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201011 acquisition and business models software industry
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201011 acquisition and business models software industry

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  • 1. (C) Dr. Karl Popp 2010 1 http://www.drkarlpopp.com Chances and risks of software business models during mergers and acquisitions Dr. Karl Popp Corporate Development SAP AG karl.michael.popp@sap.com http://www.drkarlpopp.com
  • 2. (C) Dr. Karl Popp 2010 2 http://www.drkarlpopp.com Business Models Typeof Goods/Servicesoffered Financial Physical Digital goods Human Creator Entrepreneur Manufacturer Inventor n/a Distributor Financial trader Wholesaler, Retailer Intangible s distributor n/a Lessor Financial lessor Physical lessor Intangible s lessor Contracto r Broker Financial broker Physical broker Intangibles broker HR broker Based on source: Weill et al., Do Some Business Models Perform Better than Others? A Study of the 1000 Largest US Firms, MIT Center for Coordination Science Working Paper No. 226, 2005.
  • 3. (C) Dr. Karl Popp 2010 3 http://www.drkarlpopp.com Specifics of the software industry –Software as digital good – marginal cost of production very low –International company structures even in small companies –Intellectual property is in the focus of all companies –Companies use similar Business Models for intellectual property
  • 4. (C) Dr. Karl Popp 2010 4 http://www.drkarlpopp.com Chances and risks of software business models Business Model Chances Risks Inventor Monetizing intellectual property Safeguarding and defending IP Lessor Growing license revenues Revenue does not scale Services Growing service revenues Cost too high, quality issues
  • 5. (C) Dr. Karl Popp 2010 5 http://www.drkarlpopp.com Management of acquisition risk Business Model Risks Risk Mitigation Inventor Safeguarding and defending IP IP Management Lessor Revenue does not scale Early, detailed revenue planning and revenue commitments Services Cost too high, quality issues Detailed planning and early implementation of scalable model for services
  • 6. (C) Dr. Karl Popp 2010 6 http://www.drkarlpopp.com Background information Business Models in the software industry http://www.drkarlpopp.com/BusinessModelsintheSo ftwareindustry.html Profit from Software Ecosystems ISBN-13: 978-3842300514 Business Models, partnership models and ecosystems in the software industry Examples from over 50 software companies