BUSA580

1

• BUSA580
• Kenneth Johnson, Dmitry Makhotko, Frances Skeete,
  Cathie Gillette,
• Kjetil Storaker

2
Agenda

• Market Assessment
• Solution Possibilities
• Product definition
• Product features/benefits
• Competitive advantage
• Distribution
• Partners
• Revenue
• Technical goals
• Recommendations

3
New Business Concept

• Network discovery tool capable of gathering
  information on
• Hardware (includes desktop, server, and mobile
  devices) configurations and
• Software licensing information
• Solving information gathering requirements for
  corporate and governmental networks of any size
• Supports the systematic detection and inventory
  of any device on the network

4
Conceptual Architecture
5
Market Assessment

• Rivalry
• Indirect rivals others in the business but
  either platform specific or integrated for
  specific software manufacturers
• Substitutes
• Nothing direct unless a network is entirely
  Microsoft products.
• No one product that covers all platforms.
• New Entrants
• Very few barriers to entry startup costs,
  labor, design, marketing
• NCMX has very little head start on any direct
  competition
• Buyer Power
• May already have a manual or electronic system in
  place
• NCMX is looking to break into the market
• Supplier Power
• Hardware and device manufacturers
• Broad and potentially harmful affects

6
Business Trends Drive Costs Down, Boost
Innovation, Manage Risk
TOP-TEN BUSINESS TRENDS, 2003
Ranking
Average weighted score (10 max)
1
2
3
4
5
6
7
8
9
10
2002
2001
2003
Costs/budget pressures
1
1
1
Data security concerns
?
4
2
4
?
Faster innovation
5
6
3
?
-
4
Business risk management
-
?
3
3
5
Single view of customer
2
8
6
Stakeholder pressure
-
7
-
Greater transparency of reporting
6
5
8
E-enabled business/government
8
10
9
Growing value of knowledge capital
-
-
10
Personal data privacy concerns
? ? Selected change in ranking compared with 2002
7
Top Management Priorities Provide Executive
Leadership, Demonstrate Value
TOP-TEN CIO MANAGEMENT PRIORITIES, 2003
Ranking
Average weighted score (10 max)
Forecast 2006
2002
2001
2003
1
2
3
4
5
6
7
8
9
10
Providing guidance for the board/executive
1
2
3
1
Demonstrating business value of IS/IT
2
3
5
2
Improving IT governance
3
-
-
12
Reducing total IT costs
4
5
11
6
Develop/enhancing IT architectures
?
5
8
6
8
?
Strategizing for IS/business linkage
6
1
1
3
Strengthening program/project prioritizationand
management
7
6
7
15
8
?
4
9
5
Developing leadership in IS senior team
9
-
-
4
Managing benefits realization
10
7
-
9
Tightening security / privacy safeguards
? ? Selected change in ranking compared with 2002
8
Top Technology Priorities Secure and Integrated
Technology
TOP-TEN TECHNOLOGY PRIORITIES, 2003
Ranking
Forecast 2006
Average weighted score (10 max)
2002
2001
2003
1
2
3
4
5
6
7
8
9
10
1
2
1
1
Security enhancement tools
Applications integration/middleware/ messaging
3
5
2
9
?
7
8
12
3
Enterprise portal deployment
5
3
17
4
Network infrastructure/management tools
6
1
5
13
Internal e-enabling infrastructure
Web design, development and content management
tools
2
-
14
6
?
?
Storage management (SAN, NAS) deployment
11
-
18
7
Customer Relationship Management (CRM)
9
6
8
6
-
-
2
Web services internal or external
9
Deploying XML based processes/ messaging
12
12
8
10
? ? Selected change in ranking compared with 2002
9
Top-ten 2003 CIO Management Priorities Details
Forecast 2006
Ranking in previous surveys
TOP-TEN CIO MANAGEMENT PRIORITIES, 2003
2002
2001
2003
Providing leadership and guidance for the
board/executive
1
2
3
1
2
3
5
2
Demonstrating business value of IS/IT
3
Improving IT governance
-
-
12
4
Reducing total IT costs
5
11
6
?
5
8
Develop/enhancing IT architectures
6
8
Strategizing for IS/business linkage
6
?
1
1
3
Strengthening program/project prioritization and
management
7
6
7
15
Developing leadership and behavioral competencies
in the IS senior management team
8
?
4
9
5

Managing benefits realization
9
-
-
4
Tightening security and privacy safeguards
10
7
-
9
? ? Selected change in ranking compared with 2002
10
Strengths

• Asset management tool
• Tool facilitates planning for server capacity,
  application rollouts, device upgrades, and
  network capacity
• Easy to understand reporting capabilities
• Reduces total cost of ownership (hardware /
  software)
• Potential management team
• Design for easy installation
• Scaleable
• Multi-platform, including mobile devices
• Utilize fourth generation programming language -
  XML

11
Weaknesses

• Security of data if leaves enterprise
• Lack working capital
• No workforce
• Scope creep
• Product can be easily copied

