Software Pulse

Business Strategy for Software Executives

September 6, 2005

Robert O'Connor

The Secret to Saas Success

A finance-centered Saas transition strategy is the best way for software vendors to meet customer needs satisfy regulatory demands and achieve a competitive advantage.

By Robert O’Connor, Softrax Corporation

Innovation is still the key to growth in the high tech business, but it has broader implications than in the past. Today some of the most important innovations are about the business model—how technology is being sold and delivered.

In fact, nearly 80 percent of software CEOs surveyed at the Enterprise 2005 conference stated that business model innovation is equal to or more important than technological innovation to business success today. Software as a service (Saas), on demand, hosted, and subscription models are all reshaping key customer relationships for high tech companies.

In the long run, these new models smooth out the revenue curve for vendors. But the transition can be tough. Many strategies — sales, marketing and development, for example - must be in place in order to execute the transition successfully.

The most important operational issues by far occur in the finance department. Billing, renewals, cash flow, and revenue management practices must change dramatically from the traditional product licensing days in order to ensure success.


Katrina’s Economic Wake

Our heart goes out to the people of the Gulf Coast. (If you haven’t had time, please visit the American Red Cross to see how you can help.)

While the hurricane’s impact on humanity is incalculable, estimates of the economic impact are emerging. Bill McNee of Saugatuck Technology analyzes how Katrina’s hit on the overall economy will impact the IT sector.

Understanding IT’s Value-Add

The 2006 IT budget process is beginning. A new analysis from Alinean’s CEO Tom Pisello looks closely at the findings of a new IDC study which measures the strategic value of IT investments. Get the latest insights and statistics in this post to a new Blog, Technology Market Outlook.

Optimize Your Application Development

How much time do your developers spend doing support? Yochi Slonim, CEO of Identity Software argues that it is time for a paradigm shift in application problem resolution in the new Blog on Best Practices: Service and Support.

Share your insight on the software business. Email with your submissions to the Blog.

Poll: Growing Use of Outsourcing

A new study shows one-third of technology companies plan to increase outsourcing next year. How does your company plan to change its outsourcing activity next year?
Take our Pulse Poll >>

Last week, visitors gave their opinions on whether technology innovation or business model innovation is more important to software companies today. Click here to give your opinion and see the perspective of visitors.
Give your opinion and see the perspective of visitors >>

Get a New Gig

A new crop of software executive searches from executive recruiter Sterling Hoffman is available on the job page. receives visits from tens of thousands of veteran software executives every week. Post your job on the site and reach the Web’s most qualified pool of candidates. Visit the community page and click on &8216;Want to Post a Job?’

Room to Read Opens 2,000th Library

Former Microsoft executive John Wood founded the non-profit, Room to Read, in order to provide educational opportunities to children in the developing world. The organization was recognized at Software 2004 (see John Wood’s passionate speech). Sand Hill Group congratulates the organization on the opening of its 2,000th bilingual library in Cambodia. Find out more about John in our Software Personality profile and learn what you can do to get involved.

More at

Read the most important enterprise software industry news of the week >>

Monitor the latest software venture capital deals >>

Size up last week's software M&A deals >>

See who’s made it to the top in our list of recent software executive appointments >>

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Parting Thought

"What gets measured gets done; what gets rewarded gets done repeatedly."
- Barcy C. Fox

Courtesy of Malcolm Kusher, The Kushner Group