Software Pulse

Business Strategy for Software Executives

April 17, 2006

Erik Keller

Pushing a “Pull Model”

Are you ready to give away software and fire your sales organization? It might be time to flip the current “broken” enterprise software model from a sales-oriented push to a customer-oriented pull.

By Erik Keller, Wapiti LLC

“Why do software companies need a sales force?” complained Hasso Plattner, then CEO (currently the supervisory board chairman) of SAP in the early spring of 1998. “If customers just looked things up on the Web and talked to some of our people over the phone, they would figure out that we had what they needed and that would be that.”

While this statement by Plattner is open to all sorts of interpretation, it may be the most succinct and directionally accurate statement of how the software industry needs to change in the coming years.

There is a huge consensus that the enterprise-software industry business model is broken; there is no consensus, however, on how it should be fixed. Common wisdom states that all software will be consolidated around a few mega players such as IBM, Microsoft, Oracle and SAP. But these mega players hardly represent the diversity of functional solutions, vertical and niche markets, innovation and business processes that are fulfilled by a growing base of companies. Yet most of these smaller companies struggle in today’s market.

Given this harsh reality, it is likely then that simple tweaks will not fix today’s business model problems and that a radical restructuring is required. And that radical restructuring may involve changing the metrics of corporate success so that rather than pushing products out to the market companies rethink their strategies and pull customers in.


New Software 2006 Highlights Online Now

Last week, the software industry’s best and brightest gathered at the Santa Clara Convention Center for Software 2006. Now you can see the many highlights from the event at Online this week: video of key speakers, slides from popular presenters and the Software 2006 Industry report from McKinsey & Co. and Sand Hill Group. Also check out the fast-growth companies who participated in the Software Showcase. Visit for all this – and visit each week for more new conference content.

Aligning Product Offer to Sales Model

Does it make more sense for small vendors to OEM and avoid marketing expenses? Nilofer Merchant of Rubicon shares insight on where many software marketers veer off course in this week’s post to the Blog on Sales & Marketing Best Practices.


The Power of Professional Services

A significant portion of software business revenue is derived from services businesses. Tom Esposito of the Insight Group shares advice on how to get the most from services organizations in this week’s post to the Services & Support best practices topic of the Blog.


Don’t Miss the Dispatches from Software 2006

Dozens of press, analysts and bloggers attended Software 2006 and shared their views with their readers. Read perspectives from Vinnie Mirchandani, Jeff Nolan, Tom Foremski and more in the Blog on Software 2006.


Get Must-Read Software News

Don’t miss’s weekly news summary. Every Friday, editors compile the most important software news of the week and deliver readers a quick capsule of the week’s developments. Read this week’s news summary: Big Buys - Seven major deals - including Red Hat's acquisition of JBoss - and lot of open source developments shape the week.

The Next-Generation of In-House Software Development

As the economics of software development continue to rapidly evolve, enterprises continue to weight their build-vs.-buy options. The McKinsey Quarterly takes a look at how leading edge companies are streamlining their in-house development.


SIIA Software Strategy Summit

Geoffrey Moore, Ann Winblad, Tien Tzuo, Stephen O'Leary and Russ Daniels headline the Software & Information Industry Association’s Software Strategy Summit, where you’ll learn how to leverage changes in the industry brought on by SaaS, Open Source, Offshoring, and Security. Save $200 today when you register for this important event to be held May 15-16, 2006 in San Francisco.

Poll: M&A Pace Picking Up?

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More at

HP targets SOA market.
Read the most important enterprise software industry news of the week >>

iConclude receives $9 million.
Monitor the latest software venture capital deals >>

Emptoris buys diCarta.
Size up last week's software M&A deals >>

Shinya Akamine named CEO of BlueRoads.
See who's made it to the top in our list of recent software executive appointments >>

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Parting Thought

When you innovate, you've got to be prepared for everyone telling you you're nuts. - Larry Ellison

Courtesy of Malcolm Kusher, The Kushner Group