Archive for July, 2009

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News Analysis: NetSuite Acquires QuickArrow To Expand PBS Presence

Published on July 25, 2009 by R "Ray" Wang

On July 21st, 2009, NetSuite announced its intention to acquire Project Based Solutions (PBS) rival Quick Arrow for $20M.   A few quick facts about the acquisition

  • Existing customers will continue to be supported. NetSuite has committed to supporting the QuickArrow solution.  Customers have the option to move to NetSuite and OpenAir.  NetSuite will not force customers to migrate from Apache.  NetSuite will maintain QuickArrow’s Austin, TX based offices and staff.
    POV: QuickArrow customers should explore the opportunity to align their ERP with NetSuite to take advantage of future synergies and integration points.  Standalone QuickArrow customers should wait for the combined future product road map before evaluating any options.   Expect NetSuite to keep its promise as it would make no sense to acquire a company and not retain the customer base.  NetSuite’s acquisition mitigates financial viability concerns with QuickArrow.
  • Acquisition signals commitment to services industry business. As with the $26M OpenAir acquisition, the addition of QuickArrow will extend NetSuite’s support of professional services verticals such as business and IT consulting, legal, accounting, and government contracting.  NetSuite’s services resource planning (SRP) capabilities include investments in key processes such as marketing, sales, quotes/orders, projects, services delivery, charges, invoices, and revenue and finances.
    POV: QuickArrow adds another 35,000 users bringing the estimated total number of subscribers to about 80,000.  This significant market presence in North America gives NetSuite the opportunity to create not only economies of scale in product development, but also additional capabilities such as international expansion, third party project tool integration, and regulatory compliance support.

The bottom line – NetSuite signals its intent to go on the offense for the services industry business

Project based solutions delivered in SaaS provide rapid benefits and allow vendors such as NetSuite to go on the offensive into the install bases of larger competitors such as SAP and Oracle.  Case in point, NetSuite’s two acquisitions in the PBS space removes key competitors and provides it with 1000 customers in a growing market centered around project based businesses.  QuickArrow brings key customers such as Symantec, Genesys, Thomson Reuters, Informatica, and SalesForce.com.   Given NetSuite’s track record, one may expect the ERP SaaS leader to continue to make acquisitions to round out its capabilities in Project Based Solutions.  Expect other SaaS competitors and on-premise giants to follow suit as this market heats up and SaaS becomes a preferred delivery option.

Your POV

Are you a QuickArrow or former OpenAir customer and want to share your experiences?  Do you want to learn more about the PBS market?  Interested in speaking at a future conference or event?  Please post or send your POV to rwang0 at gmail dot com or r at softwareinsider dot org.

Copyright © 2009 R Wang. All rights reserved.

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Wednesday’s Whispers: July 2009 – People Whispers

Published on July 22, 2009 by R "Ray" Wang

PEOPLE WHISPERS: MOVES, PROMOTIONS, AND MILESTONES*

Congratulations to all!  Few movements in July reflect the slow pace of summer vacation.  As always, thanks for your emails and alerts.  If you’ve got a change or know of a promotion, keep dropping me a line!  If you need a referral, don’t hesitate to reach out to me via Linked In.

Bill Ahmed has been promoted in July to Consultant from Associate Consultant at Forrester Research.  Bill has taken on progressive roles during his 4 year tenure.

Brian Benedict became Sales Director at Mindshare Technologies in January 2009.  Prior experiences include work at InfoCurrent as a Business Development lead.

Anindya Chaudhuri became Practice Director – Platform HRO Solutions at Tata Consultancy Services in April 2009.  He previously served as a Business Development Manager, HRO.  Anindya has been wtih Tata Consultancy Services over 10 years.

