proof points. You may ask, why would I need money if I had all that going for my company already? Maybe you don't - you can bootstrap if you have the time. But if time isn't your friend, then you need to think about outside funding.
IPO's are another source of funding. SSA went public at approx. $60mill in revenue and used the money for rapid expansion (100% growth for a few years.) I have been fortunate enough to have benefited from IPO's with SSA, Effective Management Systems, Firepond, PrimeResponse & Eyretel. In each case we loaded up the war chest for growth and it gave us the strength to land major contracts with companies concerned about viability. A very small number of companies actually make it to an IPO and even a smaller amount survive the post IPO expectations. It can also an expensive way to raise money. Now with the SOX Act, it can easily cost $2mill/year to stay public. And valuations "ain't what they used to be", although they are still higher than what you may get from other sources.
Another approach is one we used on my second journey with SSA. I had returned, as Americas president, when the company was stagnated at $350mill. In revenue and was in the midst of a technology transition from AS/400 focused to being on a distributed object computing architecture (that's another story...) This time we used convertible debt to raise $150mill in the second round of financing the company went out for in 1999. SSA had gone the first six years on a boot strap, then grew from '87 thru '98 with nothing more than the IPO raise. Now it was faced with extinction due to the drain of R&D and lack of entrepreneurial spirit in the company (especially in sales and marketing.) So in a addition to the raise we got back to basics in the field. We focused the sales force on verticals and geographies as well as the install base. We removed the marginal players and added "A" level players. We installed CRM tracking infrastructure to manage the sales pipeline and sales process. We cranked up the marketing and focused back on a TEAM selling approach. Within a very short time we were growing again (at 35%/year for the next several years) which helped cash tremendously.
In addition we got the boot straps out again and came up with additional ways to raise cash from customers, royalties, suppliers etc. Pre-paid multi-year maintenance plans, technology change insurance policies, co-op marketing, cross-sell and up-sell campaigns, resale of complimentary products, increased focus on services revenue and consulting....all of these thing helped SSA survive a very challenging time.
SSA was not able, however, to raise enough overcome poor R&D execution. At that time,SSA suffered from an inability to deliver on the technology transition in the time frame that was promised. The result was that the company created it's own chasm to cross and was faced chapter 11 and subsequently acquired, at a bargain price, by investor group who took it out of Ch11 and took it private. Now SSA is growing by investing in acquisition of products and customer bases at good prices and is once again profitable and attractive - demonstrating that regardless of how things are, if you are agile and funded properly you can find a way to turn things around. SSA recently filed for another IPO (or should be called an sIPO - second Initial Public Offering?!)
In any event, the message is to get creative when raising money and treat meetings with potential sources of funds as the sales call of your life time. And, especially if going to angels or VC’s, make sure you are prepared... anticipate their question, stay confident, know their background and funding objectives.... and make sure your “A” team is on their “A” game.
None of us had any formal sales experience but we did know what we were talking about and knew it better than anyone else in the area. So we started consulting, writing code, installing packages, then selling and supporting packages. We outsourced our work to subcontractors until there was enough load to add them full time and grew our business this way so that during light load times we could turn off the valve. I remember going several months initially without a pay day and using my credit cards for cash advances so that the mortgage was paid and my family ate.
Bottom line was that we did whatever it took to get the business running and to keep it growing and within a year we were all making more than we had ever thought possible. We built a repeatable sales model, hired reps and pre-sales consultants (a crucial role we thought we invented in 1980) and became the largest VAR of SSA's Business Planning and Control System - BPCS(TM) and several years into it had a $20million local business which was acquired by SSA 6 months after their IPO. ASE had more MRP/ERP clients in New England than any other software company including IBM with MAPICS. We had a vision of "owning the market" and achieved it.
We never had any VC money, nor angel funding. We bootstrapped out of cash flow by being totally up front with customers. We earned the right (with our expertise and full service and guaranteed success approach) to ask for payments in advance. By earning a reputation for excellence (won IBM's customer excellence award) and for delivering on our promises, we were able to convince customers we were the best path to success and they were willing to "partner" with us. We delivered more value with less risk and the business grew. We never had to touch the $50k line of credit until it was time to build a building to house our operation. We obtained a "no money down" loan from the state (Mass.) industrial finance authority at 75% of prime for $1mill to build a 15,000 sq ft building which we leased back to ourselves (the lease ran coterminous with the mortgage and when we sold the business the lease went with to provide us with a nice cash flow after the deal.) The mortgage transaction cost us $50k in legal fees - well worth it.
There are many ways to raise money which are outside the now traditional angels and VC channels. Start by looking creatively at savings, friends & family (but understand the implications if you fail), credit cards, home equity loans, bank loans, federal and local government money, SBA, IP licensing to an OEM, line of credit, bank loans, pre-pay or down payment terms, outsourcing with terms that pay when you get paid, partner marketing co-op funds, suppliers, etc.
You need to earn the right to go to Angels, Angel Groups and VC's. You need to show you have the right stuff for today's typically gun shy investors. Most investors have returned to the basics of looking for companies that have a more proven track record for success. Companies with experienced management teams, developed products, large markets, and paying customers (who are willing to stand up and be references) and companies with value proposition proof points. You may ask, why would I need money if I had all that going for my company already? Maybe you don't - you can bootstrap if you have the time. But if time isn't your friend, then you need to think about outside funding.
IPO's are another source of funding. SSA went public at approx. $60mill in revenue and used the money for rapid expansion (100% growth for a few years.) I have been fortunate enough to have benefited from IPO's with SSA, Effective Management Systems, Firepond, PrimeResponse & Eyretel. In each case we loaded up the war chest for growth and it gave us the strength to land major contracts with companies concerned about viability. A very small number of companies actually make it to an IPO and even a smaller amount survive the post IPO expectations. It can also an expensive way to raise money. Now with the SOX Act, it can easily cost $2mill/year to stay public. And valuations "ain't what they used to be", although they are still higher than what you may get from other sources.
Another approach is one we used on my second journey with SSA. I had returned, as Americas president, when the company was stagnated at $350mill. In revenue and was in the midst of a technology transition from AS/400 focused to being on a distributed object computing architecture (that's another story...) This time we used convertible debt to raise $150mill in the second round of financing the company went out for in 1999. SSA had gone the first six years on a boot strap, then grew from '87 thru '98 with nothing more than the IPO raise. Now it was faced with extinction due to the drain of R&D and lack of entrepreneurial spirit in the company (especially in sales and marketing.) So in a addition to the raise we got back to basics in the field. We focused the sales force on verticals and geographies as well as the install base. We removed the marginal players and added "A" level players. We installed CRM tracking infrastructure to manage the sales pipeline and sales process. We cranked up the marketing and focused back on a TEAM selling approach. Within a very short time we were growing again (at 35%/year for the next several years) which helped cash tremendously.
In addition we got the boot straps out again and came up with additional ways to raise cash from customers, royalties, suppliers etc. Pre-paid multi-year maintenance plans, technology change insurance policies, co-op marketing, cross-sell and up-sell campaigns, resale of complimentary products, increased focus on services revenue and consulting....all of these thing helped SSA survive a very challenging time.
SSA was not able, however, to raise enough overcome poor R&D execution. At that time,SSA suffered from an inability to deliver on the technology transition in the time frame that was promised. The result was that the company created it's own chasm to cross and was faced chapter 11 and subsequently acquired, at a bargain price, by investor group who took it out of Ch11 and took it private. Now SSA is growing by investing in acquisition of products and customer bases at good prices and is once again profitable and attractive - demonstrating that regardless of how things are, if you are agile and funded properly you can find a way to turn things around. SSA recently filed for another IPO (or should be called an sIPO - second Initial Public Offering?!)
In any event, the message is to get creative when raising money and treat meetings with potential sources of funds as the sales call of your life time. And, especially if going to angels or VC’s, make sure you are prepared... anticipate their question, stay confident, know their background and funding objectives.... and make sure your “A” team is on their “A” game.
Tuesday, April 05, 2005
Knievel's Wild Ride - Terrific Premier Show
Just finished watching Robbie Knievel and Crew's first show. I thought it had alot to offer. Reality, entertainment, fun, excitement and a feel for Robbies lifestyle. Great job guys !
Spring thaw in spending freeze: replace or be replaced.
News Story by Thomas Hoffman APRIL 04, 2005 (COMPUTERWORLD)
- A thaw in the four-year IT spending freeze is becoming more evident as companies are slowly beginning to look at replacing core applications with newer systems that offer improved functionality and scalability, IT managers and analysts said last week.
At the same time, some organizations are using Web services and service-oriented architectures to extend some older applications in addition to installing new ones.
For instance, DTE Energy Co. in Detroit is deploying ERP software from SAP AG to replace five financial systems, two mainframe supply chain management systems and one human resources system, said CIO Lynne Ellyn.
The energy supplier is also replacing two distribution operations systems and nine implementations of a plant work management system with Maximo, an asset and service management system from Bedford, Mass.-based MRO Software Inc., she said.
