Yay, there we are. OK. So this talk-- so good morning. So this talk is called three opportunities you can't afford to ignore. But I think a better name for it is let's make some money. And I'm going to try to make this very short and very sweet, because you notice we did get started a few minutes late due to the traffic. And so I'm going to try to do all this in about three minutes. And that'll get us back on schedule. So how are we going to make money? Software monetization. Well, it's easy. It's really easy. It's a no-brainer. We could throw a rock in any direction, hit the buildings of the most wealthy software company in history. So it's got to be pretty easy. First you start with the cloud. You've got to have a cloud strategy. You all have a cloud strategy? OK, good. That's all you need. Then you need a social media strategy. Preferably one that uses the cloud. A mobile strategy. Now, if you can connect your mobile devices to the cloud to do social stuff, you're really cooking. Money should start flowing in at this point. Oh, yeah. Big data. Yeah. You've got to-- you know. What are you connecting to the cloud? Big data. So that means big money coming in. It's all very easy. And mapping. Well, mapping was going to be big, but let's-- not in Cupertino. No. And by the way, at breakfast this morning, they served something in the little restaurant here called the Cupertino Scramble, which I think is to fix the maps. So how do you do all this? You're going to use Agile software methodologies. You're going to use Scrum, extreme programming. Test-driven development. Any methodology you like. It really doesn't matter. And, oh yeah, and buzz words. Every buzz word you can find. Just add those into your business plan. Load balancing, client server. Downtime. Everything. Just add all that together. Oh, and you probably want some marketing. Just a little bit of marketing. Probably social media marketing through the cloud on mobile devices. And then we're done. So thank you. That's-- OK. Oh, wait a minute. I'm supposed to take up half an hour. So maybe it's not really that easy. Software models require flexibility, both on your part as the software company, and understanding and appreciating and adapting to the flexibility requirements of your customers. What that means changes. Once upon a time, buying software meant going to the local egghead store. Remember those? And you bought this slip covered box that said software on it. That's what software delivery meant, was you put in your trunk and you drove it home. That was software delivery. Flexibility today could mean-- when was last time you installed software onto a computer using any sort of removable media? I mean, I haven't in ages. So flexibility and how it's delivered, how it's licensed, all that sort of thing is required. Cost containment. Customers don't want to spend a lot of money. Thanks to companies like Google, there is an expectation that software is free. We have to demonstrate that our competitor is the price of free. And the fact that many of our customers have not budgeted, perhaps, for software. They may not even have a line item for a lot of their software that they require. Long term stability. I don't know about you, but the cost of switching software are very, very high in my organization. My company, we put out SD Times. SD Times is a print publication. It is produced with QuarkXPress. We started using QuarkXPress when we launched the company in 1999. Since then, we have switched over and started using Adobe Creative Suite, which comes with a great page layout program called InDesign. Guess what we use to put out our magazine? QuarkXPress. Because we have an art team, we have templates. It's all built and designed around that. So we pay for a Creative Suite license for Photoshop and Illustrator, and other tools, and we also pay for a Quark license. So long term stability is important. The good news is that if you get a customer, if you're loyal to them, even if your competitor's cost is free, you may keep them. The bad news is you've got to get them. Simple administration. License administration, software administration is hard. Companies don't want to do it. IT departments don't want to do it. End users do not want to call their IT departments. The IT departments, believe me, do not want to spend time doing end user support. You have to make the administration very easy, and also as much as possible self service, that let's say if a customer that does need to move a license from one user to another, or one machine to another, they want to make the administration simple. It should not be they call your phone number, talk to somebody, read off a 43 digit hex code, and are told I'm sorry, we have to handle the transaction during business hours. Because odds are they're doing the upgrades over a weekend. So the businesses, software and services that you can license and administer if you have customers, and hopefully they can also license and administer for themselves depending on their preferences. You can learn in terms of being self service from companies like Amazon and Salesforce and Google. They have driven down the price of software. They've driven up customer expectations in terms of what customers themselves can do. They want to put things in the shopping cart, they want to look at the shopping cart, they want to come back later. They want to do everything themselves. Or at least have the option to do so. Have you ever had a problem with Amazon and need tech