Posts Tagged ‘vendor financing’

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Order iressa online cheap, Purchasing in Q3 reflected both economic downturn and summer doldrums.  While on-premise vendors continued massive double digit declines in year-over-year new license revenue, SaaS vendors faced some pressures in keeping up with tremendous growth.  However, long term economic outlook still favor SaaS players and early indications on Q4 budget flush indicate that SaaS and Cloud are top of mind.  Major themes in the 2009 Calendar Year Q3 include:


  • On the SaaS front, Salesforce.com (19.55%) continues to lead the pack followed by Blackboard (18.44%) and Concur at (12.94%) (see Figure 1).  While SaaS vendors still experienced growth, Concur (12.94%), Ultimate Software (9.76%), and Taleo (8.77%), NetSuite (3.22%) experienced drops in rate of growth.  Taleo and NetSuite faced the biggest drops in Q3.

  • Tracked publicly traded SaaS vendors represented $756.2M in Q3 software revenues.

  • On-premise vendors showing gains in EPS despite revenue drops (see Figure 2).

  • Specialty on-premise vendors JDA Software (-2.63%) and IFS (-5.07%) reversed license growth and lost year-over-year quarterly gains.

  • Lawson Software reversed a license free fall showing growth in Q3 (22.77%). Ordering cytoxan pill, Healthcare and HCM continued to bolster its license growth and come back.

  • Maintenance revenues continue to float losses in license revenue for on-premise vendors.  Growth in maintenance continues to slow.


Figure 1. SaaS Vendors Face Q3 Headwinds And Growth Slows Vs Q2

2009 Q3 Calendar Year SaaS Revenues

[caption id="attachment_3742" align="alignnone" width="789" caption="2009 Q3 Calendar Year SaaS Revenues - Copyright © 2009 R Wang and Insider Associates, Florida FL Fla., Order cytoxan online, LLC. All rights reserved."]screen-shot-2010-03-18-at-95239-pm
[/caption]

2009 Q2 Calendar Year SaaS Revenues


[caption id="attachment_3743" align="alignnone" width="798" caption="2009 Q2 Calendar Year SaaS Revenues - Copyright © 2009 R Wang and Insider Associates, iressa farmacia a buon mercato, Zometa no prescription, LLC. All rights reserved."]screen-shot-2010-03-18-at-95444-pm
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Figure 2.  On-premise Vendors Face Continued Market Brutality

[caption id="attachment_3746" align="alignnone" width="934" caption="2009 Q3 Calendar Year On-Premise Revenues - Copyright © 2009 R Wang and Insider Associates, lowest price gleevec, Kansas KS Kans., LLC. All rights reserved."]2009 Q3 Calendar Year On-Premise Revenues - Copyright © 2009 R Wang and Insider Associates, LLC, <b>order iressa online cheap</b>. All rights reserved.[/caption]


The Bottom Line For Users - Expect Continued Discounts in Q4

A poor Q3 will bring good news to buyers in Q4 as vendors will continue to heavily discount licenses and professional services while delivering more value to retain maintenance margins.  Conversations with 41 CIO's indicate that a Q4 budget flush is in the works.  The conditions favor end users as poor economic conditions, Missouri MO Mo., Washington WA Wash., realization by vendors, and need to invest will yield a great buying season, Jotta gleevec verkossa. Buy iressa online cheap,

The Bottom Line For Vendors - Start The Subscription Revenue Model Shift

It's time to go on a SaaS offensive.  The train has left, but its not too late.  Expect hardware vendors, Oregon OR Ore., Ordering iressa online, telecom providers, and other companies looking to gain software multiples to enter the market via SaaS.  2010 will bring significant acquisitions in this space as well as more proliferation of SaaS offerings and PaaS delivery models.  Best of breed solutions delivered via SaaS will cut into on-premise market share.  Cloud computing will not be an end all be all.  Hybrid deployment will continue to be the norm, order gleevec. Buy gleevec online, Your POV.

Ready for some great renewal conversations in Q4?  Feel free to post your comments here or send me an email at rwang0 at gmail dot com for any assistance in contract negotiations with your vendor or the development of a software licensing and pricing strategy for 2010.