DTE Energy is simultaneously harnessing Web services to help it develop applications for functions that few, if any, commercial systems can automate, said Ellyn.
Varied Predictions
In a survey of 118 senior financial executives published late last month by Iselin, N.J.-based Siemens Financial Services Inc., 73% of the respondents said they expect to have shorter replacement cycles for software over the next five years.
But Bill Zadrozny, president and CEO of the Siemens AG unit, which offers financing for hardware and software purchases, said he hasn't seen any significant increases in software spending from Siemens' users so far this year.
"We're hearing it from customers, but we're not seeing it yet," Zadrozny said.
Fenella Scott, an analyst at AMR Research Inc. in Boston, said the frequency of software replacement cited in the Siemens survey "seems a little aggressive." She estimated that roughly 5% of AMR's manufacturing industry customers plan to replace their core packaged applications over the next 12 months.
Harrah's Entertainment Inc. is making increased use of middleware from vendors such as Tibco Software Inc. to more closely integrate its existing systems, said Tim Stanley, vice president of IT and CIO at the Las Vegas-based gaming and hotel company.
But Harrah's is also upgrading its core off-the-shelf applications more frequently in order to migrate to newer versions that Stanley hopes will contain fewer bugs "and put us on a more predictable path."
Other CIOs, such as John Schille at American Fidelity Assurance Co. in Oklahoma City, said they aren't planning to increase software replacement over the near term because their applications are working as expected.
Kathy Quirk, an analyst at Nucleus Research Inc. in Wellesley, Mass., said, "What I'm seeing is that a lot of companies are selectively replacing software, depending on the business need." That includes instances where companies are consolidating multiple packages of CRM and other types of software onto a single platform or are upgrading various business users onto the same version of a system, she added.
- A thaw in the four-year IT spending freeze is becoming more evident as companies are slowly beginning to look at replacing core applications with newer systems that offer improved functionality and scalability, IT managers and analysts said last week.
At the same time, some organizations are using Web services and service-oriented architectures to extend some older applications in addition to installing new ones.
For instance, DTE Energy Co. in Detroit is deploying ERP software from SAP AG to replace five financial systems, two mainframe supply chain management systems and one human resources system, said CIO Lynne Ellyn.
The energy supplier is also replacing two distribution operations systems and nine implementations of a plant work management system with Maximo, an asset and service management system from Bedford, Mass.-based MRO Software Inc., she said.
DTE Energy is simultaneously harnessing Web services to help it develop applications for functions that few, if any, commercial systems can automate, said Ellyn.
Varied Predictions
In a survey of 118 senior financial executives published late last month by Iselin, N.J.-based Siemens Financial Services Inc., 73% of the respondents said they expect to have shorter replacement cycles for software over the next five years.
But Bill Zadrozny, president and CEO of the Siemens AG unit, which offers financing for hardware and software purchases, said he hasn't seen any significant increases in software spending from Siemens' users so far this year.
"We're hearing it from customers, but we're not seeing it yet," Zadrozny said.
Fenella Scott, an analyst at AMR Research Inc. in Boston, said the frequency of software replacement cited in the Siemens survey "seems a little aggressive." She estimated that roughly 5% of AMR's manufacturing industry customers plan to replace their core packaged applications over the next 12 months.
Harrah's Entertainment Inc. is making increased use of middleware from vendors such as Tibco Software Inc. to more closely integrate its existing systems, said Tim Stanley, vice president of IT and CIO at the Las Vegas-based gaming and hotel company.
But Harrah's is also upgrading its core off-the-shelf applications more frequently in order to migrate to newer versions that Stanley hopes will contain fewer bugs "and put us on a more predictable path."
Other CIOs, such as John Schille at American Fidelity Assurance Co. in Oklahoma City, said they aren't planning to increase software replacement over the near term because their applications are working as expected.
Kathy Quirk, an analyst at Nucleus Research Inc. in Wellesley, Mass., said, "What I'm seeing is that a lot of companies are selectively replacing software, depending on the business need." That includes instances where companies are consolidating multiple packages of CRM and other types of software onto a single platform or are upgrading various business users onto the same version of a system, she added.
Saturday, April 02, 2005
How are Lifecycles Influencing Your Revenue Growth?
Your organization and its products, markets and buyers that produce one time or ongoing revenue streams each have a lifecycle.
A lifecycle has a beginning (birth) and a end (death). Each lifecycle includes stages of maturity. Maturity stages within lifecycles will impact your revenue balance as it relates to various lifecycles and revenue generation. In order to effectively plan for growth an organization must analyze these lifecycles and map them against their existing organization’s lifecycle and growth plans.
Lifecycles include certain influencing factors. An influencing factor could be something as subjective as analyst coverage or something much more tangible such as a buyer procurement cycle. The objective of this briefing is to expose specific lifecycles and illustrate how your organizations revenue balance and growth could be impacted based upon lifecycle stages and influencing factors.
Product and services organizations are structured and managed differently. Both have unique revenue recognition, utilization, profit and lifecycle nuances to manage. Organizations that fail to find the "right" revenue and profit balance supporting double digit revenue and value growth often find themselves struggling with cyclical cash flow issues that typically inhibit profitable growth. Identifying various lifecycles that impact your organization and creating a strategy to ensure proper revenue balance will be critical to the success of your organization.
Executive teams should consider that revenue and profit projections are dependent upon lifecycle stages and must factor the following lifecycle influencers when creating growth strategies:
The Lifecycle of the Marketplace or Market Segment:
A lifecycle has a beginning (birth) and a end (death). Each lifecycle includes stages of maturity. Maturity stages within lifecycles will impact your revenue balance as it relates to various lifecycles and revenue generation. In order to effectively plan for growth an organization must analyze these lifecycles and map them against their existing organization’s lifecycle and growth plans.
Lifecycles include certain influencing factors. An influencing factor could be something as subjective as analyst coverage or something much more tangible such as a buyer procurement cycle. The objective of this briefing is to expose specific lifecycles and illustrate how your organizations revenue balance and growth could be impacted based upon lifecycle stages and influencing factors.
Product and services organizations are structured and managed differently. Both have unique revenue recognition, utilization, profit and lifecycle nuances to manage. Organizations that fail to find the "right" revenue and profit balance supporting double digit revenue and value growth often find themselves struggling with cyclical cash flow issues that typically inhibit profitable growth. Identifying various lifecycles that impact your organization and creating a strategy to ensure proper revenue balance will be critical to the success of your organization.
Executive teams should consider that revenue and profit projections are dependent upon lifecycle stages and must factor the following lifecycle influencers when creating growth strategies:
The Lifecycle of the Marketplace or Market Segment:
- Immature
- Evolving
- Emerging
- Mature
- Declining
Lifecycle of the organization selling within the segment:
- Start Up
- Early Stage
- High Growth
- Mature
- Declining
Lifecycle of the product or service being sold within the market segment:
- Immature
- Emerging
- Mature
- Commodity
- Declining
Demographic and adopter cycle of buyer within market (based on Geoffrey Moore's Crossing the Chasm):
- Innovator - Leaders
- Early adopter (Visionary) - Winners
- Early majority-MAINSTREAM MARKET POPULATION - Pragmatists - Vertical Buyers
- Late majority - Conservatives
- Laggard - Skeptics - Losers
5 Quick questions to ask yourself on lifecycle preparedness:
- Have you documented and analyzed the various lifecycles within your market segment?
- Have you created growth and financial models for each level of those lifecycles?
- Have you identified what lifecycle stage(s) determines high growth for your firm?
- Have you created processes and disciplines around revenue generation and marketing within your organization to ensure lifecycle awareness and tracking?
- Have you validated your go to market and performed a lifecycle and revenue growth gap analysis to identify inhibitors that might have not shown themselves yet?
Awareness, demand and education is often required to pull prospective clients to your organization but in order to produce effective marketing materials, sales communication and approaches within your go to market you must first understand the lifecycle of your company in relation to the product, market, and buyer.
Mastery of balanced revenue growth and lifecycle alignment is critical within executive levels of any organization. This level of knowledge is not found in educational institutions but through experience in building high performing marketing and revenue generating organizations.
Lack of experience and comprehension of revenue balance and lifecycles has fueled the following statistics:
- Sales and Marketing turn over in the high tech marketplace was over 72% in 2004
- In 2003 63% of Fortune 500 CEOs had been on the job less than 1 year; some organizations estimated that since 1998 nearly two thirds of the worlds companies had replaced their CEOs.
- CFO turn over has spiked between December 1st 2004 to January 31st 2005 up nearly 200% from the same time last year
- Hi Tech CEOs have some of the highest turn over rates
- Debt in businesses with less than 500 employees has grown from $680 Billion to over $1.3 Trillion since 1998
*1.Culpepper 2.Fortune Magazine 3. Drake Beam Morn (DBM) 4. Booz Allen Hamilton 5. SBA
Influencers and inhibitors to revenue and value growth with various lifecycle segments can be identified and addressed through revenue and market place audits and analysis.