Melanie Dunn is now a Contract Recruiter at Salesforce.com.  Prior to work at SalesForce.com, Melanie served contract recruiting positions with Workday and IAC and also served as a Senior Recruiter for Siebel and PeopleSoft

Joel Jeselsohn was promoted from Director of Finance to VP Finance & Operations at ClickSoftware, Inc. in May 2009.  Joel brings over a decade of financials experience in the high tech world.

Todd Kiker PMP, MBA became PMO at Leap Wireless in May 2009.  Kiker previously served as the Director of Professional Services Western US at Tectura and has had other roles including: Sr Technical Project Manager at DHAP Digital, System Architect at EDS, and IT Manager at Advanced Information Resources.

Robert Michon became Co-founder and VP Technology at Taïga Infrastructure Services.  His 28 years of IT experience includes roles as a Consultant at R3D Information & Technolog, VP of IT Services at Taleo, and VP of Oracle Solutions Centre at DMR Consulting

Rebecca Morris became Consultant at InfoReliance in March 2009.  She previously applied her PMO experience to work at Constellation Energy as a Director/Project Manager

Milind Padalkar became SVP and Head Oracle Universe at HCL Technologies in February 2009.  He had served for 5 years as the Senior Vice President & Head – Enterprise Applications at Patni Computer.

Chris Silva was promoted from Analyst to Senior Analyst for Enterprise Infrastrcuture at Forrester Research.  His coverage areas include telecom infrastructure and mobility.

Brett Wallace left Forrester after serving various sales roles over the past 7 years.  Brett has taken over the role as Vice President of Sales at Zoom Information.

Your POV

Got a scoop or something to share? Please post or send on to rwang0 at gmail dot com and we’ll keep your anonymity.

* Not responsible for any factual errors or omissions.  However, happy to correct any errors upon email receipt.

Copyright © 2009 R Wang. All rights reserved.


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Tuesday’s Tip: 3 Approaches To Return Shelfware

Published on July 21, 2009 by R "Ray" Wang

Declining demand and diminishing output increase the pressure for enterprises to reduce their software license maintenance costs.  As part of a larger enterprise apps strategy, shelfware reduction provides an area for significant cost savings.   However, shelfware reduction is often hard to achieve because many vendors impose:

  • Enterprise wide agreements. These “all you can eat” agreements incentivize customers to buy more than they need at a “good” discount.  Yet, the end result is the payment of maintenance on non deployed apps (a.k.a. shelfware”).
  • Repricing clauses. Many contracts contain language that impose list price recalculations when users choose to return their licenses to the vendor.
  • Bundled contracts. Contractual language often prevents clients from unbundling their software as needed.  In addition, vendors have initiated focused programs to bundle licenses.

The bottom line – apply three shelfware maintenance fee reduction techniques

Craft a win-win strategy based on your product adoption requirements and overall contract negotiations strategy.  Three proven techniques in order of improving win-win  shelfware reduction scenarios:

  • Return unused licenses. Vendors agree to take back licenses and proportionately reduce maintenance costs.  Customers lose future rights to those licenses.
  • Park unused licenses. Vendors agree to hold unsued licenses and not charge maintenance.  Customers still have rights to the licenses and will pay for maintenance when licenses are deployed
  • Apply credit to purchase of new licenses. Vendors agree to assign a value to shelfware.  Credit on used licenses will be applied to future purchses.  Customers lose rights to the original software but gain rights to new software and functionality.

Your POV.

Having issues with returning shelf ware?  Which approach have you tried?  Ready to share with us your experiences to date?  If you need help with your SAP, Oracle, Infor, Lawson, Microsoft Dynamics, or other enterprise software contract, send me a private mail and we can assist with a contract negotiations strategy that aligns with your apps adoption strategy.   You can post here or send me a private email to rwang0 at gmail dot com.

Copyright © 2009 R Wang. All rights reserved.