* Not responsible for any math errors or erroneous revenue information.  Calendar year estimates based on the quarter nearest the calendar year.  Exchange rates as of November 189th, halvalla epogen apteekki, Minnesota MN Minn., 2009.  Not responsible for currency flux.  Please read the quarterly filings yourself =)

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Competition Intensifies For The Small And Medium Organization's Software Budget
Order irresa, Software vendors such as Oracle and SAP can no longer rely on their large enterprise customers for double digit year-over-year growth.  In fact, their customers have not only reached a saturation point in being able to consume new solutions, but have also faced demands to cut their large maintenance bills.  With nowhere to go, enterprise apps vendors now turn to the small and medium sized market to drive their growth plans.  Consequently, billion to multi-billion dollar SMB stalwarts such as Infor, Microsoft, Sage, and Lawson are not standing still.  In fact, they seek opportunities to take market share from the industry leaders while fending off challenges from sub $500M SMB vendors such as Agresso, CDC Software, Deltek, Epicor, Exact, IFS, NetSuite, QAD, and Syspro.

Small And Medium-Sized Organizations Seek Enterprise Class Solutions Without The Resource Overhead

Globalization, irresa, Iresa, regulatory compliance, and economic demands results in similar market pressures for all sizes of business.  Size no longer plays a relevant role in business requirements.  In fact, irresa, Iresa, a recent survey of over 100 small and medium sized organizations, shows similar needs as large enterprises.  However, irresa, Irresa, small and medium-sized organizations can not afford the resource overhead required to maintain large and complex software systems.  The 10 areas that drive vendor selection decisions include (see Figure 1):

Figure 1. Small and medium sized organizations seek enterprise class solutions without the resource overhead

screen-shot-2009-10-24-at-82008-am


The Bottom Line - Ten Lessons Learned Emerge From Recent Vendor Selection Trends

  • Invest in last mile industry focused solutions.Customers expect their vendor to speak their language.  Solutions that lack vertical fluency and limited industry customer referencability will be relegated to the ERP graveyard, iresa. Irresa, Lessons learned: Demonstrate thought leadership in each vertical and lead industry discussions.  Focus on a handful of verticals.

  • Focus on rapid implementation and realization. Gone are the days of 12 to 18 month deployments.  Customers seek deployments times with less than 3 months, irresa.
    Lessons learned: Consider SaaS and OnDemand options.  Templates and productized roll-outs improve time to market but can't compete with  SaaS solutions and onDemand offerings in demonstrating value to customers.

  • Expand the number of trusted partners and vendors, order irresa. Irresa, As SMB's expand across the globe, they expect vendors to invest in trusted partners for both delivery and product footprint.  Customers expect partners to assist with localization in new geographies, iresa, Iresa, extend vertical solutions, and integration, irresa. Irresa, Lessons learned: Build partner ecosystems to geometrically expand reach while meeting customer needs.  No vendor can deliver on all customer needs.

  • Deploy easy to use reporting tools and BI. Value out of the box requires BI and reporting tools to be proactive and pervasive.  Users should have access to relevant and timely information along business processes, iresa. Irresa, Lessons learned: Design reporting tools with the end in mind.   Start with the value of information and embed throughout the business process.

  • Reduce administrative complexity and ownership costs. Order irresa, SMB's seek enterprise class capabilities sans the resource overhead of traditional large ERP products.  Business users need to be able to make changes and extend the system.  Ownership costs such as maintenance should deliver value or be reduced.
    Lessons learned: Design self-service administration capabilities from the get-go, irresa, Iresa, not an afterthought.  Software maintenance needs to deliver value or be offered in tiers based on perceived value.

  • Apply Web 2.0 style usability. Solutions should not require extensive training.  New generations of work expect the simplicity and ease of use from consumer based web applications, irresa. Irresa, Lessons learned: Invest in user experience and user interaction.  Design process flow based on role-based personas.

  • Improve stakeholder access. Employees, irresa, Irresa, partners, and customers must gain access to key business information.   Value should not be locked away from users when disconnected.  Mobile remains a future growth area, iresa.
    Lessons learned: Allow information to be accessed by everyone, everywhere, and at anytime.  New stakeholders will need access so apps should be designed with bullet-proof role based security.

  • Embed Microsoft Office Integration, order irresa. Irresa, Ability to use productivity tools should be a given.  Customers seek the ability to seamlessly integrate.
    Lessons learned. Success requires the design Office integration to be both a user interface and gateway into applications.  Clunky interfaces into Microsoft fail in adoption.

  • Deliver worry free updates, irresa. Customers should be able to update and upgrade software without significant time spent testing integrations and taking down the system.
    Lessons learned. Design application management into the system design.  Consider the business impact of down time.

  • Provide financing options Order irresa, .  Customers now expect vendors to provide financing to facilitate license purchases.  In many cases, clients seek financing to preserve cash position and add additional services such as training and implementation.
    Lessons learned. Use financing as deal enabler to drive not only license growth, but also larger deal sizes.  Financing is a weapon.