For more information on having VentureFuel perform and audit and analysis for you contact me at 401 475 3106 or email Paul Lavallee at VentureFuel.
Thursday, March 31, 2005
Patriots Dynasty/Super Bowl Leadership Lessons
During the past four NFL seasons, Bill Belichick has led the New England Patriots to an amazing three Super Bowl victories and a remarkable overall win-loss record of 57-16. His career postseason coaching record of 10-1 is the best in league history. Yet just 10 years ago, he was fired as coach of the Cleveland Browns and labeled Cleveland’s “worst coach ever” by the press. What lessons does Belichick’s remarkable turnaround offer for us all? (From Michael Felger of the Boston Herald.)
- Develop people skills. True or not, the perception of Belichick in Cleveland was that of a distant, humorless taskmaster. His resurgence is proof that people skills can be honed. The Patriot’s coach still isn’t the most charismatic guy around, but he gets along very well with his boss (team owner Robert Kraft).
- Foster a real TEAM. One of Belichick’s greatest strengths has been his ability to push the team concept. Big-ego players command too much of a team’s budget and often have star-sized attitudes. Belichick targets players whom he feels will fit his system.
- Embrace change. Most teams do whatever they can to hang onto their most recognizable players. Not the Patriots. Of New England’s 22 offensive and defensive starters in the 2002 Super Bowl, only six were still starting for the team in the 2005 Super Bowl.
- Expect the unexpected. While (unavoidable) injuries ruin some teams’ seasons, the Patriots have managed to keep right on winning – because Belichick treats backup players as an integral part of his plan… not as an afterthought.
- Don’t rely on a single strategy. Many football teams strive to have an identity, a single style that they can rely on each week regardless of the situation. Bill Belichick devises a unique game plan each week. That’s why he covets versatility in his players.
- Look for intelligence and character. The intelligence of the Patriot players is a big reason why Belichick can implement his very complicated strategies. Their character is a big part of the reason the team hasn’t been brought down by ego or complacency despite all of its success.
- Follow rules. Belichick has a rule that a player doesn’t start on Sunday if he missed practice time during the week. He believes that if you bend the rules in one situation, you’re likely to do it again and, eventually, the structure suffers. (This includes Richard Seymour, one of the Patriots’ best players, who missed practice to attend his grandfather’s funeral.)
- Focus on what you can control. Belichick doesn’t allow players to moan about the thin air when they play in Denver or the heat when they’re in Miami. There’s nothing they can do to change the conditions, so why waste energy worrying about them?
6 Killer Rainmaker Sales Questions
“How to Become a Rainmaker: The Rules for Getting and Keeping Customers and Clients” by Jeffrey Fox (author of “How to Become a CEO”). It’s a great, easy read. Here are Fox’s six “Killer Sales Questions:”
1. Do you have your Appointment calendar handy? It leads to obtaining an appointment over 90% of the time.
2. Will you look at the facts and decide for yourself if they make sense? This is almost rhetorical because the answer is so seemingly obvious. The customer is certainly going to decide for herself.
3. Ask the prospect what other companies they are considering and follow-up with, Would you be interested in our points of difference? The customer needs to see a difference, new information, so he can change his mind or change the minds of his colleagues.
4. Is there anything else prohibiting you from going ahead? The salesperson is either going to hear some unresolved customer issues, or get an agreement to an action that leads to a close.
5. Why don’t you give it a try? A super saleswoman sold a $1 million computer conversion that took 18 months to implement by asking the customer, “Well, why don’t you give it a try?” People don’t just “try” – they act. They do something.
6. What question should I be asking that I am not asking? “What am I not asking?” is asked by the most confident, most customer-concerned, most professional of professionals. And good customers want to be asked this fantastic leave-no-stone-unturned question.
Passed along from:
Randy Cyr
President
The Damase Group
P.O. Box 1833
Framingham, MA 01701
rcyr@damasegroup.com
508-879-2300 Office
508-740-7181 Cell
1. Do you have your Appointment calendar handy? It leads to obtaining an appointment over 90% of the time.
2. Will you look at the facts and decide for yourself if they make sense? This is almost rhetorical because the answer is so seemingly obvious. The customer is certainly going to decide for herself.
3. Ask the prospect what other companies they are considering and follow-up with, Would you be interested in our points of difference? The customer needs to see a difference, new information, so he can change his mind or change the minds of his colleagues.
4. Is there anything else prohibiting you from going ahead? The salesperson is either going to hear some unresolved customer issues, or get an agreement to an action that leads to a close.
5. Why don’t you give it a try? A super saleswoman sold a $1 million computer conversion that took 18 months to implement by asking the customer, “Well, why don’t you give it a try?” People don’t just “try” – they act. They do something.
6. What question should I be asking that I am not asking? “What am I not asking?” is asked by the most confident, most customer-concerned, most professional of professionals. And good customers want to be asked this fantastic leave-no-stone-unturned question.
Passed along from:
Randy Cyr
President
The Damase Group
P.O. Box 1833
Framingham, MA 01701
rcyr@damasegroup.com
508-879-2300 Office
508-740-7181 Cell
“Cautious optimism. A global survey of CEO’s in the Deloitte Technology Fast 500.”
Here is an overview :
- CEO’s are focusing less attention on cash flow, shifting priorities from customer retention to customer acquisition and stockpiling talent in key positions.
- Although preparing for growth, CEO’s continue to focus on profitability. That’s a big change from the late 1990’s when many business leaders pursued a growth strategy at any price.
- Last year, roughly 30% of respondents cited the economy as the biggest challenge to sustained revenue growth. This year, that number was cut in half – down to less than 15%.
- The top operational challenge this year is developing a strong marketing and sales strategy.
- Roughly 25% of the CEO’s surveyed cited recruiting and retention as their biggest operational challenge, second only to establishing a strong marketing and sales strategy.
There is worldwide agreement that developing and bringing new products to market is the top marketing challenge. In North America, hiring the right salespeople is the second highest priority. - CEO’s in Europe and Asia Pacific are very concerned about competition from China and India. Companies in North America are focused more on terrorism and the general economy.
Thursday, March 24, 2005
Software Company Growth Opportunities - Adapt or Die.
According to the 2005 CEO Outlook study available at www.SandHill.com :
"Executives don’t expect 2005 to be another year of flat performance: 52 percent of those urveyed anticipate modest 5 to 9 percent revenue growth for the overall industry. Another 29 percent’s predictions were for growth of 10 percent or more."
.
Source: Sand Hill Group
Despite the rosy outlook, there is no doubt that significant challenges remain.When asked to name the software industry’s greatest challenge, 35 percent of respondents pointed to stagnant corporate IT budgets. Small companies were most concerned about this continuing dynamic, while larger companies were slightly more likely to indicate “lack of growth.” Other concerns included lack of innovation and increasing consolidation.
“This is as challenging an environment to manage a business through as any I’ve seen in my 25 years in the business. The next two years will likely be ones of moderate growth, but I think it will take three to five years for sustainable business models and practices to return, around which startup, growth, niche and mature companies can be run and evaluated.”
CEO, midsize applications and infrastructure company
“Buyers are still very cautious and very thorough about purchasing. Unless there is a regulatory requirement, they are under no rush to buy.”
CEO, midsize Internet applications company
“We’re expecting a slight improvement over 2004. But we’re still not seeing a tidal wave of buyer momentum.”
CEO, midsize applications company
.
Source: Sand Hill Group
“Software industry executive teams need to grow up and realize that the industry is not a fast-growth industry anymore and software companies need to be managed for profit and cash flow just like other traditional industries. Executives need training and knowledge
transfer on best practices for operational effectiveness in the software industry.”
CEO, midsize applications company
They key: Adapt new business models to the changing world around you - or not - either way you are deciding on a strategy.
"Executives don’t expect 2005 to be another year of flat performance: 52 percent of those urveyed anticipate modest 5 to 9 percent revenue growth for the overall industry. Another 29 percent’s predictions were for growth of 10 percent or more."
.Source: Sand Hill Group
Despite the rosy outlook, there is no doubt that significant challenges remain.When asked to name the software industry’s greatest challenge, 35 percent of respondents pointed to stagnant corporate IT budgets. Small companies were most concerned about this continuing dynamic, while larger companies were slightly more likely to indicate “lack of growth.” Other concerns included lack of innovation and increasing consolidation.
“This is as challenging an environment to manage a business through as any I’ve seen in my 25 years in the business. The next two years will likely be ones of moderate growth, but I think it will take three to five years for sustainable business models and practices to return, around which startup, growth, niche and mature companies can be run and evaluated.”
CEO, midsize applications and infrastructure company
“Buyers are still very cautious and very thorough about purchasing. Unless there is a regulatory requirement, they are under no rush to buy.”
CEO, midsize Internet applications company
“We’re expecting a slight improvement over 2004. But we’re still not seeing a tidal wave of buyer momentum.”