support? Good luck with that. So my wife and I would sell some things through Amazon. We have a business it's called Castleton Books. We sell used books and things. It's kind of her, she buys books at yard sales that look like they're valuable and sells them. We had a customer that bought a book from us, didn't like it, returned it. We credited back the purchase. Somehow she didn't get the credit. On our end, it looked like she got the credit. On her end, we believe her. We talked to her on the phone. Looked like she didn't get the credit. OK. Let's try to deal with Amazon now to get this straightened out. It took weeks to get it straightened out. To get her like a $14 refund. I mean, just ridiculous. So what makes a solid software business? You're trying to help customers. This is so obvious, I don't even need to say it, but I'm going to say it anyway, because that's what I'm here for. You're going to either help customers make more money, or you're going to help customers save money. Preferably both, but we all know in reality it's very hard to do both. A particular solution either helps to make money, or helps them save money most of the time. The challenge is that a lot of the software that we are selling, that we are using is very hard to go back and directly tie it in to a here is how our software costs $10,000, here's how you're going to make at least $20,000 more. You're going to save at least $20,000 a year. It's very hard to connect those dots for anything that's simple. Even with Quark, I mean, my art director can't explain to me why spending the extra money helps SD Times make more money and save money. It actually costs us money, but it's the right thing to do for our publication. So does it helps companies make money or save money? Sounds great, it doesn't really help us. Instead, we all know we make a sale when we understand our customers' pain points. What are they having trouble with? And we know those pain points are things that distract them from their business. The better we can do at taking away the friction between them and their business, what they do, what I do is I put out a magazine. Anything that makes it easier for me to get that magazine out, I'm willing to pay money for. Even if I can't show an ROI on the dotted line for that. So what are you selling? You're not selling software. They're not going to buy ones and zeros. They've got plenty of those. What are you selling, and how does that align with your customer's expectations for what you're selling? And, or the other way around, what do your customers expect from you? And can that, and does that align with your business model? If you're selling Quark, you're selling page layout, you're selling a tool to put out a magazine. In terms of licensing, if you bring in lots of temps to try to license that, how is that going to work? Use freelancers, how does that work? I can't imagine the license backend that Quark has. It's ridiculous. And it's very inflexible, and does not fit in my business. They've done a poor job of trying to serve me. So yes you're in the software business, but no you're not in the software business. You're in the business of eliminating customer pain points. You're in the problem solving business. What customers, not what software should you make, but which customers have which problems, and how can you help them solve it? It may be with software, it may be with a website. It might be with consulting. Who knows what it is? But your goal should be to try to solve that customer's problem. And if you do a good job of solving it, or you demonstrate the promise of that, then they'll happily pay you for that. So lots of the value add. It's all about the value. And zero administration to the customer as much as possible. Zero hassles for the customer. You don't want friction. License simplicity. You're going to hear a lot about that today, so I'm not going to talk a lot about it. And this is really important. Customer benefits very early on. As much as you can. Day one if you can, but the path to having the customers realize the benefits. I mean, imagine you hand someone a box that's got a very complicated sales system. Sales management system, perhaps. It could take them weeks or months to get it configured so it actually works right with their business. That's not good. One of the things that we use, Salesforce.com within our company, one of the reasons is we derive instant value from it literally the first week. It was so easy, it took so little to get it up and running once we figured out their business model, which was a little crazy. But once we got that figured out, then our sales department has been realizing the benefits all along. So a rapid return on investment for the customer, a straightforward business proposition that maps directly to some business oriented problem that they're facing. And the business problems they're facing is that you're handling some part of something that's orthogonal to their business that they don't want to handle. And that's great. If you sell human resources management tools, for example, you might have some customers in the HR business. You also have customers who are not in the HR business, and they don't want to be in the HR business. So I'm going to talk about three particular opportunities that I think will really help you. Silos. Silos are a huge nuisance in our business, and in all of your customer's business. They have information that is stored in CRM systems. They have information that is stored in