Merging of ISV and custom development companies: benefits of cross-selling<br />
Brief ISV portrait<br /><ul><li>Bulk sales and passive selling
 Important role of product management and marketing
 Product-oriented development process
 Limited development resources
 Unable to satisfy customer’s requests for custom features </li></li></ul><li>Brief Custom Development Vendor (CDV) portra...
 Important role of account management and personal contacts
 Project-oriented development process
 High cost per customer acquisition
 Tough competition by price </li></li></ul><li>Synergies<br />Cross-selling of services through products<br />Eliminate ca...
Two forms of cross-selling<br />=<br />+<br />B<br />+<br />=<br />A<br />C<br />
Two forms of cross-selling<br />=<br />Two related products<br />Each product with its own value <br />+<br />B<br />+<br ...
Two forms of cross-selling<br />=<br />Two related products<br />Each product with its own value <br />+<br />B<br />Solut...
Service through a product<br />Value A<br />Value B<br />Product<br />Service<br />Revenue A<br />Revenue B<br />Solution<...
Example<br />INT, Inc.<br /><ul><li>Components for GIS
Vertical markets: geology and geological survey, mining industry
Annual revenue:$25 millions
Components are10% of revenue and  just way to acquire client
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ESWC\'09

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  • Good afternoon Ladies and GentlemenMy presentation is devoted to giving you idea about one more possible way to expand your business and increase revenue.It’s not just a theory. These ideas are based on my experience.
  • First, I would go through key characteristics of ISV and custom development companies. Small remark, I talk about ISV that works on B2B market.ISV is a mass market company. I.e. ISV deals with a large number of customers and isn’t able to go directly to an each customerISV should pay attention and to be perfect in marketing and product managementDevelopment process is focused on a product. Persistent development team.Due to its nature ISV usually does not have developers for customization of a product for specific needs of a customer
  • Say customer development vendor is on opposite side of software market.-CDV acquires customers through direct and active sales. Sales calls, direct mail, references, exhibitions. Main sales tactics is to find a decision making contact within an organization-Key factors to be successful are account management and personal contacts. Work with each account-Development process is focused to perform project with specific quality, during specific time and within specific budget. Project managers instead of product managers. Project manager keeps focus within specific project instead of planning of product development for years-CDV usually experiences pressure on wide market and forced to compete by price instead of expertise or quality
  • As a result of merge
  • ESWC\'09

    1. 1. Merging of ISV and custom development companies: benefits of cross-selling<br />
    2. 2. Brief ISV portrait<br /><ul><li>Bulk sales and passive selling
    3. 3. Important role of product management and marketing
    4. 4. Product-oriented development process
    5. 5. Limited development resources
    6. 6. Unable to satisfy customer’s requests for custom features </li></li></ul><li>Brief Custom Development Vendor (CDV) portrait<br /><ul><li>Direct sales and active selling
    7. 7. Important role of account management and personal contacts
    8. 8. Project-oriented development process
    9. 9. High cost per customer acquisition
    10. 10. Tough competition by price </li></li></ul><li>Synergies<br />Cross-selling of services through products<br />Eliminate cash-flow gaps <br />Reduce operational costs<br />Optimize infrastructure usage <br />Accelerate products development<br />Optimize development resources load<br />Test products through custom development<br />
    11. 11. Two forms of cross-selling<br />=<br />+<br />B<br />+<br />=<br />A<br />C<br />
    12. 12. Two forms of cross-selling<br />=<br />Two related products<br />Each product with its own value <br />+<br />B<br />+<br />=<br />A<br />C<br />
    13. 13. Two forms of cross-selling<br />=<br />Two related products<br />Each product with its own value <br />+<br />B<br />Solution with value that even higher than A+C<br />+<br />=<br />A<br />C<br />
    14. 14. Service through a product<br />Value A<br />Value B<br />Product<br />Service<br />Revenue A<br />Revenue B<br />Solution<br />
    15. 15. Example<br />INT, Inc.<br /><ul><li>Components for GIS
    16. 16. Vertical markets: geology and geological survey, mining industry
    17. 17. Annual revenue:$25 millions
    18. 18. Components are10% of revenue and just way to acquire client
    19. 19. Revenue is driven by value-added services</li></li></ul><li>Cross-selling potential<br />
    20. 20. Cross-selling potential<br />
    21. 21. Cross-selling potential<br />
    22. 22. Cross-selling potential<br />
    23. 23. What services can be cross-sold?<br /><ul><li>Consulting services
    24. 24. Training and webinars
    25. 25. Customization of a product
    26. 26. Personal support
    27. 27. Solutions development</li></li></ul><li>How it works?<br />
    28. 28. How it works?<br />
    29. 29. Case study<br />Herrenknecht AG<br /><ul><li>Construction of boring machines
    30. 30. IT department was seeking for data visualization components to develop new version of PCS
    31. 31. During pre-sales process sold development of the whole application</li></li></ul><li>Thank you<br />Dmitry Starostenkov<br />CEO<br />ds@perpetuumsoft.com<br />Skype: stardmitry<br />

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