CEO, midsize applications company
.Source: Sand Hill Group
“Software industry executive teams need to grow up and realize that the industry is not a fast-growth industry anymore and software companies need to be managed for profit and cash flow just like other traditional industries. Executives need training and knowledge
transfer on best practices for operational effectiveness in the software industry.”
CEO, midsize applications company
They key: Adapt new business models to the changing world around you - or not - either way you are deciding on a strategy.
Sneak preview of Knievels Wild Ride
KNIEVEL’S WILD RIDE on A&E
Episode One -- “The Jersey Curse” Airs April 5 @ 10PM/9C
The launch to Robbie’s big summer tour is riddled with bad omens. He’s going to New Jersey to jump 25 cop cars in the “Above the Law” jump. Haunted by the memory of a previous crash in New Jersey, he’s decided the place is cursed. His first stop in the long trip from Washington State to New Jersey is in Butte, Montana where he was born and raised. The nostalgic visit turns sour when he goes to a local watering hole and winds up in a barroom brawl that leaves his face and his ego seriously battered. Once he finally reaches New Jersey, he discovers that the jump site itself is not what he expected. There are curbs, light poles, and other objects in his path. The venue has to incur the expense of tearing up the lot in order to give Robbie a clean run at the takeoff. To make matters worse, ramp builder Todd and Crew chief Bill Rundle aren’t getting along, and their lack of communication is creating confusion among the crew.
MEET THE MEMBERS OF TEAM KNIEVEL
Cast Bios:
"Kaptain" Robbie Knievel – Daredevil Motorcycle Jumper
Son of world-renowned Daredevil Evel Knievel, Robbie began his career as a daredevil at the age of eight as a part of his father’s act. By age sixteen he had a falling out with his father, and started up his own act, proceeding to break all of his father’s motorcycle jumping records. He has completed more than 300 jumps and set 25 world records of his own. His most notable jumps include the Grand Fountains at Caesar’s Palace in Las Vegas, a 200-foot-wide, 2,500-foot-deep chasm of the Grand Canyon, a building-to-building leap in Las Vegas, a daring vault over an oncoming train near San Antonio, Texas, and a jump over seven vintage aircraft on the USS Intrepid, a retired aircraft carrier in Manhattan. The one stunt that still looms over Robbie’s head is the famed “Snake River” jump. Evel failed in his attempt to cross the Snake River in a rocket in 1974, and Robbie vows to one day eclipse that by succeeding in crossing the 1800-foot gap. Even though he's paid his dues for the last 34 years and is a significant daredevil in his own right, his relationship with his ailing father continues to be strained due to professional jealousy. Robbie’s biggest challenge and his biggest blessing in life is his last name. Now in his forties, Robbie is single but has two daughters, and one granddaughter. His greatest hope is that he will continue to jump for at least another decade. Robbie grew up in Butte, Mont., and now lives on the Olympic Peninsula in Washington.
Krysten Knievel – Robbie’s youngest daughter
Krysten took the “evel” out of Knievel. Unlike her father and grandfather, she has no desire to attempt life-threatening stunts, and she’s focused primarily on being a good student. This nineteen-year-old “nice girl” from Chicago still lives with her mother, volunteers at the local animal hospital, and earns straight A’s as a freshman in college. She finds that the best way to get quality time with her father is by meeting up with him at jumps. Sometimes she sings the national anthem at his jumps, but even if she doesn’t she still likes to attend the events to give moral support.
Bill Rundle – Team Knievel Crew Chief/ Bike Mechanic
Bill Rundle has known Robbie his entire life. When Robbie was living with his dad in Butte, Montana as a child, Rundle worked on Evel’s crew. Bill is Executive Director of “Knievel Days” in Butte, Montana, which brings tens of thousands of people to Butte each year. He makes his living as a car dealer. Bill is married, and he and wife Davene, son Brett, daughter Brittney and nephew Jon make their home in Butte. Bill started Robbie racing motorcycles back in the days when Bill was Montana State Flat Track Champion. In fact, Robbie worked for him sweeping the floors at a local motorcycle shop.
Bill and Robbie have been buddies since they were kids, and he has worked with Evel and Robbie for over 30 years. He and Robbie consider each other brothers. Also, Robbie is Godfather to Bill’s daughter Brittney. Often called the “Godfather of Butte,” his association with the Knievel name has given him notoriety in his hometown. Robbie puts all of his trust in Bill as his mechanic. Rundle is a straightforward family man who does not drink excessively. He seems like a fairly well adjusted “normal” person, which makes him a bit of an enigma among the other members of Team Knievel.
"Master" Brian Gates – Robbie Knievel’s bodyguard
Master Gates currently holds the rank of 8th Degree Black Belt in the Martial Arts and is a Gold Medalist and Heavyweight Champion in Kickboxing. The Master is always prepared for any level of threat with the tactical weaponry he carries in his arsenal. His prime directive is to protect Robbie
-more-
Knievel from nefarious saboteurs. He is constantly on the lookout for potential threats, and is very much at Robbie’s side all of his waking hours during the week of a jump and throughout his travels. Master Gates is a licensed Constable in the state of Pennsylvania and a Certified Travel Marshall and Law Enforcement Officer. Among the many other celebrities he has protected are Evel Knievel, Chuck Norris, Michael Douglas, Garth Brooks, Gwen Stefani and Phil Collins.
Roman – Team Knievel Roadie
Born is Austria, Roman is a muscle-bound, tattoo-clad, longhaired biker dude! Roman is a licensed Harley Davidson mechanic who rides a road bike that he built himself. He came to the United States in his early twenties, and now, at age 39, is a citizen and registered voter in the State of California. He met Robbie a few years ago at a motorcycle rally in Sturgis, South Dakota, and they quickly became friends. Early on, Roman didn’t really have a defined role on the Team and was mostly there for the “fun factor.” Now, he says, he’s responsible for “everything and nothing,” from building takeoff and landing ramps to fixing vehicles to tending bar. When Roman is not on the road with Team Knievel, he “couch surfs” from one friend’s place to another.
Dan “Zuck” Zucker – Robbie’s Manager
When you see Zucker amongst the other members of Team Knievel you may be inclined to think to yourself "one of these things is not like the other." Zuck is a slender, bespectacled, high-energy Long Island boy with a penchant for nervousness. He is not a motorcycle rider, and has no interest in motorcycles beyond their importance in making Robbie Knievel who he is. As his manager, Zuck's main task is handling the day to day business activities including: booking performances, appearances and endorsements; handling press and PR and keeping Robbie in front of the media; coordinating the crew and Robbie's schedule during event weeks. Zuck met Robbie back in 1995 when he was working as a salesman for a sports radio station in Seattle. He has since teamed up with Robbie and has been a key figure in launching Robbie back into the spotlight. Zuck's constant struggle as Robbie's manager is to get him to be where he needs to be when he needs to be there. He commits Robbie to a lot of press engagements in the days leading up to a jump, and keeping Robbie to task is a constant source of anxiety.
Todd – Team Knievel Ramp Builder/Backup Crew Chief
Todd met Robbie when he jumped at a local casino a decade ago and the rest is history. Todd, who is in his forties, was born in Denver and raised in Sequim, Washington. He is currently single and has one teenage son who also lives in Sequim. Todd’s younger daughter lives with his ex-wife in Arizona. Todd is a framer who “grew up on a construction site.” As such, he is a fully capable builder charged with overseeing the construction of Robbie’s ramps. Todd used to date Darci, Robbie’s live-in housekeeper and bookkeeper – a situation that so far has not caused any problems. Todd often wears his emotions on his sleeve, and often flies off the handle, provoking a lot of riffs between fellow crewmembers. Todd and Robbie share a common bond, a strained relationship with their respective fathers. When he’s not on the road with Robbie, Todd is lead singer and front man for the country & western band Gunner. And, when he’s not working, he’s usually slalom water skiing or riding his Harley on the road.
Rocker Pete – Team Knievel Roadie
Rocker Pete was also born and raised in Sequim Washington, and is a lifelong friend of Todd’s. Pete got close to fame in the 1980s as the lead singer of a head-banger band called Hammerhead. The group achieved some notice in Europe. After getting ousted from the band, Pete struggled to keep his music career running, but he never managed to put it back together. However, recently he completed an album titled “Mainzer Mania,” which he hopes will gain some recognition through his association with Robbie and the new series. On the road with Team Knievel, Pete is the utility guy –
-more-
washing the vehicles, stocking the fridge, and assisting Todd in any tasks that need be dealt with regarding construction.
Jon Simanton – “Weeble Knievel”
Jon Simonton is a little person who is a professional actor living in Los Angeles. He has a four-year-old daughter who is taller than him. In the role of “Weeble, The World’s Smallest Daredevil,” Jon is the wildly popular opening act for Robbie at most of his jumps. The shtick is that he jumps one more of whatever Robbie is jumping... The hitch is that they’re miniature versions! For example, if Robbie jumps 15 tractors, “Weeble” will jump fifteen Tonka toys. Before meeting Robbie 18 months ago, Jon had only ridden dirt bikes for fun. As his confidence and experience grows, his jumps are getting more extravagant – and even more crowd-pleasing.
