Precise software solution

Group 6

V VinodDheeraj KumarSatheesh GowthamShiva Kumar REva Cecchinato

Precise software solution• Company developing performance management

and availability software• Served firms with a complex network of

hardware and software components• IT structure:– Web/network– Application– Database– Storage

• The leading seller of database management systems was Oracle followed by BMC and Quest

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Major Issues:new product development

When introduce the new product

How introduce the new product

•Spead-to-market

•Risk that competitors are going to copy the same offering

•Decide the selling strategy: use a separate sales force?

The market for performance management and availability software

• Market with High Growth Rate: Expected to double in 2003

• Fragmented market

• products were differentiated in two ways:

- in terms of the underlying resources and platforms with which they were associated

- in terms of functionality they offered. 4 groups:

✓monitoring

✓detection

✓improvement

✓analysis

• Three main competitors: Oracle, BMC, Quest

• Sales channels: direct sales + indirect sales (value-added resellers, system integrators, original equipment manufacturer agreements)

• long sales cycle: 12 months

• pricing structure: one-time license fee + Recurring revenue from annual maintenance and service contracts & additional revenues from product upgrades

Precise current offerings: • Precise/SQL: Software product managing the performance of

applications utilizing Oracle database: targeted at users of proprietary applications

• Interpoint: Software product monitoring the database efficiency of large Enterprise Resource Planning (ERP) applications.

• Precise/Pulse: Software product continuously monitoring the underlying database.

• Precise/Presto: For monitoring the performance of EMC storage products: Sold on an OEM basis by EMC

Sales Strategy • Dual-channel distribution system• In North America the sales force was comprised of 17 account

executives. • The reps were well trained in all products and good in solving

database problems• Internationally the company sold through distributors• The target was the DBA, because:

- The product benefits accrued to the DBA- Impartial evaluation of DBA performanceSales Process

• Targeted firms with a sales of at least $ 100 million and which used database intensive applications

• Approached DBA and ascertained his/her budgetary authority• Approached the manager via DBA if needed• Studied the extent to which examples resonated with DBA’s

experience• Offered to demonstrate the product realtime after qualifying the

prospect

• Value proposition: end-to-end performance management product

• important indicator of system’s effectiveness: end-to-end response time.

• Precise should be positioned as a provider of solutions, not products:

a. large market

b. no current direct competitor

c. substantial value proposition• Speed-to-market: introduce the GA version of Insight at Oracle’s

annual OpenWorld conference in Sept 2000• Key decisions to make:

a. Should the Product be introduced in Openworld 2000?

b. What should the product look like? Full-functionality or just monitoring?

c. How it is going to be sold? Sales strategy

d. How it is going to be priced? Pricing strategy

A new product: Insight

Recommendations • When to introduce the product?

• Only monitoring functionality with a crude interface possible by OpenWorld 2000• Goes against the reputation of being a developer of high quality products• Introduction of the crude version might limit the price which the full version can command• Gives time for the competitor to come up with a better product• Introduction in OpenWorld 2000 not recommended• Sales Strategy• Intends to sell it as a Solution to all tiers of the IT system• Current salesforce having expertise in all of company’s products except presto• Use the existing sales structure for the new product• Training for the sales force on Storage devices • Training to influence CIO level decisions as Insight price will be higher • Value based pricing Approach recommended for Insight

ROI model for Precise/SQL

Savings from DBANumber of hours worked by DBA per week 45Hours saved per DBA per week 9.4Average Salary $60,000 Hours worked per year 2340Hours Saved per year 488.8Total Saving Per DBA 12533.33Number of DBA 10Total Savings from DBA 125333.33

Savings from End UserEnd User Salary $30,000 Average employee burden rate 33%Improvement in End User time per transaction 25%Savings Per User $2,475 Number of Users 215Total savings through users $532,125

Hardware Cost SavingsAverage Annual hardware budget $1,430,000 Hardware cost savings if postponed by one year $429,000.0 Probability of postponing hardware purchase by 3 months 0.6Savings $64,350.00 Net Savings $721,808.33 Total cost of 10 DBA installation @25000 with 25% discount $187,500 ROI 285%