Precise Software Solutions Business to Business Case Analysis Note

Group Members Name Arvind Sogathur Ruchi Khare Ajay K Choudhary Roll No EMEP-10-005 EMEP-10-028 EPGP-03-005 eMail Address arvind10p@iimk.edu.in ruchi10p@iimk.edu.in ajay3e@iimk.edu.in

Precise Software Situation Analysis

Precise Software a Niche segment player with full functionality product for databases and OEM sales for storage via EMC. Good reputation, quality products that deliver to the requirements. $ 2.9 B market potential for a product with full functionality and across platforms. Full functionality unlikely in Insight for Open World 2000. Full monitoring product could be a possibility. Loss making unit for the past 4 years. High S&M expenses, however, commission to sales reps is below average compared to industry.
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Precise Software Case Issues

Decide if Insight should be launched by Sept 2000 or 2001? If Insight cannot be launched by Sept 2000, can a all platform monitoring product be released to the marked during Open world? Identify an appropriate pricing and selling strategy for Insight. Increase revenues or reduce S&D costs to sustain organization till Insight is launched & additional revenues are in realized. Goal to build Precise Software Solutions to a $100 M company.

Precise Software Decision Tree Analysis

Pros Cons Release during Oracle Open World 2000

Likely first mover advantage Able to penetrate market faster. Additional source of revenue for the organization. Possibility of profits instead of net loss.

Tip off competition Possibility of competitor's product also released during Open World. Insight product buggy or unstable. Loss of reputation as high quality products provider. Continue to make losses and bring firm sustainability into question.

Wait till Oracle Open World 2001 Full functionality and stable product. Increase in good will as quality products provider. Sufficient time to watch the market to come up with an appropriate pricing and selling strategy. May not have first mover advantage. Market may be tapped by competitors. Additional cost required to sustain for 2 years without newer sources of revenue.

Precise Software Selling Strategy

Sales Channel Direct Sellers What to Sell? Individual modules Pros and Cons Pros : - Existing contacts within customer organization. - Well defined and proven process. - 55% existing revenues from this channel. Cons: - Longer sales cycles. - Inability to show value proposition to customer Pros : - 45% revenue from VAR and SI. - Expect positive response as they already use SQL product - Easier to quantify value proposition as solution. - Likely to bring in higher revenue in short time. - Can establish a understanding on sales & pricing. Cons: - Focus on mature products. - Significant hike in product cost as VAR & SI added 30/35% on top of product cost.

VAR and SI

Product and Solutions

Precise Software Recommendations

Use modular approach for developing Insight as a product. Price modules and full product separately. Release monitoring product for all products in Open World 2000 this will inject more cash but may tip off competition but this is inevitable. Sell monitoring product as per their current selling strategy (except OEM). Release full product as a Solution in 2001 Open World. Release remaining modules as separate tools in 2001 Open World. Develop relations with VARs and System Integrators to sell Insight as a Product & Solution. Individual modules to be sold as per current strategy. Price full product lower than all modules put together.
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