Dan Haggerty – “The Griz”
Dan Haggerty is best known for his role as Grizzly Adams on the popular television series in the 1980s. “The Griz,” as he is called, is a friend of Robbie’s who likes to appear at a lot of his jumps just to give him support. As “The Griz” would say, he likes to “catch him when he lands.” He also likes to party and party hard when he and Robbie are together.
Spanky Spangler – Stunt Coordinator
Spanky Spangler has performed more stunts than anyone else in the world. Famous for his “high falls” and car stunts, he’s one of the nation’s foremost experts when it comes to setting up a stunt. He is a close friend of Robbie’s and makes it a point to be at all of Robbie’s jumps to help him with analyzing the situation and calculating speeds and other variables. When Robbie was just a teenager, Spanky filmed his first jump for the television series That’s Incredible. Spanky is a Vietnam veteran and ex-Green beret who parlayed his experience in commando operations into a career that boasts 22,000 stunts, three Hall of Fame honors and 22 World Records
Episode One -- “The Jersey Curse” Airs April 5 @ 10PM/9C
The launch to Robbie’s big summer tour is riddled with bad omens. He’s going to New Jersey to jump 25 cop cars in the “Above the Law” jump. Haunted by the memory of a previous crash in New Jersey, he’s decided the place is cursed. His first stop in the long trip from Washington State to New Jersey is in Butte, Montana where he was born and raised. The nostalgic visit turns sour when he goes to a local watering hole and winds up in a barroom brawl that leaves his face and his ego seriously battered. Once he finally reaches New Jersey, he discovers that the jump site itself is not what he expected. There are curbs, light poles, and other objects in his path. The venue has to incur the expense of tearing up the lot in order to give Robbie a clean run at the takeoff. To make matters worse, ramp builder Todd and Crew chief Bill Rundle aren’t getting along, and their lack of communication is creating confusion among the crew.
MEET THE MEMBERS OF TEAM KNIEVEL
Cast Bios:
"Kaptain" Robbie Knievel – Daredevil Motorcycle Jumper
Son of world-renowned Daredevil Evel Knievel, Robbie began his career as a daredevil at the age of eight as a part of his father’s act. By age sixteen he had a falling out with his father, and started up his own act, proceeding to break all of his father’s motorcycle jumping records. He has completed more than 300 jumps and set 25 world records of his own. His most notable jumps include the Grand Fountains at Caesar’s Palace in Las Vegas, a 200-foot-wide, 2,500-foot-deep chasm of the Grand Canyon, a building-to-building leap in Las Vegas, a daring vault over an oncoming train near San Antonio, Texas, and a jump over seven vintage aircraft on the USS Intrepid, a retired aircraft carrier in Manhattan. The one stunt that still looms over Robbie’s head is the famed “Snake River” jump. Evel failed in his attempt to cross the Snake River in a rocket in 1974, and Robbie vows to one day eclipse that by succeeding in crossing the 1800-foot gap. Even though he's paid his dues for the last 34 years and is a significant daredevil in his own right, his relationship with his ailing father continues to be strained due to professional jealousy. Robbie’s biggest challenge and his biggest blessing in life is his last name. Now in his forties, Robbie is single but has two daughters, and one granddaughter. His greatest hope is that he will continue to jump for at least another decade. Robbie grew up in Butte, Mont., and now lives on the Olympic Peninsula in Washington.
Krysten Knievel – Robbie’s youngest daughter
Krysten took the “evel” out of Knievel. Unlike her father and grandfather, she has no desire to attempt life-threatening stunts, and she’s focused primarily on being a good student. This nineteen-year-old “nice girl” from Chicago still lives with her mother, volunteers at the local animal hospital, and earns straight A’s as a freshman in college. She finds that the best way to get quality time with her father is by meeting up with him at jumps. Sometimes she sings the national anthem at his jumps, but even if she doesn’t she still likes to attend the events to give moral support.
Bill Rundle – Team Knievel Crew Chief/ Bike Mechanic
Bill Rundle has known Robbie his entire life. When Robbie was living with his dad in Butte, Montana as a child, Rundle worked on Evel’s crew. Bill is Executive Director of “Knievel Days” in Butte, Montana, which brings tens of thousands of people to Butte each year. He makes his living as a car dealer. Bill is married, and he and wife Davene, son Brett, daughter Brittney and nephew Jon make their home in Butte. Bill started Robbie racing motorcycles back in the days when Bill was Montana State Flat Track Champion. In fact, Robbie worked for him sweeping the floors at a local motorcycle shop.
Bill and Robbie have been buddies since they were kids, and he has worked with Evel and Robbie for over 30 years. He and Robbie consider each other brothers. Also, Robbie is Godfather to Bill’s daughter Brittney. Often called the “Godfather of Butte,” his association with the Knievel name has given him notoriety in his hometown. Robbie puts all of his trust in Bill as his mechanic. Rundle is a straightforward family man who does not drink excessively. He seems like a fairly well adjusted “normal” person, which makes him a bit of an enigma among the other members of Team Knievel.
"Master" Brian Gates – Robbie Knievel’s bodyguard
Master Gates currently holds the rank of 8th Degree Black Belt in the Martial Arts and is a Gold Medalist and Heavyweight Champion in Kickboxing. The Master is always prepared for any level of threat with the tactical weaponry he carries in his arsenal. His prime directive is to protect Robbie
-more-
Knievel from nefarious saboteurs. He is constantly on the lookout for potential threats, and is very much at Robbie’s side all of his waking hours during the week of a jump and throughout his travels. Master Gates is a licensed Constable in the state of Pennsylvania and a Certified Travel Marshall and Law Enforcement Officer. Among the many other celebrities he has protected are Evel Knievel, Chuck Norris, Michael Douglas, Garth Brooks, Gwen Stefani and Phil Collins.
Roman – Team Knievel Roadie
Born is Austria, Roman is a muscle-bound, tattoo-clad, longhaired biker dude! Roman is a licensed Harley Davidson mechanic who rides a road bike that he built himself. He came to the United States in his early twenties, and now, at age 39, is a citizen and registered voter in the State of California. He met Robbie a few years ago at a motorcycle rally in Sturgis, South Dakota, and they quickly became friends. Early on, Roman didn’t really have a defined role on the Team and was mostly there for the “fun factor.” Now, he says, he’s responsible for “everything and nothing,” from building takeoff and landing ramps to fixing vehicles to tending bar. When Roman is not on the road with Team Knievel, he “couch surfs” from one friend’s place to another.
Dan “Zuck” Zucker – Robbie’s Manager
When you see Zucker amongst the other members of Team Knievel you may be inclined to think to yourself "one of these things is not like the other." Zuck is a slender, bespectacled, high-energy Long Island boy with a penchant for nervousness. He is not a motorcycle rider, and has no interest in motorcycles beyond their importance in making Robbie Knievel who he is. As his manager, Zuck's main task is handling the day to day business activities including: booking performances, appearances and endorsements; handling press and PR and keeping Robbie in front of the media; coordinating the crew and Robbie's schedule during event weeks. Zuck met Robbie back in 1995 when he was working as a salesman for a sports radio station in Seattle. He has since teamed up with Robbie and has been a key figure in launching Robbie back into the spotlight. Zuck's constant struggle as Robbie's manager is to get him to be where he needs to be when he needs to be there. He commits Robbie to a lot of press engagements in the days leading up to a jump, and keeping Robbie to task is a constant source of anxiety.
Todd – Team Knievel Ramp Builder/Backup Crew Chief
Todd met Robbie when he jumped at a local casino a decade ago and the rest is history. Todd, who is in his forties, was born in Denver and raised in Sequim, Washington. He is currently single and has one teenage son who also lives in Sequim. Todd’s younger daughter lives with his ex-wife in Arizona. Todd is a framer who “grew up on a construction site.” As such, he is a fully capable builder charged with overseeing the construction of Robbie’s ramps. Todd used to date Darci, Robbie’s live-in housekeeper and bookkeeper – a situation that so far has not caused any problems. Todd often wears his emotions on his sleeve, and often flies off the handle, provoking a lot of riffs between fellow crewmembers. Todd and Robbie share a common bond, a strained relationship with their respective fathers. When he’s not on the road with Robbie, Todd is lead singer and front man for the country & western band Gunner. And, when he’s not working, he’s usually slalom water skiing or riding his Harley on the road.
Rocker Pete – Team Knievel Roadie
Rocker Pete was also born and raised in Sequim Washington, and is a lifelong friend of Todd’s. Pete got close to fame in the 1980s as the lead singer of a head-banger band called Hammerhead. The group achieved some notice in Europe. After getting ousted from the band, Pete struggled to keep his music career running, but he never managed to put it back together. However, recently he completed an album titled “Mainzer Mania,” which he hopes will gain some recognition through his association with Robbie and the new series. On the road with Team Knievel, Pete is the utility guy –
-more-
washing the vehicles, stocking the fridge, and assisting Todd in any tasks that need be dealt with regarding construction.