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Research Summary: An Enterprise Software Licensee’s Bill of Rights, V2

Published on July 14, 2009 by R "Ray" Wang

FORWARD AND COMMENTARY
“An Enterprise Software Licensee’s Bill of Rights (LB0R) V2″ brings the 10th installment of an on-going series to provide clients with insight on how to better align their packaged apps strategies.  Version 2 of the LBoR updates the original groundbreaking list of 36 best practices for software licensing and pricing and provides a good check list for contract negotiations strategy.  Eleven new rights have been added that reflect support for new deployment options, cost savings beyond the current recession, mitgation from future lock-in, and client best practices.

Other documents as part of the ongoing series on packaged apps strategy include:

  1. Why You Need A Long-Term Apps Strategy
  2. Forrester’s Long-Term Packaged Applications Strategy Framework
  3. Does Your Apps Strategy Support Your Corporate Business Drivers?
  4. Packaged Apps Strategies Take A Back Seat At Most Enterprises
  5. The ROI Of Packaged Apps Instance Consolidation
  6. Five Steps To Building A Recession Proof Packaged Apps Strategy
  7. Shape Your Apps Strategy To Reflect New SaaS Licensing And Pricing Trends
  8. Third Party Apps Maintenance Rebounds
  9. Craft Your Negotiations Strategy To Reflect New Packaged Apps Licensing And Pricing Trends
  10. An Enterprise Software Licensee’s Bill of Rights, V2

RESEARCH HIGHLIGHTS

A. Introduction

Since publication in December 2006, the LBoR has played a key tool in enterprise software contract negotiations and packaged apps strategy for over 1000 of my software licensing, pricing, and contract negotiations at Forrester.  During the update of the LBoR, over 100 end users and 70 vendors contributed to the addition of 11 new rights.   This document remains a must read for all those engaged in software contracts.

B. Research Findings

Changing market conditions result in new rights

Four themes emerged among the 11 additional rights added (see Figure 1):

  • Support for new deployment options. Virtualization and SaaS transcend interesting pilots and concepts and become the norm in mainstream adoption. Users will expect to achieve savings in virtualized instances, the ability to swap user and usage rights among new deployment options, and protection from SaaS vendor bankruptcies.
  • Cost savings beyond the current recession. Renewed focus on cost reduction drive enterprises to identify short- and long-term opportunities. These roles expect choice, value, and predictability in their vendor’s support and maintenance programs.
  • Mitigation from future vendor lock-in in a less competitive environment. Consolidation results in less competition. Users should seek leverage in contract negotiations beyond the initial purchase.
  • Additional client input into best practices. More than 70 software vendors and 100 Forrester clients and Software Insider blog readers provided similar suggestions for improvements in the selection and implementation phases of the software ownership life cycle.

Figure 1. Eleven New Rights Reflect Changing Market Conditions and Client Input

11 New Rights in the LBoR V2

Figure 2. An Enterprise Software Licensee’s Bill of Rights, V2

An Enterprise Software Licensee's Bill of Rights, V2

Recommendations – Use the bill of rights as the centerpiece in contract negotiations

Now’s the time to review existing relationships and renegotiate contracts using the LB0R V2 as a reference guide.  Apply seven simple steps to successfully negotiate enterprise software contracts and build a long-term packaged apps strategy:

  1. Assemble the right team.
  2. Identify the key business drivers.
  3. Apply the software ownership life cycle and the licensee’s bill of rights.
  4. Determine the product adoption plan.
  5. Align product adoption strategy with contract negotiation objectives.
  6. Identify main leverage points.
  7. Finalize the negotiation strategy.

C. Report Links

To read the details about each end-user right, seven simple steps, recommendations and the “What It Means” cycle, click here for the Forrester Report: An Enterprise Software Licensee’s Bill of Rights, V2 . For media courtesy requests, please send me an email to rwang@forrester.com

Read other POV on the Enterprise Software Licensee’s Bill of Rights

Your POV.

Would love your feedback on the report.  Looking for help with your SAP, Oracle, Infor, Lawson, Microsoft Dynamics, or other enterprise software contract?   You can post here or send me a private email to rwang0 at gmail dot com.

