Precise Software Case

Solution
By
Group 5

CASE FAC TS
Precise is developing performance management and availability
software

serving firms.
Precise/SQL: Software product managing the performance of
PRODUCT PORTFOLIO
applications
utilizing Oracledatabase: targeted at users of proprietary applications

Inter point: Software product monitoring the database

eficiency of large
Enterprise ResourcePlanning applications

Precise/Pulse: Software product continuously monitoring the

underlying

PRO D U C TYPES
T
The market is fragmented and the products were
diferentiated in two
ways:

Based on the underlying resources and platforms with which they

were
associated
Based on the functionality they ofered.
Monitoring
Detection
Improveme
nt

CH AN N E STRATEG Y
L

Direct Sales.

Indirect Sales : Value-added resellers, System

integrators and
Original equipment manufacturing agreements

SALES CYCLE :- ( 6 to 12 months)

TH E IN SIG H T O PPO RTU N ITY

PRODUCT :- End-to-end performance management

product.

Important indicator of systems effectiveness:

end-to-end response time
POSITIONING :- Precise should be positioned
as a provider of enterprise performance
solutions, not just products.
This enables them to become an end-toend infrastructure company not a database company

PRICIN G

Pricing structure: one-time license fee + recurring revenue

from

annual maintenance and service contracts and additional

revenues
from product upgrade ( 15% to 20% of one time licensing fee)

Additional revenue from existing customers was also

available via
product upgrades and cross selling other products

M ARKE D YN AM IC
T

S
Large Market

No Current Direct Competitor

Substantial Value Proposition (also it would allow
precise to diversify
its customer base )

First mover advantage

EXISTIN G

PAIN PO IN TS

No products including Precises products focused on the

overall
performance and the reasons for underperformance

specific source of problem was not possible to be

identified
Resulted in the phenomenon BLAMESTORMING
Slow end to end response times were often
undetected and when detected went unaddressed

Q 1) Should Alon plan on

introducing
Insight at O pen
w orld 2000?

W H YES ?
Y

First mover

As of 1999, none of the companies ofered end to end

solutions , so by
moving quickly and being first to market , precise could
establish itself as
Easy to
the market leader.
it was thought that it would be very easy to sell it since it
sellwas easier to
make the benefits of product tangible and
As,
understandable

advantage :-

Investment in erp was high so no scope of errors and fallbacks

expected

Applications were data intensive

RIGHT PLACE , RIGHT TIME

annual conference gathered together thousands of

interested and motivated prospects, who could hear
about and see demonstrations of new product.
This meant a good marketing platform for the new
product with least
expense in terms of cost and time and maximum impact.

W H NO?
Y

REPUTATION AT RISK
Going to market too early with a product with not enough
functionality will damage the reputation of the product and
might
not
begoing
attractive
in terms
of value
to the
customers.
Also,
too early
with an
immature
product
will allow

THREAT OFtoCOMPETITORS
competitors
come up with better alternative solutions and
snatch
the chances from Precise to be a leader in the industry.

WH N ?
Y

LIMITED FUNCTIONALITY
The product if developed targeting Open World could only have
the
monitor functionality in the best case scenario, however the
complete analyze functionality would be missing and will be
The company
is still not sure on how they will market the
seen
as
product
a
gap.
and
how
will price this product
LACK
OFthey
PREPARATION

FIN AL VERD ICT

Introduction in OpenWorld2000 is not recommended based on

so it

Is recommended to wait for the OpenWorld2001 to

release the
product

An immature product, with just monitor functionality

and no nice
user interface, will be seen as a down product by
customers. Since a
GA version could only be available in 18 months from

Q 2) W hat should
for insight?

precise

strategy

be

Should they launch a separate sale

force for the new product or sell
it through their existing
sales
force? H o good is their current
sales force?
w

A direct selling approach should be used for this

product.

and

Insight being a premium and complex product a

well trained dedicated sales force will achieve
better results.

Difficult
toshould
sell through
system
integrators
Sales
force
be trained
to provide
effective end-toand VARs. It should be promoted and sold
end
aggressively.
performance
management solutions.
They are recruited only to bring in clients for

Q 3) H o should Insight be
priced? D evelop an RO I
w
m
odel
for Precise/SQ L
product.

Insight Pricing

We would recommend value based pricing approach.

That means a price for a customer should be
proportional to the perceived value derived by the
customer from the solution

DBA SAVING
Hours saved per week
total no of hours saved a year
Assuming 40 working hours per
week
total no of hours worked per year

USER SAVING
9.4
488.8
8 hr*5
2080

Hardware Savings

Average end user salary

30000

Average employee burden rate

Imporvement in end user reponse
time
Average Daily transaction

Cost of capital saving

21450

25%

saving due to price drop

64350

total saving

85800

194000

60000

no simultaneous user

Saving per DBA

14100

intial response time

10

transaction per user

902.3255814

141000

daily response time

3.759689922

Total Savings

Saved hrs
% of saved hr in a day
saving per user
Total saving

TOTAL SAVINGS
Average price
no dab

474238.
1
30000
10

10%

33%

Average DBA Salary

Average no of DBA

Assuming annual interest rate

215
15 sec

0.9375
0.11625
1150.875
247438.125

TH AN
K

YO U !