Jon Simanton – “Weeble Knievel”
Jon Simonton is a little person who is a professional actor living in Los Angeles. He has a four-year-old daughter who is taller than him. In the role of “Weeble, The World’s Smallest Daredevil,” Jon is the wildly popular opening act for Robbie at most of his jumps. The shtick is that he jumps one more of whatever Robbie is jumping... The hitch is that they’re miniature versions! For example, if Robbie jumps 15 tractors, “Weeble” will jump fifteen Tonka toys. Before meeting Robbie 18 months ago, Jon had only ridden dirt bikes for fun. As his confidence and experience grows, his jumps are getting more extravagant – and even more crowd-pleasing.
Dan Haggerty – “The Griz”
Dan Haggerty is best known for his role as Grizzly Adams on the popular television series in the 1980s. “The Griz,” as he is called, is a friend of Robbie’s who likes to appear at a lot of his jumps just to give him support. As “The Griz” would say, he likes to “catch him when he lands.” He also likes to party and party hard when he and Robbie are together.
Spanky Spangler – Stunt Coordinator
Spanky Spangler has performed more stunts than anyone else in the world. Famous for his “high falls” and car stunts, he’s one of the nation’s foremost experts when it comes to setting up a stunt. He is a close friend of Robbie’s and makes it a point to be at all of Robbie’s jumps to help him with analyzing the situation and calculating speeds and other variables. When Robbie was just a teenager, Spanky filmed his first jump for the television series That’s Incredible. Spanky is a Vietnam veteran and ex-Green beret who parlayed his experience in commando operations into a career that boasts 22,000 stunts, three Hall of Fame honors and 22 World Records
Thursday, March 17, 2005
Pricing Models for Grid Application Deployment
Recent press release from the 451 Group:
Current Enterprise Software Licensing Models; Are a Major Obstacle to Increased Grid Application Deployment
NEW YORK--(BUSINESS WIRE)----
Evolving enterprise requirements and experimental, alternative purchase models will have a cumulative and disruptive impact on software licensing policies and practices; the results will extend beyond grid computing and affect licensing for all enterprise software. The 451 Group believes current enterprise software licensing models are throttling grid computing deployments and that these models, which have been built around legacy concepts of enterprise application use, are presenting an increasing problem for enterprise IT managers as they pursue implementations of grid applications. Enterprise IT departments are finding that they can't afford to buy software licenses for every processor or device in a grid for each application they intend to run on that grid - a necessity, under current licensing schemes. Grids, by their nature, consume resources dynamically, and this is a concept that is not well addressed in the majority of software user licenses. This reality is skewing the potential return on investment (ROI) from grid computing programs - posing a formidable obstacle to grid application deployment. These findings are contained in a report - released today by New York-based The 451 Group, a technology industry analyst company focused on the business of enterprise IT innovation - which analyzes the role of enterprise software licensing models in early commercial adoption of grid computing technologies. 451 analysts have found that some enterprises have managed to avoid these software licensing challenges through tactics such as: -- Using in-house-developed applications, often based on open source software -- Negotiating customized deals with vendors -- Paying a premium for one or two critical applications As the volume of grid deployments increase, demands for enhanced license models will increase, as well as demands for instrumentation and management to support new license models. Conventional license management models and pricing structures are problematic and extremely expensive for users seeking to run commercial applications on grids; thus enterprise IT departments will require more flexibility in the way software is bought and used. The 451 Group also believes emerging, alternative purchase models - just coming to the marketplace - suggest a change is underway that will have a cumulative and disruptive impact on vendor licensing policies and practices. Software licensing for grids must be seen within the context of other dynamics: the ability to proactively manage the use of software licenses based on business objectives and in dynamic, virtual environments is not a grid-only issue. Grids are an important inflection point in this transformation, but the issue is a broader one for enterprise IT. "The most that early adopters can hope for is an evolution of license models to achieve software licensing based on business objectives that balance customer needs and vendor business models," said William Fellows, Principal Analyst for The 451 Group and lead author of the report. "The challenge will be to offset the potential vendor loss of revenue on one side with greater value/lower cost and more flexibility on the other side. Customers will need to consider licensing issues when they make purchasing decisions, while the vendors will need to provide an abstract resource model that accommodates applications being run on virtual resources as in the case of grid computing." The report, 'Grid Computing - The Impact of Software Licensing,' is the fourth report in the 451 Grid Adoption Research Service (GARS), an investigation into user experiences and vendor strategies. The 77-page report was written by William Fellows, Principal Analyst with The 451 Group, together with Steve Wallage, Director of Research, and Martin Schneider, Analyst, Enterprise Software. The report includes user case studies, plus detailed comparisons of user experiences and views on various licensing issues. The report also analyzes the strategies and positioning of more than 20 vendors, from grid computing companies to license management, in electronic design automation (EDA); business intelligence (BI); extract, transform, load (ETL) software and other major software areas. Key Companies Covered The report includes in-depth competitive assessments of the following vendor companies (although this is not a complete list of companies covered in various sections of the report): Data Synapse, Hewlett-Packard, IBM, Platform Computing, Runtime Design Automation, United Devices, Cadence Design Systems, Macrovision, ManageSoft, Synopsys, Business Objects, Fair Isaac, Informatica, SAS, Computer Associates, Chordiant Software, Citrix Systems, EDS, Engineous Software, Novell and Searchspace. User case studies include the following early adopter companies: ABN AMRO, ARM, Acxiom, Boeing, Freescale Semiconductor, Intel, Micron Technology, Novartis and T-Systems. Report Orders To learn more about this report, or to discuss developing a client relationship with The 451 Group, contact Simon Carruthers, Vice President of Research Services, via phone at 212-505-3030 x-103 or via e-mail at: simon.carruthers@the451group.com. About The 451 Grid Adoption Research Service (GARS) The 451 Grid Adoption Research Service (GARS) - an investigation into user experiences and vendor strategies - extends The 451 Group's proven expertise in analyzing the grid technology market. This service analyzes the track record as commercial enterprise users introduce grid technologies to their core IT operations, and it examines the effectiveness of the strategies of vendor companies whose technologies early adopters are deploying. It is an extension of The 451 Group's analytical program on grid computing, which provides an assessment of customer demand, looking at the opportunities and challenges facing early adopters and covering adoption within key industries. It also presents the unique opportunities and challenges in specific vertical market segments. About The 451 Group The 451 Group is a technology industry analyst company focused on the business of enterprise IT innovation. The company's analysts provide critical and timely emerging-technology insight to clients at vendor, investor, services and end-user organizations - insight that aids both strategic and tactical decision making for competitive advantage. The 451 Group is headquartered in New York, with offices in key locations, including San Francisco, London and Boston. For additional information on the company or to apply for trial access to its services, go to: www.the451group.comThe 451 Group / Boston Kim Kent, 617-548-3602 kim.kent@the451group.com03/17/2005 09:01 ET
Current Enterprise Software Licensing Models; Are a Major Obstacle to Increased Grid Application Deployment
NEW YORK--(BUSINESS WIRE)----
Evolving enterprise requirements and experimental, alternative purchase models will have a cumulative and disruptive impact on software licensing policies and practices; the results will extend beyond grid computing and affect licensing for all enterprise software. The 451 Group believes current enterprise software licensing models are throttling grid computing deployments and that these models, which have been built around legacy concepts of enterprise application use, are presenting an increasing problem for enterprise IT managers as they pursue implementations of grid applications. Enterprise IT departments are finding that they can't afford to buy software licenses for every processor or device in a grid for each application they intend to run on that grid - a necessity, under current licensing schemes. Grids, by their nature, consume resources dynamically, and this is a concept that is not well addressed in the majority of software user licenses. This reality is skewing the potential return on investment (ROI) from grid computing programs - posing a formidable obstacle to grid application deployment. These findings are contained in a report - released today by New York-based The 451 Group, a technology industry analyst company focused on the business of enterprise IT innovation - which analyzes the role of enterprise software licensing models in early commercial adoption of grid computing technologies. 