Copyright © 2009 R Wang. All rights reserved.

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Monday’s Musings: Why On-Premise Vendors and SI’s Should Go on the Offense with SaaS

Published on July 13, 2009 by R "Ray" Wang

On-premise vendors still see SaaS as a loss leader due to huge ramp up and punishing revenue recognition rules

When it comes to the topic of SaaS, many on-premise vendors appear to be living in denial, hoping that SaaS fails, and/or creating confusion in the market place.  These tactics have merit as a shift to SaaS requires plenty of work with minimal return and a destruction – disruption of the current business model.  In conversations with 61 vendors and building off of SaaS evangelist Jeffrey Kaplan’s post (July 2, 2009, Seeking Alpha – “From the Vendor’s Point of View: Why SaaS Sucks”), vendors who have made this transition or have started the investment put in heavy lifting in these activities must:

  • Re-architect apps
  • Find balance between configuration and optimization of SaaS platform
  • Design product road map and rollout strategy
  • Determine SLA’s
  • Identify a hosting strategy
  • Craft pricing and licensing policies
  • Harmonize SaaS pricing with On-premise and other models
  • Create go to market strategy
  • Alleviate channel conflict with partners, resellers, distributors

After all this work to be ready for SaaS deployments, vendors also discover that FASB SOP 97-2 software revenue recognition rules prohibit them from immediately recognizing multi-year contracts. Even worse, subscription revenue can only be recognized on a month-to-month basis – leading to a long road to profitability.  In fact, vendors such as Lawson, estimated a 7 to 10 year break even period for a full SaaS model.  No wonder Harry Debes was fired up on how SaaS could be a fad in his interview with Victoria Ho at ZD Net last year.  In private, most software executives also echo such sentiments and wholeheartedly agree with his comments about the business model challenges.

Yet, SaaS adoption moves beyond the Tipping Point in 2009

However, the confluence of recessionary forces, stalled innovation from many on-premise software vendors, and success of early SaaS pioneers such as SalesForce.com and NetSuite has put Software-as-a-Service into the mainstream.  Vendors can no longer resist the move to SaaS without negatively impacting their license sales and customer mind share.   Additional facts highlight the shift:

  • Forrester State of Enterprise Software 2009 survey results confirm significant adoption rates from 2008 to 2009. Of 1000 IT executives and decision-makers, 24% were interested/considering, 11% implemented or planning to expand, and 5% piloting SaaS solutions (see Figure 1).
  • Clients continue to vote with their budgets despite marketing FUD by many on-premise vendors on the perils of SaaS. Success Factors‘ win at Siemens for 420,000 employees, Workday‘s win at Flextronics for 240,000 employees, and Ultimate Software’s win at P.F. Chiang’s for 30,000 employees reinforces how SaaS is more than CRM and SMB.
  • Concerns over SaaS have dropped significantly over the past year. Successful deployments mitigate concerns and highlight the attitudinal shift towards acceptance.  Major decreases include integration issues (43%), total cost (31%), lack of customization (31%), complicated pricing models (30%), performance (23%), can’t find the specific application (20%), security (17%), and lock in with existing vendor (17%) (see Figure 2).

Figure 1: Users expect to increase SaaS adoption in 2009

saas-deployment-2009

Source: Forrester

Figure 2.  Concerns over SaaS have dropped significantly over the past year

2009 Enteprise and SMB Survey - SaaS Concerns Declinet

Source: Forrester

Defensive SaaS strategies by vendors miss the opportunity to take market share.

As customer’s continue to demand SaaS solutions for rapid deployment, pay-as-you-go pricing models, and timely innovation, traditional on-premise vendors without a SaaS offering must now explain, defend, or develop their own SaaS story.  Concerns about the impact of SaaS have many vendors in defensive mode.  Defensive strategies have included:

  • Creating counter marketing about SaaS and the viability of the market
  • Responding with hosting options and financing options
  • Building SaaS options for a limited set of popular SaaS solutions such as sales force automation (29%), strategic HCM (29%), and customer service and support (27%) (See Figure 3.)

