Software Pulse

Business Strategy for Software Executives

October 9, 2006

Paul V. Farr

Tackling the Growth-Cost Tradeoff

Software companies need to keep growing ñ but at what cost? Smart execs focus on resource allocation and improving strategic development processes to ensure profitable growth.

By Paul V. Farr, BMC Software

Chief executives in all industries struggle to balance customer demands with investor expectations and manage tight budgets. But the software business is one of the most challenging environments in which to compete. The combination of constantly evolving products, business models and competitive landscape makes for an exciting industry ñ and lots of headaches for its corporate leaders.

There is a constant battle waged in the executive suites of todayís software companies which pits the need to grow revenue against the mandate to control costs. Managing this growth-cost tradeoff successfully involves optimizing investments in the engineering and support organizations ñ and rethinking how traditional software development processes can be re-architected to drive additional output.


New at Software Finance
A one-stop destination for the latest software stock, M&A and VC data.

The new Finance section compiles the news, data and deals which drive the software industry. Debuting this month, the Sand Hill 30 stock index charts the progress of 30 companies which best represent the new world of enterprise software and services. The M&A and venture capital sections showcase software industry trends, the most recent deals and hand-picked news on the latest partnerships. We will continue to add and revise these pages in the coming months so send us your feedback.

Questioning the Benefits of SaaS

Thereís no question that on-demand is hot. But many customers havenít explored the long-term value proposition of the model. S. Sadagopan of Satyam takes a closer look at SaaSí trends, issues and benefits in this weekís post to his Blog, The Deep End.

Back from ìNowhereî

The purpose of a vacation used to be to take a break. Most people canít, wonít or donít want to do that anymore. Erik Keller of Wapiti LLC Ýreports from the least-connected expanses of the American West on the urge to stay connected in this weekís post to his Blog, The Software Critic.

Publish Your Perspectives!

The Blog wants your opinions. Send your thoughts on the enterprise software industry to and weíll publish them in our blog.

And the Winner IsÖ

Enterprise software product of the year? The fastest-growing software companies? ìThe Next Big Thingî vendors? Find out whoís on top and read more software news of the week in the news summary.

Donít Miss: Becoming an Adaptable Corporation

To survive, organizations must execute in the present and adapt to the future. Few of them manage to do both well. Read more on executing vs. adapting and how to create an adaptive social architecture in this this article from The McKinsey Quarterly.

Poll: Who will be ìThe Next Big Thingî?

At Enterprise 2006, five contenders to be ìThe Next Big Thingî will present their companies to an audience of fellow executives and investors. Which vendor would you pick as The Next Big Thing?
Take our Pulse Poll >>

Last week, readers gave their opinions on whether Indianís Big 5 has overtaken U.S. services companies.
Give us your opinion and see the results >>

More at

The San Francisco Chronicle puts's Marc Benioff "On the Record."
Read the most important enterprise software industry news of the week >>

SpikeSource receives $24 million. Jumptap gets $22 million.
Monitor the latest software venture capital deals >>

Oracle buys Sunopsis. I-Flex acquires Mantas.
Size up last week's software M&A deals >>

Layer 7 Technologies names Ed Koepfler as president and CEO
See who's made it to the top in our list of recent software executive appointments >>

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Parting Thought

"Being powerful is like being a lady. If you have to tell people you are, you aren't."
ñMargaret Thatcher

Courtesy of Malcolm Kusher, The Kushner Group