Post on 06-May-2015
transcript
Copyright 2009 The FactPoint Group
May 4, 2009
Prepared for SIIA Software Summit
San Francisco
Tim Clark, Partner349 First St., Suite ALos Altos, CA 94022www.factpoint.com
+1-650-233-1748
Inside the Buyer’s HeadInside the Buyer’s Head
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FactPoint Background
Help clients identify and address early adopter market opportunities. Founded in 1992.
Acquired by Jupiter Research in March 2000; spun-out in July 2001.
Custom research, not reports.
Methodology: In-depth phone interviews with target customers.
Reference accounts: Adobe, Oracle, NEC America, SonicWALL, SugarCRM, Groundwork Open Source, KACE, UnivaUD, Socialtext, Unisfair, rPath, Palamida.
Project types: Identify new opportunities Accelerate sales Segment markets Strategic market entry Competitive positioning
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Agenda: Inside the Buyer’s Head
IntroductionsDoom and gloom Six things NOT in the Buyer’s Head10 Thoughts Inside the Buyer’s HeadLessons on Selling in a Recession Q&A
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Audience background
On-premise On-demand/SaaS Hardware applianceVirtual applianceOpen source Multiple modes Other
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What’s inside the buyer’s head?
“They’re
DISORIENTED”--William Soward, CEO, Adaptive Planning, March 2009
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Survey OverviewSurvey Overview
Performance and Planning Poll is conducted quarterly– Current poll -- February 2009
– Prior poll -- October 2008
Managed by Adaptive Planning and the BPM Forum
Gathers input on key economic indicators
Solicits feedback on planning processes
Participants are financial professionals from companies of all sizes in over 20 industries
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It’s Bad, and Will Get Worse Before It Gets BetterIt’s Bad, and Will Get Worse Before It Gets Better
A total of 86% say conditions are worse now than they were 6 months ago
Current ConditionsCurrent ConditionsCurrent ConditionsCurrent Conditions
How would you describe the current economic conditions in your industry vs. 6 months ago?
Much Better
Better
Much Worse
12%
29%
Same
Worse 57%
2%
0%
For enterprise companies (>$500M), a full 73% expect worse conditions
Significant deterioration vs. last quarter, when just 27% expected worse conditions in 6 months
Future ExpectationsFuture ExpectationsFuture ExpectationsFuture Expectations
Compared to today, how do you expect conditions in your industry will be in 6 months?
Much Better
Better
Much Worse
42%
3%
Same
Worse 40%
15%
0%
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Companies’ Performance Will SufferCompanies’ Performance Will Suffer
High Degree of High Degree of UncertaintyUncertainty
High Degree of High Degree of UncertaintyUncertainty
How would you characterize the current level of economic uncertainty facing your business?
Low
Medium
High
Very High
5%
33%
39%
23%
For enterprise respondents (>$500M), a full 72% report “high” or “very high” uncertainty
More Challenges AheadMore Challenges AheadMore Challenges AheadMore Challenges Ahead
What do you expect for your company in 6 months versus now?
51% expect lower revenues (vs. 43% last quarter)
48% expect decreased capital spending (vs. 44%)
52% expect decreases in headcount (vs. 43%)
61% expect erosion of profit margins (vs. 46%)
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Goldman Sachs sees global IT spending down 9%
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Six things NOT in the Buyer’s Head
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“I want to add a new software vendor today.”
Memo to ISVs 1: Offer multiple modules of functionality.
Memo to ISVs 2: Add value to existing applications. In an M&A environment, some ISVs will be dropped.
ORACLE!!
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“I hope it takes at least six months to get new software into production.”
Memo to ISV 1: Shorten time to value—avoid long implementations.
Memo to ISV 2: Improve specific business processes that cause customer pain.
Memo to ISV 3: Prove your concept—quickly. QuickStart packages lower risk (and costs) for your customer and you.
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“I want another information silo with my application data.”
Memo to ISVs: Buyers want to integrate new software with what they already own.
Example: Integration is a challenge for SaaS providers.
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“Show me a pretty UI. Skip the financial stuff.”
Top 5 Global PharmaceuticalTotal: Summary of Savings One-year hardware purchases avoided: $ 201,656 Annual ancillary costs to run hardware $ 806,624 First-year software licenses savings $ 280,000 Software maintenance (after year 1) $ 42,000 Annual time saved processing results$ 42,000 Annual FDA compliance savings $ 2,055 Annual quality improvements/savings$ 2,433,050
__________ First-year savings $ 3,765,385 Annual savings[1] $ 3,325,729
[1] After the first year, annual savings drop because the savings on “hardware purchases avoided” is a one-time savings of $201,656 and because software licenses ($280,000) are a one-time expense, replaced after year 1 by software maintenance fees of 15% of original licensing.
© 2006 GroundWork Open Source, Inc.GROUNDWORK Overview 1515
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“We want to fill out your entire software suite.”
“We already have several components of your enterprise software and we want the rest.”
Memo to ISVs: Focus on specific needs. Buyers want software to solve a problem.
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“We’re planning to hire a dozen PhDs to help us come up with a new algorithm for managing our supply chain.”
Memo to ISVs: Buyers are looking to leverage proven “best practices” in their industry. They want expertise built into the software to avoid developing that expertise on their own.
Example: ITM Software (acquired by BMC 2008)
Requirements for a Vendor Management Solution “Institutionalize leading practices with a business
process solution.”
(http://factpoint.com/Vendor-Management-for-Banks.pdf)
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10 Thoughts Inside the Buyer’s Head
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Money woes
Our non-personnel budget got killed
Layoffs alwayshit IT first
Getting capital spending approved is tough.
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Greater demands
Business requires us to enable new revenue sources
With fewer people to do the work, we’re trying to automate business processes.
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Virtualize more?
…but it saves money.
We’ve virtualized servers, but I’m not ready to virtualize mission-critical applications…
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Make it simple, social
Make my life simpler,not more complex.
Yes, we support social networking, but nobody has figured out how to make it strategic.
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I want a lifeAt the end of the day, I just want to tuck my kids in bed.
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Lessons on selling in a recession
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Play the budget angles
Operating expense vs. Capital expense SaaS vs. On-premise Offer/arrange long-term financing for on-
premise software.
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Sprinkle a little Green on it Web meetings: Adobe,
Cisco Webex, GoToMeeting Power management
software: Cassatt Automated systems
management: KACE Digitize paper processes:
SpringCM on Accounts Payable
Telework: Secure remote access and workflow—SonicWALL, Adobe
How telecommuting pleases workers… More flexibility Less stress Work-life balance Control of time Lower commute costs More time at home
…and employers too Lower absenteeism Higher productivity Better job satisfaction Higher retention rates Lower training costs Easier recruitment SonicWALL, 2008
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Open source’s appeal: It’s not only about cost
For customers, access to code eases integration issues.
Some see code access as an insurance policy against an ISV going out of business.
For ISVs, leveraging community-based support can limit costs.
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Choices: Sell software any way the buyer wants it On-premise On-demand/SaaS Hosted by third party Hardware appliance Virtual appliance Open source software
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Don’t sell what the software does. Sell what the software enables your customers to do.
Example: Quantivo, Market Basket Analysis
What Quantivo software does for: Buyers and merchandisersRetail marketers: Advertising, marketing and
promotionsRetail store operations: Where to locate new stores
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Have a story on Cloud Computing
Buzzword
Enterprise computing’sfuture
A chance for hardware vendors to sell new equipment
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Inside the Buyer’s Head
ThanksThanks
Tim Clark, Partnertclark@factpoint.com
+1 650-233-1748