|
Business Insights for Software Developers and Publishers www.softletter.com |
|
Vol 4, No 2 In This Issue's Softletter
Softletter's Marketing and Selling Sold Out! SaaS Seminar
|
The Softletter CEO 2008 This survey covers Chief Executive Officer (CEO) compensation and asks only four questions . We're looking for some fairly standard information--in particular, a comparison of "base salary" vs. "variable pay" (bonuses, commissions, etc.) for your most recent full year and for the previous year. In addition, we compare salaries based on company development stages, an important factor that's rarely taken into account in other salary surveys. Everyone who supplies data for this survey will receive a complimentary copy of the summary report in the February 15th issue of Softletter! Of course, all responses will be strictly confidential. We won't disclose or identify data about any individuals or about participating companies. The Softletter 2007 Website Security and Up Time Survey is Now Open This survey covers website security and up time. As you are undoubtedly well aware, doing business online can be a dangerous exercise. Recent security breaches involving the states of Massachusetts, Vermont, Connecticut etc., the massive loss of data at TJ Max, and a recent phishing attack at Salesforce.com only highlight the current state of online security affairs. This survey examines the potential impact of DDoS, hacking, and phishing/social engineering attacks on your site and business. All respondents receive a free copy of the complete summary results! Of course, all responses will be strictly confidential. We won't disclose or identify data about any individuals or about participating companies. Watch Rick Chapman's Presentation on the SaaS Tsunami at the October 31st, 2007 Business of Software Conference in San Jose
(Click the image/link to play the WMV file. The video runs approximately an hour and five minutes. The presentation covers the factors driving SaaS acceptance, the ISOS disruption model, opportunities in SaaS for B2C, the impact of the Windows Vista launch and WGA on SaaS acceptance and more.)
Sold Out! The Premier Event for Companies Seating limited to125 attendees Keynote Speakers
Not All Revenue is Created Equal: A Guide to Understanding How Your Revenue Will be Evaluated When You Sell Your Company, Part I of II Valuation is often quoted as a multiple of annual revenue. While this is a useful metric for understanding valuation ranges, it also can be misleading. Companies of similar size in the same market may have quite different valuations based on many factors. One such factor is the composition of a company's revenue. Software companies generate revenue in many ways. Some examples include the sale of perpetual licenses, annual maintenance fees, professional services, hardware sales, subscription fees, and long term licenses. Each of these has two characteristics that are relevant to a buyers valuation model: (1) predictability/risk, and (2) profit margin. Valuation is driven up by increases in predictability (and therefore reduction in risk) and profitability (and therefore higher ROI). Without putting a valuation multiple on each type of revenue, lets examine how typical buyers look at different kinds of revenues. Hardware: Your customers may appreciate receiving a turnkey hardware/software solution, but revenue from hardware sales will typically be given little value by a software buyer because they consider hardware a commodity business. Services: The performance of services may be an important part of your solution sale and a key competitive advantage. Your services group may also be key to maintaining a tight relationship with your customers, which will pay dividends over the years. Thats a good story to tell an acquirer, but every hour of services revenue comes with an hour or more of direct cost as well. Typically, profit margins are not as high on services as on software sales,, so dont expect services revenue to be valued as highly as more profitable software sales. Licenses: The sale of software under a perpetual license has been the historical software business model. License sales can be large and very profitable. However, the sales cycle can also be long, and when large sales slip they can materially affect a companys annual financial performance. Each year the revenue bucket starts empty and needs to be filled with new sales, which may or may not materialize. Manage Your SoftGram Subscription
Your username is: [[eMail]]
|
Softletter's Marketing and Selling SaaS Seminar, 2008 The Premier Event for Those Who Need to Succeed in SaaS Sold Out! Keynote Speakers Zach Nelson, CEO, NetSuite Seminar SponsorsGold Sponsors
Performance, Agility, and Fast ROI
Silver Sponsors
Infrastructure as a Service
The SaaS Delivery Experts
THINKstrategies
From Products to Profits Media Sponsors
Accelerating Online Business Growth
Sold Out! |
(Voice) 860.663.0552, (Fax) 860.633.0553; E-mail: softgram@softletter.com