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There was some good news today when the Institute for Supply Management reported that the purchasing managers index rose to its highest level since April 2006 - 55.9.  This is yet another sign that we’re heading in the right direction, but we’re far from out of the woods.  Many of the factors built into the Wall Street Journal article back in August are still with us, and so the path we’re on remains unclear - Sharp Rebound; Slow Growth; or Double-Dip.

Since the recession officially started two years ago, we’ve all been focused on the bottom line and cutting costs like crazy.  The Bureau of Labor Statistics reported in December that Productivity in the non-farm business sector in Q3 of 2009 rose by 8.1%, the largest increase since the same quarter in 2003.  Which means that businesses are doing a great job of getting the most out of their remaining workforce after multiple Reductions in Force.

However, as we move forward, we need to change our focus if we’re to do more than just survive.

Moving Focus to the Top Line

So the question is, while we’re on the path to recovery, how can we take advantage of the sales opportunities that arise and grow the top line?  Traditionally, if we were to focus on increasing sales we’d have to invest ahead of the curve in sales resources - new or additional account, regional, country, or market coverage. 

In this environment, the length of a sales cycle is not predictable and when the recovery will actually occur is unknown.  This brings a great deal of “Balance Sheet Uncertainty” when companies do not have the resources to gamble.

Balance Sheet Uncertainty

So again, what do we do to get back into growth?

Enterprise Software - Take Your Product and Business Online

Fortunately, for Enterprise Software companies, there is an option - move your software and sales process online.  I do not mean for you to rewrite your software and business model overnight, but to install your software as-is on the Xuropa Platform.  You can then delivery your product for demonstrations, evaluations, training, or even in a post-sales Software-as-a-Service (SaaS) model.

In this manner, you are able to lower your cost of sales while focusing on growing your top line revenues.

Revenue Growth with Xuropa

Once your software is installed on the Xuropa Platform, you’ll be able to employ it to solve a large number of sales challenges.  And your business will be able to participate in the benefits of the SaaS model without having to re-invent your company. 

For more information on how we can grow your revenues, contact us at sales[at]xuropa[dot]com.

Posted under business, industry

Maybe you missed the news (as I did), and only caught it once the Thanks Giving turkey had settled - but great news it is indeed!

Slower than other platforms (eg. Facebook Connect), LinkedIn has been integrating out into the web, but now the pace is really picking up. 

On November 9th LinkedIn announced the Twitter partnership, and then came the really exciting news - the doors really flew open with an official LinkedIn Platform play on November 23rd.

We’ve been waiting for this a long time.  Ever since we enabled the import of LinkedIn Profiles into your Xuropa Profile we’ve wanted to enable our users to move data smoothly between the two platforms. We’re not about re-inventing wheels if we don’t have to.

Currently, we’re on a march to improve the overall usability of the Xuropa Platform.  But look forward to some interesting integrations in the future.

Posted under Features, Xuropa, business, marketing

My favorite source of online music is Pandora and their Music
Genome Project.  If you’re not familiar with them, it’s a web based service that streams high quality music to your browser through a flash applet.  Just the idea of working out my musical “genetic” make-up was cool to me, but it was the exploratory nature of it that really got me hooked.

Essentially, you first of all seed your stream with some of your favorite tracks, musicians, or bands.  From that Pandora’s algorithm starts to stream to you similar music with the bands you selected sprinkled in.  The genetic part of it is when you see common threads across music that you may not have listened to or heard of otherwise…but you like.  For example, seeding with 80’s alternative music (New Order, Joy Division, Spear of Destiny, etc.) got me to modern era Killers, The Strokes, and a few other bands that I either hadn’t heard of, or only peripherally.  But you can tell their “musical genetic makeup” is very similar…and I liked it!

So - a cool app that many people love, but their business model was broken.  There they were delivering tons of value to users, but they were trying to monetize that value through advertising.  Of course this wasn’t working for them, especially as they have to pay royalties on the music they stream.  So today I noticed that they have moved over to a subscription, or “freemium” model.  This makes complete sense.  You get 35 hours free per month, and then you have to pay $36 per year for better audio quality and no advertising (there are other premium features, but who really cares about “skins”?)    There we have it - Music-as-a-Service!  MaaS!!

Now that their platform is built, their greatest costs are licensing royalties that I’m assuming they pay after the fact.  So charging “power users” up-front will put them in a good position to fund the company and the royalties.  I hope they make it (there were rumours that they were struggling hard and may even shut down).

Now, why $36?

SaaS (Software-as-a-Service) is all about charging for value as that value is consumed…or as near to this as is reasonable to expect, ie. monthly or annually (with discount).  And here lie the challenges for companies looking to move to a SaaS model:

1. Is there a free (or relatively cheap) version of the product with a reduced feature-set that provides some value without giving up the farm?
2. Can the lower priced version of the software be delivered and supported in a low cost manner?
3. Is there a clear and natural path to upgrade to the premium product that will make up the core of your business?
4. What are the features of your software that provide 80% of the value…and what is their value to the end-user?
5. What is that value, what is it worth, and how should it be charged?

Within the electronic design tool industry segment, business models and use models are essentially orthogonal today.  SaaS provides a way to bring these models more in line. 

But as I’ve argued before, unlike the current license-based model, it’s not a simple equation for electronic design tools with a one-size-fits all approach.  Not only do different tools deliver different levels of value, but also the value is consumed in different ways - ie. use models differ depending upon the tool being used and where in the chip design process the tool is being used (verification and simulation tools are a good example of this variance over time).

Fortunately, a SaaS model not only provides a low cost delivery and support vehicle, it also provides you with visibility into the use of your product and the mechanisms to adapt relatively quickly to market conditions and learnings gained. 

There-in lies the opportunity to better serve your customers, and your investors…or maybe GET customers and investors!

Posted under business, industry