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Secrets of Software Success: Chapter 2007

. Secrets of Software Success. Quick overview of Global Software landscapeDimensions for key segmentsMacro-economic industry trendsTraditional success factors in software industryBuilding blocks for successful software companies in the futureOpen discussion. Although packaged software is th

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Secrets of Software Success: Chapter 2007

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    1. Secrets of Software Success: Chapter 2007 Forthcoming slides contain notesForthcoming slides contain notes

    2. Secrets of Software Success

    3. Although packaged software is the smallest revenue producer in the high tech sector…

    4. …it has captured the largest share of market value

    5. Defining the Software Industry landscape

    6. Packaged software industry landscape by functionality

    7. Secrets of Software Success

    8. Macro-economic industry trends- observations

    9. Software industry is maturing with improved margins and stabilizing sales growth 1. On the whole, the relatively young software sector is stabilizing 1. On the whole, the relatively young software sector is stabilizing

    10. Long term implied growth rates rank software near top of industry sectors 1. Markets expect high single digit growth rates for most software players. 2. Will norms and expectations from other mature industries begin applying to software?1. Markets expect high single digit growth rates for most software players. 2. Will norms and expectations from other mature industries begin applying to software?

    11. Size of company remains a significant driver of margins 1. The wide gap in margins are directly correlated with segment size 2. After growth rates, margins are a key differentiator in software valuations1. The wide gap in margins are directly correlated with segment size 2. After growth rates, margins are a key differentiator in software valuations

    12. Global software deal volume and values are growing steadily Notable PE/VC Deals: $0.2 B Akamai (2003), $0.6 B Red Hat (2004), $1.26 B Serena Software (2005), $1.3 B Intergraph Corp (2006) Notable PE/VC Deals: $0.2 B Akamai (2003), $0.6 B Red Hat (2004), $1.26 B Serena Software (2005), $1.3 B Intergraph Corp (2006)

    13. Software supply continues to globalize 2005 Computer science graduates/year Thousand

    14. Secrets of Software Success

    15. Traditional software premises and corresponding success factors

    16. Invest in people Given the crucial importance of the people dimension, huge investments in this field are required and justifiedGiven the crucial importance of the people dimension, huge investments in this field are required and justified

    17. Turnover management

    18. But the world has changed

    19. Tide is shifting from a story of “consolidation” to one of “business model changes, innovation, and globalization”

    20. Secrets of Software Success

    21. What will be the building blocks for successful software companies?

    22. 1. Customer experience really does matter Source: MGI Source: MGI

    23. Areas that must be worked to professionalize the Go To Market approach

    24. 2. Optimize software supply chain

    25. Historically, R&D levels have not correlated well with growth

    26. Incorporate customer-developed components into your products

    27. New software players within emerging markets

    28. 3. New platforms will become more important growth drivers

    30. 4. Productivity creates leadership

    31. Wide dispersions in productivity exist

    33. 5. Ecosystems must be managed to capture maximum value

    34. Future software company operating model?

    35. Contact Information

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