451 analysts have found that some enterprises have managed to avoid these software licensing challenges through tactics such as: -- Using in-house-developed applications, often based on open source software -- Negotiating customized deals with vendors -- Paying a premium for one or two critical applications As the volume of grid deployments increase, demands for enhanced license models will increase, as well as demands for instrumentation and management to support new license models. Conventional license management models and pricing structures are problematic and extremely expensive for users seeking to run commercial applications on grids; thus enterprise IT departments will require more flexibility in the way software is bought and used. The 451 Group also believes emerging, alternative purchase models - just coming to the marketplace - suggest a change is underway that will have a cumulative and disruptive impact on vendor licensing policies and practices. Software licensing for grids must be seen within the context of other dynamics: the ability to proactively manage the use of software licenses based on business objectives and in dynamic, virtual environments is not a grid-only issue. Grids are an important inflection point in this transformation, but the issue is a broader one for enterprise IT. "The most that early adopters can hope for is an evolution of license models to achieve software licensing based on business objectives that balance customer needs and vendor business models," said William Fellows, Principal Analyst for The 451 Group and lead author of the report. "The challenge will be to offset the potential vendor loss of revenue on one side with greater value/lower cost and more flexibility on the other side. Customers will need to consider licensing issues when they make purchasing decisions, while the vendors will need to provide an abstract resource model that accommodates applications being run on virtual resources as in the case of grid computing." The report, 'Grid Computing - The Impact of Software Licensing,' is the fourth report in the 451 Grid Adoption Research Service (GARS), an investigation into user experiences and vendor strategies. The 77-page report was written by William Fellows, Principal Analyst with The 451 Group, together with Steve Wallage, Director of Research, and Martin Schneider, Analyst, Enterprise Software. The report includes user case studies, plus detailed comparisons of user experiences and views on various licensing issues. The report also analyzes the strategies and positioning of more than 20 vendors, from grid computing companies to license management, in electronic design automation (EDA); business intelligence (BI); extract, transform, load (ETL) software and other major software areas. Key Companies Covered The report includes in-depth competitive assessments of the following vendor companies (although this is not a complete list of companies covered in various sections of the report): Data Synapse, Hewlett-Packard, IBM, Platform Computing, Runtime Design Automation, United Devices, Cadence Design Systems, Macrovision, ManageSoft, Synopsys, Business Objects, Fair Isaac, Informatica, SAS, Computer Associates, Chordiant Software, Citrix Systems, EDS, Engineous Software, Novell and Searchspace. User case studies include the following early adopter companies: ABN AMRO, ARM, Acxiom, Boeing, Freescale Semiconductor, Intel, Micron Technology, Novartis and T-Systems. Report Orders To learn more about this report, or to discuss developing a client relationship with The 451 Group, contact Simon Carruthers, Vice President of Research Services, via phone at 212-505-3030 x-103 or via e-mail at: simon.carruthers@the451group.com. About The 451 Grid Adoption Research Service (GARS) The 451 Grid Adoption Research Service (GARS) - an investigation into user experiences and vendor strategies - extends The 451 Group's proven expertise in analyzing the grid technology market. This service analyzes the track record as commercial enterprise users introduce grid technologies to their core IT operations, and it examines the effectiveness of the strategies of vendor companies whose technologies early adopters are deploying. It is an extension of The 451 Group's analytical program on grid computing, which provides an assessment of customer demand, looking at the opportunities and challenges facing early adopters and covering adoption within key industries. It also presents the unique opportunities and challenges in specific vertical market segments. About The 451 Group The 451 Group is a technology industry analyst company focused on the business of enterprise IT innovation. The company's analysts provide critical and timely emerging-technology insight to clients at vendor, investor, services and end-user organizations - insight that aids both strategic and tactical decision making for competitive advantage. The 451 Group is headquartered in New York, with offices in key locations, including San Francisco, London and Boston. For additional information on the company or to apply for trial access to its services, go to: www.the451group.comThe 451 Group / Boston Kim Kent, 617-548-3602 kim.kent@the451group.com03/17/2005 09:01 ET
Consolidation plays- the good, the bad and the ugly.
I have seen it all in my 30 years in the application software business. My first software business, ASE Services, was acquired by SSA as part of consolidating an affiliate/var network. The strategy was good and, post acquisition, I participated in acquiring others.But, the actual companies consolidated were mixed in results. Some thrived post acquisition (ASE doubled in two years), some faded into the wood work and were had to measure, and worst were the ones whose people left to form new companies doing what they did prior to being acquired. The devil is in the details, the people, the culture, the communication with customers and the management of the process of integration and leverage.
I participated in the roll up of companies to extend capabilities and solution footprint and in those cases, with good due diligence on technology fit, market fit, and strategy fit, these usually worked well.
The software junk heap plays for the sake of buying install base and cutting overlapping costs, where there is a consolidation similar and disparate products, usually work from a financial strategy perspective but often leave customers in the lurch due to cuts in R&D and a total dilution of resources and focus.
Companies consolidated up to gain perceived capabilities, (ie the recent acquisition by one public company of another private consolidation play for its RFID capability), can backfire completely. The private company itself recently acquired a small company who had extremely rudimentary RFID capability (according to a colleague I spoke with this week who was part of developing that RFID capability and is now with a leading RFID solution provider) and it appears that, if the public did more due dill., they would have found that out and spent a lot less. Instead they may now be faced with either spending much more now one either development of RFID or yet another acquisition - or be faced with very disappointed customers.
Some companies have been built with a financial strategy based on consolidating capabilities right from the get go. Take a look at Siebel. Started with a financial strategy, and a vision of "all customer touch points" and basically no solutions. They quickly acquired just about all the capabilities to fill out that vision, then cleaned it all up and grew like crazy. They were criticized by competitors who felt they had more elegant solutions, but look at who won the space during their reign.
Timing and where you are relative to others are also a factors. I was involved in the consolidation of PrimeResponse with Chordiant - which worked well to add capabilities - and to add complimentary geographic coverage - unfortunately it was timed at the bursting of the bubble so the value in market cap was not achieved long term. Executives, from PrimeResponse, had parachutes upon an event and made out pretty well. Not so sure about the others. Eyretel and Witness was another consolidation for similar reasons - the strategy was pretty successful for a few of the key stakeholders but the majority of option holders of Eyretel pretty much lost out completely. I have personally been pretty fortunate and made fairly sizable capital gains from nearly every transaction I have been involved with. It has brought a personal freedom that many people rarely achieve. In some cases it was also good for the rest of the staff, customers and investors etc. and in some cases it was not. (So where you sit in the arena, and when you make your move, makes a huge difference too.)
One thing consolidation often is not - is a panacea for all involved.
I participated in the roll up of companies to extend capabilities and solution footprint and in those cases, with good due diligence on technology fit, market fit, and strategy fit, these usually worked well.
The software junk heap plays for the sake of buying install base and cutting overlapping costs, where there is a consolidation similar and disparate products, usually work from a financial strategy perspective but often leave customers in the lurch due to cuts in R&D and a total dilution of resources and focus.
Companies consolidated up to gain perceived capabilities, (ie the recent acquisition by one public company of another private consolidation play for its RFID capability), can backfire completely. The private company itself recently acquired a small company who had extremely rudimentary RFID capability (according to a colleague I spoke with this week who was part of developing that RFID capability and is now with a leading RFID solution provider) and it appears that, if the public did more due dill., they would have found that out and spent a lot less. Instead they may now be faced with either spending much more now one either development of RFID or yet another acquisition - or be faced with very disappointed customers.
Some companies have been built with a financial strategy based on consolidating capabilities right from the get go. Take a look at Siebel. Started with a financial strategy, and a vision of "all customer touch points" and basically no solutions. They quickly acquired just about all the capabilities to fill out that vision, then cleaned it all up and grew like crazy. They were criticized by competitors who felt they had more elegant solutions, but look at who won the space during their reign.
Timing and where you are relative to others are also a factors. I was involved in the consolidation of PrimeResponse with Chordiant - which worked well to add capabilities - and to add complimentary geographic coverage - unfortunately it was timed at the bursting of the bubble so the value in market cap was not achieved long term. Executives, from PrimeResponse, had parachutes upon an event and made out pretty well. Not so sure about the others. Eyretel and Witness was another consolidation for similar reasons - the strategy was pretty successful for a few of the key stakeholders but the majority of option holders of Eyretel pretty much lost out completely. I have personally been pretty fortunate and made fairly sizable capital gains from nearly every transaction I have been involved with. It has brought a personal freedom that many people rarely achieve. In some cases it was also good for the rest of the staff, customers and investors etc. and in some cases it was not. (So where you sit in the arena, and when you make your move, makes a huge difference too.)
One thing consolidation often is not - is a panacea for all involved.
Tuesday, March 15, 2005
Knievel's Wild Ride journey is, in many ways, like ones we have taken.
On my last day of Daytona Bike Week 05 this year, I parked my new Big Inch Bikes - Saturday Night Special chopper at the Stock Exchange, was having dinner with a friend, and happened to run into Robbie Knievel (who, of course, has taken over, with his own unique style, from where his dad, Evel Knievel left off) "Americas Greatest Daredevil".
He was having dinner with his "crew" and we got a few minutes to chat afterwords. He told me about his upcoming A&E TV series premiering Tuesday April 5th at 10pm est on A&E called Knievel's Wild Ride ("Theirs is the road less traveled - a real-life and limb series...") and how in the first episode they are outnumbered in a bar fight ( a reality show I can't wait to see.) Most of the people shown on this website were there.
He also told me about the very radical and powerful new chopper he just built (which he was riding in Daytona) and how he was starting a chopper line of his own. Really cool guy.....very down to earth for the amount of time he spends leaping in the air.