Your POV


Prospects and customers - do these requirements ring true?  Vendors -where are you with your SMB strategy. Let us know how we can assist.  Please post or send on your comments to rwang0 (at) gmail (dot) com or r (at) altimetergroup (dot) com and we’ll keep your anonymity.

Copyright © 2009 R Wang. All rights reserved.

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Iresa

Iresa, Most on-premise vendor continue to slip into significant YoY losses in license revenue and overall revenues.  Meanwhile, economic conditions continue to favor SaaS, best-of-breeds, and purpose built solutions. Major themes in the 2009 Calendar Year Q2 include:


  • Economic conditions drive demand for best of breed and point solutions delivered by SaaS deployment.  Consequently, irresa, Irresa, SaaS vendors posted spectacular double digit YoY gains.  Taleo (29.78%) led the pack followed by Blackboard (21.92%), and SalesForce (20.14%).

  • Despite subscription gains for SaaS, iresa, Irresa, professional service revenues dropped as client demand for rapid implementation and discounts in delivery cut deployment costs.  Many vendors reported shorter deployment times.

  • Specialty on-premise vendors JDA Software (8.38%) and IFS (6.00%) delivered significant gains as their purpose built solutions reflect the demand for deeply verticalized software offerings.

  • On-premise vendors continue to rely on maintenance revenues to stabilize or offset huge losses in YoY license revenues.  Customers are nearing a flash point over the high cost for maintenance.  Vendors will need to quickly demonstrate value or take a hit in maintenance renewals.


[caption id="attachment_3363" align="alignnone" width="802" caption="Software Insider Index® Q2 CY 2009 SaaS Vendors"]screen-shot-2010-03-18-at-95444-pm
[/caption]

[caption id="attachment_3364" align="alignnone" width="800" caption="Software Insider Index® Q2 CY 2009 On Premise Vendors"]screen-shot-2009-09-28-at-30312-am[/caption]

The Bottom Line - Worsening Economic Conditions Favor Purpose Built Solutions

Continued economic pressures force customers to choose best of breed and purpose built solutions.  SaaS vendors appear to be the beneficiary as the overall business model aligns with client pain points.  On-premise vendors will also win as they reduce the cost of entry and provide effective price points for purpose built solution modules in demand by clients.  With very little hope for a recovery in 2009, vendors will have to adjust their go-to-market strategies to deal with waning deal sizes.  It'll take more than a hat trick in 2009 to stabilize revenues.  With 4 months to go, iresa, Irresa, vendors should rethink their 2010 strategies to address price points, financing options, iresa, Irresa, and module availability.

Your POV.

As an end user, irresa, Iresa, have you found the deal process to have tipped in favor of the buyer?  Do you continue SaaS solutions with the same level of comfort as on-premise.  As a software vendor, do you feel you have the right go-to-market strategy for 2010?  Feel free to post your comments here or send me an email at rwang0 at gmail dot com for any assistance in contract negotiations with your vendor or the development of a software licensing and pricing strategy for 2010, irresa. Irresa, * Not responsible for any math errors or erroneous revenue information.  Calendar year estimates based on the quarter nearest the calendar year.  Exchange rates as of September 25th, 2009.  Not responsible for currency flux.  Please read the quarterly filings yourself =)

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Monday’s Musings: Five Programs Some Vendors Have Implemented To Help Clients In An Economic Recession