At first glance, mega vendors such as SAP and Oracle have started with the first two points and are evolving to the third.  They aim to counter the success of Ariba, SalesForce.com, Success Factors, Taleo, Workday, and Ultimate Software with their own offerings.  SAP’s OnDemand for LE release and John Wookey’s ComputerWorld UK interview by Mike Simons, confirms that the strategy will include “CRM on-demand and e-sourcing, with expense management set for a 2010 release.”  Wookey’s approach appears to first shore up areas where SAP customers have been defecting and then worrying about what’s next (see Note 1).  Meanwhile, discussions with Oracle product teams also hint that a release of 5 to 9 SaaS offerings to complement Oracle Siebel CRM OnDemand offerings could be announced soon.  This defensive strategy shores up competitive SaaS solutions such as incentive comp, procurement, and strategic HCM.

Figure 3.  Rate of adoption of key SaaS solutions show significant interest in CRM and other areas

2009 Enterprise and SMB Survey SaaS Interest Areas

Source: Forrester

The bottom line -SaaS gives software vendors and system integrators an opportunity to take market share.

Instead of playing defense, vendors should look at the opportunity to take market share through SaaS.  SaaS vendors and their investors have realized they can target any install base and win by providing compelling functionality.  Why shouldn’t on-premise vendors bite the bullet and go on the offense?  To make this work software vendors would want to take advantage of their partner ecosystems and customers to extend capabilities beyond what’s being delivered in on-premise.  Vendors must make an initial investment in a SaaS/PaaS platform, agile development methodologies, and integration technologies to support hybrid deployment options.  From there, white spaces in the product road map will provide direction into the future opportunities such as vertical and other pivot points that have not been well served.  SAP’s acquisition of Clear Standards for carbon compliance, NetSuite’s acquisition of OpenAir for project based solutions, and Intuit’s acquistion of Entellium for CRM highlights examples of going on the offensive with SaaS.  Of equal importance, system integrators can shift the balance of power and deliver new IP via SaaS solutions while reducing their dependency on the mega vendors.

Recommendations: 7 best practices for crafting a SaaS strategy at an on-premise vendor

Imagine you could start from scratch and build a new software company.  That’s the question I posed to 61 software executives this year.  Most stated they would start with a SaaS deployment option for the scale and the business model.  Now what to do if you are an on-premise vendor?  Answer – build a separate SaaS software division within an on-premise software company.  This could be the next trend among the on-premise vendors for both investment and revenue recognition reasons.  What would be a good strategy:

  1. Reuse similar business process parts as the on-premise product
  2. Harmonize the data model and common objects
  3. Build a brand new RIA based UI and UX
  4. Assume that all data sources will be heterogenous
  5. Design the product to run stand alone
  6. Attack white spaces of new growth in a competitor’s install base
  7. Keep a PaaS platform in mind to attract partners and customers to extend the solution

Your POV.

Totally turned off by SaaS? In the midst of a SaaS strategy? Ready to embark on a SaaS strategy?  If you need assistance, don’t hesitate to reach out?  Please post your point of view here or send me a private email to rwang0 at gmail dot com.

Note 1: The large enterprise (LE) SaaS platform will not come from NetWeaver or SAP’s SME Business by Design (ByD) technology, but come from the acquired Frictionless platform.  While this may leave some SAP customers concerned, Wookey and product super stars Kevin Nix and Peter Lim (of Siebel fame) counter by highlighting where SAP components will be reused and highlighting the home base integration advantage.

As also seen in the July 14th, 2009 SandHill.com”Moving to a SaaS Offensive”

Copyright © 2009 R Wang. All rights reserved.