perhaps customer, in product databases. They have technical information, technical support facts, perhaps. They've got source code. They've got product branches. They've got catalogs, they've got pricing sheets. They've got their accounting systems. They've got their human resources systems. They've got their document repositories. Perhaps it's in SharePoint. Perhaps it's something else. Who knows what? They have information in silos. The better job you can do of helping companies break down the walls between silos, the better. That's something that delivers tangible value for every company. This morning I got an email, press release from a company that sells a solution that connects exchange databases, Microsoft exchange databases to iOS devices. IPhones and iPads. And what they're trying to do is replicate the RIM BlackBerry sort of experience for those mobile users, but who are connected to a corporate exchange server. And I saw this just when I left to come down here this morning, I didn't have a chance to look into it deeply. But they recognized the fact that they have a silo of information in their exchange servers. They have a tremendous wealth of information. Not just emails, but they have contacts, they have calendars, they have group planning, all sorts of things in there. But they have iPhones, which do not map completely and properly to the exchange server. They do somewhat, but they don't map completely. And so they've found a way to bridge the silo of that. We're trying to do the same thing. We're working with a consulting company right now to try to help us bridge the gap between our sales system, which is based on Salesforce, and our subscriber database, which is managed in an in house database system on SQL Server. And we haven't been able to figure out how to bridge that completely. So we have a company we're paying to come in and help us do that. To help us integrate our own homegrown system with Salesforce. And you know what? It'll be about a $35,000 contract, and it's worth it. Now that may not map to you. You guys are mainly in the software business, not in the consulting business. But the same thing applies. They found a pain point. They found pain points with us are in silos, and they're helping us bridge that. And I'm very happy to write the check to have them solve that problem. So in terms of building bridges between silos, don't make the bridges look like this, by the way. Make the bridges go straight across, and don't use any Cupertino based software at the current time. OK. The second trend I'd like to talk about is make everything self service. I mentioned that a little bit before. When people want to change licenses, when people want to add new users, they want to go as much as possible, and do that themselves. If they want to move a user from using some of the features to using all of the features, or having certain classes of privilege on the system, they want to do that as much as possible. They want the employee be able to do it as much as possible, or have an administrator do it as much as possible. Or they want the option to perhaps call you, or call your sales representative, and have you help them with it if it's complicated. So many companies I've seen make this next to impossible. They have, perhaps, the portals that are built in house for your administrators to go through and do this on behalf of the customer. But they have not made a customer facing version of that administration system that the customer can use to do some of these updates. I'm going to give a non technology example of self service. How many of you have heard of the Paradox of Choice? OK. It's a great book. It's called the Paradox of Choice. It's that the more choices you give a consumer, the more stressed out that consumer becomes, and the less likely, A, they are to actually buy something, and B, the more likely that customer is to be dissatisfied with that purchase. The author of the book used the example of going to buy a pair of blue jeans. He always wore Levi's. He wore a certain model Levi's. He went to wherever store he went to, and they had 30 different models of Levis. You know, all different numbers. And then they had Lee, and this brand, and that brand. And the guy, basically his brain froze. He was convinced he was going to buy the wrong pair of jeans. So he ended up not buying any. But if they just had the one, or just maybe had three or four, he could have quickly evaluated all the options, and he could have bought it and been happy instead of unhappy. How many people, when they look at your software, look at the different number of pricing and licensing options that you offer, and they go a little crazy? We felt that with Salesforce. Well, we can do a per user. We can do per seat. We could make it a flexible license. We can make it a named license. A non named license. We have these different packs. There's a huge business, for example, in helping companies navigate the shoals of, let's say Microsoft client access licenses. It's just, it's so confusing. Well, these users will be using SharePoint, and these guys will be using Office Online. And these people are going to be accessing the SQL Server, and these will be using Exchange. And oh, we've got these contractors. It can be crazy figuring out how to license it. There may be companies who want to buy your software, but may choose a competitor's options not because their prices are better, but because their prices are more understandable. And so in some cases, you