His story reminds me so much of my own wild ride in the software business and the wild rides many of my friends, associates and clients have taken. Ours has also been the road less traveled and resulted in probably as many spills and thrills. It also reminded me that you constantly have to leverage what you have and reinvent yourself when the time calls for it.
But all of that, my friends, is what makes it worth doing.
Live free, ride hard !
He was having dinner with his "crew" and we got a few minutes to chat afterwords. He told me about his upcoming A&E TV series premiering Tuesday April 5th at 10pm est on A&E called Knievel's Wild Ride ("Theirs is the road less traveled - a real-life and limb series...") and how in the first episode they are outnumbered in a bar fight ( a reality show I can't wait to see.) Most of the people shown on this website were there.
He also told me about the very radical and powerful new chopper he just built (which he was riding in Daytona) and how he was starting a chopper line of his own. Really cool guy.....very down to earth for the amount of time he spends leaping in the air.
His story reminds me so much of my own wild ride in the software business and the wild rides many of my friends, associates and clients have taken. Ours has also been the road less traveled and resulted in probably as many spills and thrills. It also reminded me that you constantly have to leverage what you have and reinvent yourself when the time calls for it.
But all of that, my friends, is what makes it worth doing.
Live free, ride hard !
Monday, March 07, 2005
Hi ho ... hi ho....another IPO (for SSA)
SSA Global on last Tuesday said it plans to offer 14.3 million shares at $13-$15 each in a bid to raise up to $215 million in its initial public offering. The Chicago-based maker of Internet-based software for strategic planning, forecasting and budgeting and transactions plans to trade on the Nasdaq under the ticker "SSAG."
But as I say to my kids "This isn't your father's SSA." In fact it barely resembles SSA of old except for the fact that BPCS is part of the porfolio of products being offered by SSAG. I remember the good old days when SSA first went public in the mid 80's....because 6 months later Roger Covey (SSA's CEO and primary founder) came to Boston's Logan Airport to buy my first company (ASE Services.) We were the largest and most successful SSA affiliate. Those were the days of boot-strap financing (no VC's to start either SSA or ASE although Roger did take $1.25 mill. from TA Associates primarily for BOD expertise to help get the IPO off). Those were also the days of 100% revenue growth - with positive cash flow and profits. What a concept! But we did it. And many ventures today could learn a few lessons from those days.
No knock on SSAG - nice job of consolidating bargain basement ventures, who couldn't sustain themselves, into this financial play. Good luck with the IPO. Hope you do at least as well as we did. But somehow it doesn't feel like it is as fun as it was when we built this once laser focused software solution company "in the old days."
But as I say to my kids "This isn't your father's SSA." In fact it barely resembles SSA of old except for the fact that BPCS is part of the porfolio of products being offered by SSAG. I remember the good old days when SSA first went public in the mid 80's....because 6 months later Roger Covey (SSA's CEO and primary founder) came to Boston's Logan Airport to buy my first company (ASE Services.) We were the largest and most successful SSA affiliate. Those were the days of boot-strap financing (no VC's to start either SSA or ASE although Roger did take $1.25 mill. from TA Associates primarily for BOD expertise to help get the IPO off). Those were also the days of 100% revenue growth - with positive cash flow and profits. What a concept! But we did it. And many ventures today could learn a few lessons from those days.
No knock on SSAG - nice job of consolidating bargain basement ventures, who couldn't sustain themselves, into this financial play. Good luck with the IPO. Hope you do at least as well as we did. But somehow it doesn't feel like it is as fun as it was when we built this once laser focused software solution company "in the old days."
ChannelWave acquired by Click Commerce
I met with ChannelWave's former CEO Chris Heidleberger last week at Starbucks to catch up on what each other is up to. I worked with Chris and ChannelWave a few years ago. You meet alot of people in this business and Chris is a terrific person and a friend in addition to being the type of CEO who does whatever it takes.
Enjoy the skiing Chris before you jump into the next venture !
Click Commerce, Inc., a provider of collaborative extranet solutions, acquired substantially all of the operating assets of ChannelWave’s channel management and service automation solutions businesses, for $5.3 million.
Enjoy the skiing Chris before you jump into the next venture !
Click Commerce, Inc., a provider of collaborative extranet solutions, acquired substantially all of the operating assets of ChannelWave’s channel management and service automation solutions businesses, for $5.3 million.
Tuesday, March 01, 2005
Lead clearly and prepare as if for WAR !
One definition of WAR I like is from Dick Marcinko's "Leadership Secrets of the Rogue Warrior" - it is We Are Ready.
I totally agree with Dick when he says it is easy is to make things complex, to be obtuse, to be vague about your company so nobody bothers to challenge you. As in war, business has no place for egotism, infighting, complacency or fear. Although some may say these things are human nature - when faced with a kill or be killed situation - well trained commandos instinctively rise above human nature in order to survive - they don't even think about their weaknesses, they focus on their strengths and on saving their butts. You need to approach your goals with confidence and simplicity - to let the troops know where you stand - no hiding behind walls of obscurity. As the sticker on my Harley helmet says "lead, follow or get out of the way!" Lead from the front.
We in the software industry have faced some of the most difficult issues we have ever faced over the last several years. And there are more challenges ahead…. but you need to make one thing clear to your TEAM if you are going to succeed. You need to convince them that you are not just "committed" to winning in some abstract sense ---- but that you have the will to succeed and therefore you will indeed win.... Then you need to combine that with the right strategy and the execution competence to succeed!
You need to let people know what you stand for as a company - it is not a time to survey and react to what's popular - it's time to get on with your Vision, mission and goals. Factions in the market will challenge your stand - but if you find yourself drawing fire… create, innovate, improvise, make sure you have created an advantage, change the game, move the goal post, get proactive and raise your head and fire back with a vengeance.
Preparation ( competitive analysis, sales training and reviews, executive verification meetings, pre-call scenario roll playing, product training, demo prep. with the prospective client, "stress" testing your people before throwing them to the lions, pre-proposal reviews, legal and accounting reviews, selection team polling, approval process verification, objection preemption, etc......... ) is an absolutely vital element of leadership (quotes such as "the more you sweat in training, the less you bleed in combat"..... and the Nietzsche quote paraphrased: "that which does not kill me, makes me stronger" get the point across.) The real thing should be easier than the drill if the drilling is done right.
Find people who are "compulsively self-reliant",( people who have backups to the backup plan), to go into battle with. Those who don't know better, might call these people insecure or neurotic but I call them prepared professionals. When you are prepared, you not only control the present, you learn to be agile and to adapt to the future. Let's face it though, it is not normal to like preparation and training... but it is necessary for success. Your people are not the companies greatest asset... your prepared people who achieve results are the companies greatest asset. They know that Murhpy lurks behind every corner – and that the only defense is to stay on your toes and to be ready for anything.
I totally agree with Dick when he says it is easy is to make things complex, to be obtuse, to be vague about your company so nobody bothers to challenge you. As in war, business has no place for egotism, infighting, complacency or fear. Although some may say these things are human nature - when faced with a kill or be killed situation - well trained commandos instinctively rise above human nature in order to survive - they don't even think about their weaknesses, they focus on their strengths and on saving their butts. You need to approach your goals with confidence and simplicity - to let the troops know where you stand - no hiding behind walls of obscurity. As the sticker on my Harley helmet says "lead, follow or get out of the way!" Lead from the front.
We in the software industry have faced some of the most difficult issues we have ever faced over the last several years. And there are more challenges ahead…. but you need to make one thing clear to your TEAM if you are going to succeed. You need to convince them that you are not just "committed" to winning in some abstract sense ---- but that you have the will to succeed and therefore you will indeed win.... Then you need to combine that with the right strategy and the execution competence to succeed!
You need to let people know what you stand for as a company - it is not a time to survey and react to what's popular - it's time to get on with your Vision, mission and goals. Factions in the market will challenge your stand - but if you find yourself drawing fire… create, innovate, improvise, make sure you have created an advantage, change the game, move the goal post, get proactive and raise your head and fire back with a vengeance.
Preparation ( competitive analysis, sales training and reviews, executive verification meetings, pre-call scenario roll playing, product training, demo prep. with the prospective client, "stress" testing your people before throwing them to the lions, pre-proposal reviews, legal and accounting reviews, selection team polling, approval process verification, objection preemption, etc......... ) is an absolutely vital element of leadership (quotes such as "the more you sweat in training, the less you bleed in combat"..... and the Nietzsche quote paraphrased: "that which does not kill me, makes me stronger" get the point across.) The real thing should be easier than the drill if the drilling is done right.
Find people who are "compulsively self-reliant",( people who have backups to the backup plan), to go into battle with. Those who don't know better, might call these people insecure or neurotic but I call them prepared professionals. When you are prepared, you not only control the present, you learn to be agile and to adapt to the future. Let's face it though, it is not normal to like preparation and training... but it is necessary for success. Your people are not the companies greatest asset... your prepared people who achieve results are the companies greatest asset. They know that Murhpy lurks behind every corner – and that the only defense is to stay on your toes and to be ready for anything.
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