SoftGram Bi-Weekly for 08.14.2005, Vol. 1, No. 3 A Softletter Publication ========================================================= To unsubscribe from SoftGram, please use the link below and check the "unsubcribe from SofGram checkbox" at the bottom of the form: http://www.softletter.com/aspx/Profile.aspx You can resume your subscription anytime by returning to this form and unchecking this box. If you have not changed your profile, your username is the first letter of your first name and the first seven letters of your last name. Your password is "softletter." To update your address or change your profile, please use the link below: http://www.softletter.com/aspx/myMain.aspx To ensure you continue to receive your copy of Softletter, please add SoftGram@ezine.softletter.com to your white list. If you have any questions or concerns, please E-mail RickChapman@softletter.com _________________________________________________________ The latest issue of SoftGram is brought to you by: Macrovision Stop relying on generic e-mail blasts to sell your software Now software companies can easily send targeted messages directly to their end user's desktop with Update Service - part of the Macrovision FLEXnet platform. Download the 'Going Beyond Email' white paper. Learn how you can achieve a 70% response rate and generate more revenue from customers and trial users. Find out more at: http://clk.atdmt.com/MSI/go/mvo0130000030msi/direct/01/ ******************************* Business Objects Integrate Crystal Reports XI in your application. 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Find out more at: http://www.bobjects.com/email_imp/bi_nl/june05/infoline_resource.html _________________________________________________________ THE LATEST ARTICLE IN THE EQUITIES SECTION OF SOFTLETTER COVERS: Exit Strategies: Think M&A By Nat Burgess, Corum Group Can you think of a software company that was successfully handed off from father to son?  For traditional family businesses, lack of a suitable heir is a major concern.  For software companies, lack of a suitable heir is generally assumed, and instead we worry about the lack of a suitable buyer.  Can you think of a software company that has gone public without raising multiple rounds of VC and mezzanine financing in preparation for a public listing?  I can’t, but I know a lot of CEO’s who sold their companies without ever diluting their equity with outside capital. The numbers tell a simple story.  For every dollar in individual wealth created by an IPO, over twenty dollars in individual wealth is created through M&A.  The odds are high that a sale will eventually provide liquidity.  Let’s focus on the hard part:  Liquidity when?  And, how much? Experienced stockbrokers will tell you that they aren’t smart enough to “time the market.”  I don’t buy that.  They don’t buy 2 year CD’s a month before the Fed raises rates, and they don’t put their clients in high-risk equities a year before retirement (we hope).  The M&A market has similar dynamics.  Cheap debt, high cash balances, and pressure from the analysts to grow have combined in mid-2005 to create a very hot M&A market.  Activity is high across multiple verticals, and horizontal deals are closing at high valuations.  A company that could not draw a single offer in 2002 might get multiple offers today.  Barring other hurdles, this is a great time to test the waters.   How can you manage your company toward maximum value?  Simple:  demonstrate that you are the right company to take advantage of the right market opportunity at the right time.  The right company recruits great people, is fiscally prudent, creates fantastic relationships with its customers, and is able to defend its position.  The right market opportunity will offer growth and stability.  Attacking a market at the right time is more a function of perseverance than timing.  If you don’t stick with it, then you won’t have a seat at the table when the game gets hot. Excerpted from the August 31st issue of Softletter (http://www.softletter.com) _________________________________________________________ UPCOMING EVENTS INCLUDE: Marketing and Selling Open Source Software October 6th and 7th, Burlington, MA (Just outside Boston) November 10th and 11th, San Jose, CA Marketing and Selling Open Source is the first seminar dedicated to focusing on the growing business of selling Open Source products and services. Open Source has made the transition from a novelty to a powerful economic force in the software industry. This seminar answers the question: How do you grow a successful business using Open Source as a platform to profits? The seminar agenda will cover: * Successful Open Source business models * Case studies from companies successfully selling Open Source software and services * Fear, uncertainty, and doubt: Combating Open Source FUD * Managing intellectual property in the context of Open Source development * The GPL (and its myriad cousins): What are your obligations? * Integrating proprietary and Open Source products into your business model * The growth of Open Source: A look into trends, growth, and new markets The cost to attend Softletter's two day "Marketing and Selling Open Source Software, 2005" is $895 but if you register by September 30th you can register for $795 and save $100. Register today at: http://www.softletter.com/pages/MSOSS.shtml SAVE MORE WITH GROUP REGISTRATIONS! Save an additional $100 if you register two people from the same company, $200 per additional attendee if you register three or more! To book your group today, please call toll free 1.888.479.6663 ________________________________________________________ THE SOFTLETTER FORUMS NEW on the Softletter Forums: Subscribe to a thread! Post a question, subscribe to the thread, then anytime a new entry is made to the thread, you'll receive an E-mail notifying you of that fact. From The Softletter Forums: We sell a product targeted at sofware developers: http://www.elegancetech.com/csvb.aspx The product sells for $199 and we offer volume pricing: 1-4 USD: 199.00 per unit 5-9 USD: 169.00 per unit 10-19 USD: 139.00 per unit From 20 USD: 109.00 per unit The product is NOT something that we would expect every developer to want on his desktop, so we don't expect lots mult-unit sales. We do get some multi-unit sales. I assume that our buyers can be divided into 2 groups: 1) Those that buy 1 unit because they only need 1 unit. 2) Those that buy 1 unit, but install it on multiple machines. For the later group, would we get more volume sales if we had "bulk" pricing as follows? 