12
Opportunities

• First mover advantage
• Establish distribution channels
• Build barrier to entry through switching cost
• Became standard
• Products projected ease of use
• Increase company efficiency
• Reduce inventory hours
• Help to expose unused software and eliminate fees
• Update company software in time

13
Opportunities

• Unlimited potential
• Applicable to every industry
• Scaleable
• Assist CIOs in meeting their goals
• Show value of IT
• Reduce IT costs
• Be a strategic partner within their organization
• Centralize software license management of
  geographically distributed network with minimal
  IT staff

14
Opportunities

• Current methods are not reliable or there isnt
  an answer to all asset tracking problems
• Accurate info can take a lot of time
• Many fee structures available

15
Threats

• Other competition with deeper pockets already
  exists. For example, Tivoli Distribution 4.0 and
  Inventory 4.0 Agent (lt 2MB) per client
• Tivoli has relationship with Dell and Intel -
  machines are shipped with agent installed
• Large corporate customers will want enterprise
  license fixed cost
• Existing products deliver extensive, flexible
  reporting - need to bring more value than just
  flexible reporting

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Threats

• OS Constraints large enterprises may have 10
  functioning OS (Windows 95, 98, 2000 NT XP
  Solaris 2.6, 8, 9 HP-UX, etc)
• Server based environments typically have many
  resident tools database and file management,
  application queue management, etc this tool must
  function without impacting those tools
• Network Constraints impact of pushing updates
  (gt130MB) difficult

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Threats

• Existing competition
• Microsoft
• MSIN only for MS products
• SMS tracks MS, Winzip, Acrobat, etc. ,but not
  UNIX products
• Takes a lot of time to set-up, but easy to use
  once implemented
• Sits on SQL server
• Very expensive

18
Existing Competition
19
Existing Competition
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Product Definition

• Network discovery tool
• Monitor, collect and update data
• Hardware profiles
• Software installed on nodes
• Update of software
• Track mobile devices
• Gives user the ability to see license
  compliance
• Reports desired data in actionable format
  understandable to the average person

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Features Benefits

• Cross platform functionality
• Networks consisting of various OS and
  configurations
• Use of XML standard
• Simplified installation process
• Engine resides on server
• User interfaces only on select nodes
• Customizable reporting tools

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Evolutionary stage

• Birth
• Work with customers and suppliers to define value
  proposition for them
• Protect your ideas
• Tie up critical lead customers
• Establish channels of distribution

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Applications

• CIO
• Track network assets hardware and software
• Address cost/budget pressures
• Demonstrate business value
• Provide technical leadership and guidance for the
  board/executive team
• Data security
• Improve governance and reduce costs
• CFO
• Budgets
• Review and forecast with more detail
• CEO
• Through visual means be able to better
  understand the business value of IS/IT

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Competitive Advantage

• Technology would work across platforms
• Any Hardware HP, Sun, IBM, Compaq, Dell, etc.
• Any OS Windows, HP-UX, Solaris, etc.
• Any Database Oracle, Sybase, SQL, etc.
• Any Device Cell Phones, Hand-Held PCs, etc.
• No installation on nodes necessary
• Flexible pricing structure
• Scaleable
• Management tool that allows to obtain specific
  reports for different goals

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Competitive Landscape

• SMS, Tivoli, Xassets, Gasp 6, Bentley
• Concentrations on single platforms or proprietary
  software
• Developers are integrating software metering into
  product offerings
• No universal, cross platform network discovery
  tool

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Development Requirements

• Technology
• Determine how to address security concerns
• Personnel
• Should be able to easily translate business need
  to technical parameters
• Familiar with various environments / platforms
• Have the support staff to implement
• External
• Establish feeling of trust, so suppliers want to
  build long-term relationship

27
Distribution Strategy

• Partners
• ASPs
• Software manufacturers
• Integrators
• Direct
• Off the shelf version - retail
• Seek out clients sales staff
• Utilize endorsement from software organization
• FAST (U.K.)
• BSA (Business Software Alliance worldwide)
• CAAST (Canada)

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Marketing Strategies

• Strategy execution
• Trial versions
• Free or reduced cost
• Build in expiration
• Advertise in industry specific magazines and
  trade journals
• Narrow scope - try to reach the right people
• Conventions - conferences
• Software, hardware and industry conventions
• Sponsor PLU MBA student to do further market
  research produce conference or white paper

29
Partners

• ASPs
• Bundle NCMX with other software packages
• Software manufacturers
• Integrate NCMX technology into existing or future
  version of software products
• Integrators
• Monitor disparate networks
• Technology supplies superior accountability of
  assets

30
Direct Channel (FAST)

• FAST (Federation Against Software Theft)
• NCMX partner
• FAST has a similar role to the BSA in the United
  States and will recommend NCMX exclusively to all
  its member companies (over 2,300)
• This will make marketing NCMX services in the
  United Kingdom much easier
• Over 2,300 companies will have been recommended
  NCMX by FAST and are therefore very likely to
  utilize choose NCMX when software auditing,
  updating, installing and downloading is necessary