Almost every inquiry over the past 3 months has ended up with at least one question about what vendors are doing to help their clients amidst an economic recession.  As blogged in the October 12, 2008 posting on "5 Steps to Restoring Trust in the Vendor - Customer Relationship" the issue of credibility and trust remains at the forefront of today's concerns.  So over the past 3 weeks, I've posed a question to 47 of my friends on the other side of the aisle, "What are you doing to make it easier?"  I also put a quick tweet out this past Saturday that got some great responses.   To protect the brave who shared with me their views and mask the software vendors they represent (when the program is not public), let me share with you the five major themes/programs in order of most frequent first:
  • Create better peer forums to share information (45/47). Almost every vendor surveyed has a program to improve the online support capabilities.  User generated content in peer forums tops the list of initiatives.  Other plans focus on sharing data on benchmarks, operational metrics, and best practices.
  • Renegotiate existing terms (23/47). Some vendors are helping clients meet the realities of the current market conditions. Big on the list is helping clients address shelf ware without repricing of contracts.  For clients who paid full maintenance on software that's at least 4 years old, some vendors are offering to reduce up to 20% of the overall licenses not in use.  This leads to lower maintenance revenue but engenders good will among key clients.  Further, several vendors have allowed clients to apply credit towards another module as an alternative.
  • Offer more entry points to support options (17/47). The three pillars of software maintenance and support policies still apply.  However, several vendors are now offering more tiers of support as lower entry points.  Two vendors have finalized plans to offer just the bare bones legal and regulatory updates.  Other vendors have made it easier to come back with maintenance amnesty plans.
  • Assist with vendor financing (13/47). Clients seek access to financing, especially many in the mid-market who's credit lines have been zapped.  Microsoft has led the charge by providing 0% financing for its Microsoft Dynamics ERP and Microsoft Dynamics CRM Customers.  Other vendors such as IBM, Infor, Oracle, SAP, Sage also offer vendor led financing programs that include hardware, implementation, training, and other services.
  • Lower cost of usage and ownership (5/47). Though tops on the list as a conceptual practice, most vendors will need to roll out such initiatives over the next 24 months.  A few notable exceptions include Agresso with its VITA architecture which allows customers to rapidly make business and UI changes, Microsoft Dynamics customers who report back significantly lowered implementation and training costs compared to most vendors, and Epicor customers who report significant productivity gains with Service Connect and the EPM analytics in its new Epicor 9 release.
The bottom line. The good news is that some vendors have been listening to their customers about what they need and have put the motions in place to do the right thing.  However, the bad news -we still hear from many customers about vendors behaving badly by blocking access to third party contract negotiation support, third party maintenance, and training on products.  For those vendors who have taken a hard line on any or most of these programs, your customers know who you are and shame on you!  More on access to training in a future post! Your POV. If you’re a client, what’s missing?  As a vendor what steps have you taken to address this issue? Will you be able to convince your board and management to make the requisite changes.  Post a comment or drop me a line at rwang0 at gmail dot com. Copyright © 2009 R Wang. All rights reserved.

Monday’s Musings: Will Tech Vendors Without Credit Lines Survive The Financial Crisis?

Let's hope the government finds the most equitable and expeditious solution to the current financial crisis.  Without access to credit lines, enterprises lack the financial means to respond to the current economic downturn by transitioning their legacy systems and transforming their business processes.  Tech vendors who lack vendor led financing options will be the most vulnerable to this credit crunch.  These vendors may find themselves unable to close deals with clients shut out from the credit markets. Vendor led financing initiatives may prove to be the lubricant that keeps tech spending moving forward.  Tech vendors such as Sun, Intel, HP, Microsoft, IBM, and Oracle are best positioned to whether the financial crisis because they have their own financing arms - an important resource which will provide them with such capabilities to extend not only to their customers, but also to their key partners. Your POV. Look forward to hearing your views.  Where do you think the current crisis will take us?  If you've got an idea or suggestion to share, please comment or send a private email to rwang0@gmail.com.  Look forward to hearing your thoughts! Related posts:  See Infor's Move with IBM Copyright © 2008 R Wang. All rights reserved.

News Analysis: Infor Teams Up with IBM Global Financing

Vendor Financing Options Provide a Key Weapon in Battle for Tech Spending On June 28th, 2008, Infor and IBM Global Financing (IGF) announced a worldwide customer financing program for Infor customers. With the worsening global crunch on credit, this program provides Infor's customers with:
  • Access to a line of credit for key tech investments. Similar to other IGF deals, the program includes more than just Infor's entire line of business software. Other eligible items include software, services, hardware, and maintenance.
  • Flexible payment options. Customers can spread traditional up-front payments over time. Flexible payment plans for loans or lease extend up to 60 months. Interest rates are country specific.
Key facts about the deal:
  • Geographies: All
  • Products: All products, No IBM hardware or software required
  • Length of program: Up to 5 years, typically 24 to 36 months
  • Interest rates: Country specific
  • Partner eligibility: Open to all partners
  • Program inclusion: software, services, hardware, and maintenance.
The bottom line. Vendor-led financing options and payment alternatives provide users with opportunities to avoid up front payments and efficiently deploy capital. While financing options do not address the issues of recurring costs for support, upgrade, and hardware infrastructure, the bundling of professional services, hardware, and other related software offerings provide a compelling business case to choose one preferred IT vendor while deferring capital outlays. Financing will continue to prove to be the game changer in this consolidating and competitive software market. For more details on how other vendors have accomplished financing options see the Forrester Report from August 29, 2006,"Assessing New Software Vendor Financing Options" . Your turn. You've heard my view, but I'm looking to see how you've used vendor financing and if you see this as a game changer or not. Looking forward to your reply.