1 unit: $199 5 pack (for up to 5 developers): $499 10 pack (for up to 10 developers): $799 Read this thread at: http://www.softletter.com/aspx/forums.aspx?f=thread&thread_id=4 _________________________________________________________ INFO POPS are sponsored by: License Technologies Group Since 1996, License Technologies Group (LTG) has been the established leader in providing solutions specifically designed for software publishers to more efficiently manage their software licensing business. Our systems and services support software license management, renewals management, eCommerce, Digital Rights Management, Partner Relationship Management and global fulfillment. We understand all of the nuances and best practices necessary to harness the power and profitability volume license and compliance programs can provide. Our experience in providing these solutions helps softwa practices and gain a strategic advantage on their competition. Smart Tools. Big Savings. http://www.licensetech.com ******************************* INFO POPS Like many companies, National Semiconductor is looking for ways to cut costs and has Linux and open-source high on its list. While the Santa Clara, Calif., company already is making the move to Linux, the big project this year is to take a close look at open-source databases to figure out where less expensive data management products could fit in its infrastructure. "We looked at MySQL last year as far as software relief in concert with our leveraging Linux hardware -- to be able to move a class of database applications from IBM hardware to Intel hardware," says Ulrich Seif, National Semiconductor's CIO. Excerpted from: http://www.computerworld.com/databasetopics/data/software/story/0,10801,104278,00.html?source=NLT_OPN&nid=104278 ******************************* "Creative Technology said Tuesday that it has been awarded a patent on the way Apple Computer's iPod organizes music, a move that could force Apple to pay royalties on sales of the digital player. Creative patented its method of automatically organizing digital music collections into categories, such as ``artist'' or ``genre,'' and presenting a series of simple on-screen menus to help the listener find a desired song." Excerpted from: http://www.siliconvalley.com/mld/siliconvalley/12523372.htm ******************************* "Google, Mr. Hoffman said, has caused "across the board a 25 to 50 percent salary inflation for engineers in Silicon Valley" - or at least those in a position to weigh competing offers. A sought-after computer programmer can now expect to make more than $150,000 a year." Excerpted from: http://www.nytimes.com/2005/08/24/technology/24valley.html?pagewanted=2&th&emc=th ******************************* Mr. Schmidt and his staff have had six weeks to restore a working relationship with CNET (and to apologize). They have not done so, leaving intact the impression that CNET committed lèse-majesté. So, too, did Fortune magazine in 1997, when it published a profile of Louis V. Gerstner, then the I.B.M. chairman. I.B.M. cut off contact with the offending magazine and pulled all advertising for good measure. The company did not explain the action, leaving readers to wonder whether Mr. Gerstner had been piqued by the magazine's description of his get-outta-my-way manner on the golf course. Excerpted from: http://www.nytimes.com/2005/08/28/technology/28digi.html?pagewanted=all ******************************* “The real ASP model, to my mind, has always consisted of a completely new class of applications and services, designed from the ground up to be delivered over the Internet on pay-as-you-go terms. A lot of people dismissed this model, because the first generation seemed unsophisticated and immature—and of course many were launched with spectacularly unrealistic business models. But the growing success today of leading proponents such as NetSuite, RightNow Technologies and salesforce.com (not to mention Web 2.0 incarnations such as BaseCamp and whatever Amazon has up its sleeve) suggests that there’s a prosperous future ahead for providers that adopt a software-as-services model to deliver applications on demand. Just don’t call them ASPs.” Excerpted from: http://blogs.zdnet.com/SAAS/?p=2&tag=nl.e539 _________________________________________________________ CHANGE YOUR SOFTGRAM SUBSCRIPTION : If you no longer wish to receive from SoftGram, please use the link below: http://www.softletter.com/aspx/Profile.aspx If you have not changed your profile, your username is the first letter of your first name and the first seven letters of your last name. Your password is "softletter." To update your address, please use the link below: http://www.softletter.com/aspx/myMain.aspx ==================================================== Softletter, 990 Washington Street, Suite 308S Dedham, MA, 02026 Voice: 860.663.0552. Fax: 860.663.0553