31
Direct Channel (FAST)

• FAST is based in London, England
• Provides consulting services for business
  customers
• Both for profit and not-for profit
• The company has several well-known customers,
  such as Vodafone, BP, BT, Lloyds of London, etc
• NCMX will go into partnership with FAST, and FAST
  will get 15-40 of the sale of NCMX products,
  depending on what FAST did to produce the sale
• FAST is NCMX main strategy in the United Kingdom
  (UK) market

32
Direct Channel (FAST)

• Profit margins are higher in the UK
• mainly due to lower competition
• However, marketing costs are also higher in the
  UK
• Support Staff costs are considerably higher in
  the UK than the US
• more infrastructure is necessary to produce a sale

33
Revenue Models

• Direct sales
• Setup fees installation and configuration
• Subscription license fee per user interface
  modules (monthly, yearly)
• Lease annual fee based on users and/or the size
  of the network (number of nodes)
• One time licensing fee no reoccurring fees
• Sell it out right - package
• Partner sales
• Flat fee per installation of integrated XML
  engine / interrogation tool by partner
• License fee per user interface installation for
  client use

34
Revenue Model - Direct

• Discover potential clients current costs of
  software management if any
• Calculate revenue potential using various models
• Deduce how long it will take to reach breakeven
  or acceptable compensation point
• Trade off setup fees for long term contract
• Use NPV to discover feasibility, breakeven and
  contract length needed
• NCMX would have the option to pursue or break off
  the relationship before costs get to large

35
Success Metrices

• Six Month Goals
• Solution designed and functional testing
  completed
• Working Prototype September 2003
• BETA testing completed, product revisions
  completed
• Referral/recommendation secured from FAST
  November 2003
• General availability release December 2003
• Twelve Month Goals
• Solution deployed successfully on six enterprises
• Additional referral/recommendation secured from
  BSA (or other software piracy organizations)
• Client ROI data available August 2004
• Cost savings
• Asset management control

36
2003 Timeline
Funding Initial
Design / Development
Prototype
Funding 2nd Round
Marketing Launch
37
Recommendations

• Concentrate on the partner channel unless an
  endorsement by software federation
• Browser based user interface
• Ensure ability of technology to be integrated by
  software developers (partners)
• Extremely flexible pricing options
• Off the shelf version free or limited trial
  version
• Dont overlook hardware asset tracking
• Educate potential clients dont try to sell
  them
• Use real life studies and examples (ROI) showing
  how software and hardware asset tracking can save
  users money and make developers money

38
Recommendations

• Concentrate on building user base
• Innovators and early adopters
• Partner with hardware manufacturers
• Target senior management on direct sales
• Build customer support mechanisms
• Alliances with partners, integrators, consultants
• Internal system
• Reporting compatibility with installed office
  software
• Wizard based reporting tool
• Well thought out data retrieval schedule

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Recommendations

• Obtain Beta clients and ensure their feedback is
  evaluated and used to drive product improvements
• Offer a wide range of reporting possibilities
• Products already present in the marketProduct
  must be better (easier to use / install / pull
  data), cheaper, and demonstrate compelling value
• Build relationships with mobile device companies
• Technology must support and function with no
  impact on various OS

40
Security Recommendations

• Security of transactions (Channel security)
• Standardized
• Keep XML schema secret
• Encryption
• SSL (Secure Sockets Layer)
• Security for mobile devices (Content security)
• No standard
• Encryption
• Antivirus
• Server security
• Identification numbers on agents
• Separate segments of server for each network
• No interference
• No access

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Recommendations - Exit

• Sell
• Sell
• IPO
• Sell
• Build and Expand
• Sell
• Adopt sell milestones
• Number of users
• Sales value

42
Possible Alliances

• Business Partners
• System integrators
• Software providers
• ASPs
• Technology Partners
• Search out complimentary technologies
• Network management systems (NMS)
• Operations support systems (OSS)
• Hardware manufacturers
• Platform Partners
• Operating systems
• Databases
• Service Affiliates
• Implementation consultants
• Educate consulting firms on the product and its
  capabilities

43
Selected References

• www.xassets.com
• KPMG, Cost saving realization managing you r
  assets, http//www.xassets.com/docs/kpmg.pdf,
  report to UK Plc, 2001.
• Romeo, J., Keeping Tabs on Software Yields
  Efficiency and Savings, Engineering News-Record,
  volume 249, Issue 24, 2002.
• Hoffman, T., Report Asset-Tracking Troubles Cost
  Plenty, Computerworld, volume 36, Issue 25, 2002
• James F. Moore Predators and prey A new ecology
  of competition
• Content security at hand Handheld device
  security http//www.f-secure.com/produ
  cts/white-papers/hhsecurity021122.pdf
• Interview Guruprasad Joshi - June 6, 2003
• Drive Enterprise Effectiveness The 2003 CIO
  Agenda presented by Gartner
• Vendors With Existing Products
• http//www.on.com/
• http//www.novell.com/products/zenworks/handhelds/
  
• http//www.synchrologic.com/
• http//www.novell.com/products/zenworks/handhelds/
  
• http//www.novadigm.com/
• http//www.starremote.com/start.htm
• http//www.wavelink.com/
• http//www.xcellenet.com/

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Questions ?