Passing the ISV Stress Test
The economy downturn is revealing the fundamental changes in customer behavior which are taking place in the software industry. Executives must take action now in order to ensure their companies will survive to thrive in the economic recovery.
By Chris Dowse and Ben Galison, Neochange
On May 22 2009, the stock market valued the software industry at a 3.7% discount to the S&P500, based on the next-12-month price/earnings ratio. This doesn’t seem too concerning until one remembers that for the past five years, the software industry has on average been priced at a 34% premium to the S&P 500.
What could account for this dramatic difference?
While there is definitely widespread uncertainty as to the timing and size of an economic recovery, a swing of this magnitude suggests the market believes something has fundamentally changed the software industry’s future capability to generate earnings. It is an indication that the market believes a structural shift is taking place and that the outlook for the coming year is dire.
What does the smart money know? What has the economic meltdown exposed?
Read more >>
Looking for Sources of Real Differentiation
Tom Roth of Wilson Learning explains why sales executives need to look for sources of competitive differentiation at each stage of the customer lifecycle in this post to the SandHill.com Blog on software sales.
Publish Your Perspective!
SandHill.com wants your opinions. Send your thoughts on the enterprise software industry to SandHill.com editor, Maryann Jones Thompson (firstname.lastname@example.org) and have your opinions published on our site.
The Irrational Side of Change Management
Most change programs fail, but the odds of success can be greatly improved by taking into account these counterintuitive insights about how employees interpret their environment and choose to act. Read more about change management best practices in this article from The McKinsey Quarterly.
News Update: Microsoft “Bings” It
$100 million backs a new search service; plus, Google’s new Wave, Obama’s new cybersecurity czar, and M&A’s new moves. Read these stories and more software news of the week in the latest SandHill.com Software News Summary.
Poll: Pass the Stress Test?
What portion of software companies could pass an economic stress test similar to the one created for the financial industry by the U.S. government?
Take our Pulse Poll >>
Last week, readers weighed in on the importance of content marketing.
Give us your opinion and see the results >>
More at SandHill.com:
Ingres stacks up applications.
Read the most important enterprise software industry news of the week >>
Driver safety software maker GreenRoad receives $15 million.
Monitor the latest software venture capital deals >>
Intalio buys BPM and CRM companies.
Size up last week’s software M&A deals >>
Kace Networks named Gary Acord CFO.
See who’s made it to the top in our list of recent software executive appointments.
Send us your feedback on this newsletter and the SandHill.com site.
“If there were no problems, most of us would be unemployed.”
— Zig Ziglar
Courtesy of Malcolm Kusher, The Kushner Group
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