CSC444F'07Lecture 11 The Software Vendor Business Environment

CSC444F'07Lecture 12 The Software Vendor’s Business Make money from –Providing software and related services Software –Must satisfy a need or a want in a market that is Big enough Is willing to pay enough to pay the costs + re-invest + profit –Licensed (not sold) + maintenance Bulk discounts Negotiable prices –Follow-on revenues are key Maintenance, Upgrades, Consulting, New related products,... Software is quite “sticky” –Cost of acquisition –Need to ensure sold software is used »Not “shelfware”

Software Releases Releases are the lifeblood of the software vendor company. –Must get an initial release of a new product out the door. Must support and maintain that release. Must market and sell it –Must get new feature releases out the door on a regular schedule CSC444F'07Lecture 13

CSC444F'07Lecture 14 Software Vendor Structure Shareholders –Owners of the company. –All profit and value increase accrue to them –They elect the Board –True for publicly traded or privately traded companies

CSC444F'07Lecture 15 Software Vendor Structure Board of Directors –Represent the shareholder’s interests –They appoint the officers of the company –Will advise the CEO –Responsible for company acting lawfully

CSC444F'07Lecture 16 Software Vendor Structure Chief Executive Officer –Appointed by the Board –In charge of running the company day-to-day By coordinating the activities of the Executive Team –Commits to financial targets (revenue growth / profitability)

CSC444F'07Lecture 17 Software Vendor Structure Executive Team –VP’s and “C-Level” officers hired and assembled by the CEO –In charge of running the company day-to-day –Meet regularly to coordinate activities and to set strategy –Functional responsibilities + corporate responsibilities

CSC444F'07Lecture 18 Marketing Product Management –Defining what products/services the company will sell at what price –Preparing collateral materials for partners and sales –Coordinate the release activities –Key area

CSC444F'07Lecture 19 Marketing Marcomm –Communicating with the external world –Advertising, press releases, - generate “buzz” –Experts not at product (see prod mgmt) but at knowing how to reach people with a message –Lead generation to feed sales pipeline

CSC444F'07Lecture 110 Marketing BusDev –Developing new business opportunities –New channels to market –New geographies –New partnerships

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CSC444F'07Lecture 112 Sales Responsible for achieving the revenue number. Sales models: –High-level direct sales Identify decision makers with budget, chase them down, negotiate terms, close –Dialing-for-dollars Dial out to big lists assembled by marketing –Channel sales Sell indirectly via other organizations Paid via base + commission –May not be profit based –Therefore need strong sales management

CSC444F'07Lecture 113 Sales Process Sales “pipeline” or “funnel”, E.G., –Leads –Qualified opportunities –Short-listed –In negotiations –Close Sales management maintains pipeline –Attaches estimated close date, sale value, and probability of close to predict future revenues –Keeps the pipeline filled Uses a CRM system

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CSC444F'07Lecture 115 Client Services Pre-sales support –Technical help for the sales group –Implementation project planning pre-sales Onboarding / Implementation –Ensuring a customer starts using the software Account Management –Ensuring customers are happy –Mining to see if they need additional software/services Customer Support –Help desk

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CSC444F'07Lecture 117 Finance & Admin The mechanics of establishing and reporting against budgets Spending controls –Purchase requisitions. Purchase orders, signing limits,... Taxes Financing –Leasing arrangements –Cash management –Investments Funding –IPO’s –Private investments –Investor relations Administration –Human resources –Office management –Internal IT

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