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Tuesday’s Tip: Do Not Bundle Your Support and Maintenance Contracts!

Published on July 7, 2009 by R "Ray" Wang

In the past 2 weeks, emails from 31 software insider readers highlight a growing and concerning trend with support and maintenance contracts.  Vendors concerns about support and maintenance contract retentions has led to new initiatives to consolidate contracts.  At first glance, this may appear to be proactive and beneficial to customers.  In fact, common rationale provided by the vendor sales reps seem benevolent:

  • Reduce the time and headaches of managing multiple contracts
  • Update existing contract provisions
  • Identify areas of non-compliance.

Keep in mind sales reps have been trained to push these new programs.

The bottom line – users should keep their guards up when vendor sales reps suggest bundling

While the above rationale make sense, bundling often create an all or nothing situation.  Basically, it eliminates your options to go with another vendor throughout the 5 phases of the software ownership life cycle (i.e. selection, implementation, utilization, maintenance, and retirement).  Convenience of one contract will be offset by 3 scenarios why you should never bundle your support and maintenance contracts:

  • Lump sum payment. Moving to one support and maintenance contract often means that the annual fees will be paid all at once.  If push comes to shove, customers can mitigate this by asking for partial payments or more regular payment plans.
  • Third party maintenance. Customers seeking to move off of their vendor delivered support and maintenance will find themselves unable to segment out specific products and solutions.  Individual contracts by products preserve the option to cancel as needed.  In very rare cases, customers have carved out the maintenance for significantly older releases
  • Replacement strategies. Leaving contracts separate allows for easy replacement of applications.  This strategy makes most sense when customers have become a vendor’s customers by acquisition.  Leaving contracts separate enables the option to switch solutions, move to a SaaS option, or create more leverage in deals with the vendor.

Be aware of these new efforts to suggest consolidation of contracts.  There are very few benefits.  Should this be suggested to you, do not hesitate to reach out for advice on strategies to mitigate risk!

Your POV.

In the Enterprise Software Licensee Bill of Rights V2, new rights address this issue.   But for now, have you experienced such vendor tactics?  Did you manage to segment out your contracts?  Do you need assistance with your apps strategy and contract negotiations strategy?  Please post here or send me a private email to rwang0 at gmail dot com.

Copyright © 2009 R Wang. All rights reserved.

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Monday’s Musings: Industry Vertical Pivot Points Still Matter Most

Published on July 6, 2009 by R "Ray" Wang

Pivot points represent a market segmentation approach used by many companies to determine market demand, define new products, assign sales territories, service customers, and put boundaries around customer sets.  Since September 2009, over 500 enterprise software decision makers were asked which one pivot point would they prefer their software vendor focus on.  The four key pivot points include market segment, geography, industry, and role.  To elaborate:

  • Market segment – standard definitions of size whether it be by revenue (e.g. $0-249M, $250-499M, $500-999M, $1,000-4,999M, $5,000-9,999M, $10,000-19,999M, >$20,000M)  or by employee count (e.g. 0-49, 50-99, 100-249, 250-499, 500-999, 1000-2499, 2500-4999, 5000-9999, 10,000-19,999, 20,000-49,999, >50,000).
  • Geography – physical and cultural location of where primarily business is conducted (e.g. North America, South America, Latin America, Western Europe, Eastern Europe, CIS, Middle East, North Africa, Africa, India, Greater China, APAC, Oceania, ANZA, etc.)
  • Industry – industry expertise or vertically related business functions often generated by SIC code or broad categories (e.g. Discrete Manufacturing, Process Manufacturing, Retail/Wholesale Distribution, Services, Public Sector, Healthcare/Life Sciences)
  • Role – classification by job functions and titles (e.g. CEO, COO, CFO, CMO, VP of HR, VP of Security, Architect, Chief Legal Officer, etc.)

Respondents were forced to choose the one pivot point they felt would be most relevant to their needs.  The results are as follows:

Pivot Point Preferences

(Survey of 527 enterprise and sme/smb software decision makers from phone, tweets, email, and in-person interactions from September 2008 to June 2009

The bottom line – end users should demand vertical expertise

The message resonates loud and clear – users seek more vertical expertise from vendors.  Making minor extensions to support an industry may not be enough in today’s market.  As industry requirements increase and require software solutions to provide support, end users must demand greater levels of innovation and investment into vertical specific requirements.  Given how much money has been spent on maintenance and support, end users should take an active role in building the right level of dialogue with vendors:

  • Request to join customer advisory boards. Often customer advisory board members have insight into the product direction and future functionality decisions.  Some vendors such as SAP, Oracle, Lawson, and Microsoft hold regular advisory board meetings with end users, senior management, product teams, and analysts to define, prioritize, and test requirements.  These meetings often result in a status report on priortiziation and progress in delivering the requested functionality.
  • Influence existing user groups. User groups may already provide industry specific forums where the vendor and the end users have existing channels of dialogue.  Determine how quickly it has taken a vendor to deliver on promised functionality.  If it’s been more than 12 months and its a common request among 80% of the users, then it’s time to rally the end users for some change/
  • Rally around industry trade groups. Take the time to see what standards have been set by industry trade groups.  As vendors modernize their software architectures to support web services and SOA, trade groups could provide a key opportunity and forum to define common business process, architecture, and meta data standards.

The bottom line – vendors should keep focusing on verticals and micro-verticals

By a 3 to 1 margin, software decision makers resonate most with verticals.  This continues a trend where customers seek deeper functionality by verticals and micro-verticals in their solutions.  Vendors should take the following 5 actions to improve vertical relevance:

  • Focus on a select number of verticals based on vendor size. Most software vendors under $500M have the bandwidth to focus on 3 to 5 verticals while those between $500M and $1B can handle 7 to 9 verticals.  Agree on what you will not be focused on and treat other sales as opportunistic.
  • Build a road map of capabilities that should be part of the vertical solution. Identify the complete functionality of business processes that should be supported.  Include both internally built and externally provided solutions.
  • Identify solution centric ecosystem ownership. Given the myriad of combinations and customer requirements to deliver the last-mile solutions, not one single software vendor can deliver all aspects of a solution.  Determine what part of the value chain will be delivered, externally sourced, or provided by a partner.  Keep in mind some customers may choose to extend on your platform as well.
  • Enable easy access and extension of the core platform. Design the solution with partnership and extension in mind.  Ecosystems provide the fastest way to build adoption of your software. As users and partners add IP and innovation to the core product, vendors gain natural barriers of entry and exit in a specific vertical and micro-vertical.  Customers may also seek to band together to build solutions or have a partner extend and industry solution for them.
  • Tie the pivot points together. One final point – don’t make the mistake of just focusing on a vertical or one pivot point.  Take the time to cross segment by the other pivot points.  Vendors often find that these verticals may not fit as neatly across the board and that’s okay.  Some solutions such as risk and compliance may have inherent appeal across a role such as a CFO and span verticals.  Keep in mind pivot points provide a guide but use common sense when building natural segments.

Related research of interest

May 7th, 2007 “Solutions-Centric Ecosystems Disrupt The Enterprise Software World Order”

August 22, 2007 “Avoiding Failure In Technology Partnerships”

September 3, 2008 “How To Select A Software Partner Solution Offering“

Your POV.

Got a similar view on pivot points?  Disagree on this assessment? As an end user which pivot point matters most to you and has your vendor delivered?  As a vendor, have you started to focus more on industry verticals? Identify yourself as a vendor, end user, media professional, etc.  To learn more about how to build your solution centric ecosystem, design a partner program, or extend your industry vertical strategy, feel free to reach out.  Post here or send me a private email to rwang0 at gmail dot com.

Copyright © 2009 R Wang. All rights reserved.

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