want to have self service. So make sure the options are clear. And also, you want to make sure it's possible for them to call up and ask for help. I need to buy a pair of dress shoes for a wedding. A pair of nice, black dress shoes. My wife said I needed some new ones. So I went to Macy's. My brain froze. I had a Paradox of Choice moment. I kind of knew the style I wanted, but there were like, eight different pairs from different brands at different price ranges that all looked kind of like the way-- I was petrified I would buy the wrong ones. My wife said, I like them all. That did not help. Well, she said buy the cheapest ones. I don't want to buy the cheapest ones. She said, buy the expensive ones. I don't want to buy-- argh. I don't want to spend $400. And so you know what we did? I found a sales person. He was great. We talked for a few minutes, I told what I was going to be wearing, the suit that I had bought. And he didn't ask me, how much do I want to spend? He pointed me to a pair of Hugo Boss shoes, and says, you know, of the type of shoes you're looking at, these are our best sellers. You'll like them. I tried them on, they fit, I bought them. I didn't try any of the other ones on. Sometimes having a great sales person can help you. But you also have to have as much as possible in today's economy, a lot of self service options. But always make it possible for the customer to ask for help, and feel that the person who's helping them is truly helping them. If the guy had led by saying, how much do you want to spend, I don't think I would have trusted him. Another important trend, or opportunities is to help companies move expenses from capital to operational. I would much rather pay a monthly bill or a fee for a lot of things than to buy an expensive solution. That's one of the reasons I like flexible licensing. That's the reason I like pay by the month, pay by the user. That's why I like the client access license model. Because as my company grows, and as it contracts at times, or people move from projects, I can adjust, and I can budget for it out of my operational costs. It's hard. I'm not talking just about cloud here. I'm not talking about virtualization here. I'm talking about just in general, the more you can make fees, and be flexible. Work with your customers. I'll tell you, there was another situation. We were licensing software. It was currently a monthly license fee. There's a new solution we're licensing for our company. And then they have a monthly charge. And I said to my IT guy who's doing the negotiation. I said, ask them if we can license it for a year at a time. I know I'm going to want it for a year. And this is not a per user. This is just an annual cost. And if we can license it for a year, will he give me the year if I pay up front for 10 months' worth of license cost? Because I've always got to haggle. They didn't offer the option of an annual license. It was more give us your credit card number, we ding you every month. And I was like, I want to pay now because I want to get it all in 2012. They didn't offer that. Forget about the discount. They didn't even offer it. So it did not make me happy. So we went with the monthly license, but I'm not happy about it. Listen to your customers. Be flexible. There are some customers who are always going to want to negotiate. Make sure that you're willing to negotiate. Because people, it doesn't matter what the price is. They're not going to pay full price. And make sure that your licensing and your sale systems accommodate that. I remember one time, my wife went to a little store to buy a half sandwich. And they wouldn't sell her a half sandwich because there's no button on the cash register for half a sandwich. You don't want to be in that situation. Make sure that the software sales system you have, licensing system will accommodate your customer's needs. And help them move from a capital expense to an operational expense. A bonus one, I promised three, but I have four. Bring your own device. BYOD is the way of the future. How many of you here have iPhones? How many of you have Android devices? How many of you have BlackBerrys? There's always a few. OK. How many have a feature phone, not a smartphone? Not in this crowd. OK. People, when it comes to the tablets, when it comes to phones, when it comes to whatever, people are going to be bringing their own devices. And if you can help your customers accommodate that, look at this as being a breaking down the silo sort of thing, perhaps. But if you can help your customers accommodate that quickly and easily and securely, they will love you for it. They will really love and respect you for it. So to recap, make lots of money. Sound good? All right. Thank you. We're [INAUDIBLE] a product. and I [? blogged ?] last week so, I think my job's done for the week. For the rest of the career. By the way, [? Allen, ?] the other part, if you need some shoe shopping advice, I know a couple of people in this room who are really good at it. Plus, I say forget Macy's, go to Nordstrom.com.
SD Times' Alan Zeichick presents "Three Opportunities You Can't Afford to Ignore" at LicensingLive!
In his keynote at LicensingLive, Alan Zeichick shares three software monetization opportunities that you can't afford to ignore. Alan is the Editorial Director of BZ Media's SD Times. Successful software models require flexibility, cost-containment, and long-term stability. Get ahead in 2013 with these key monetization recommendations from Alan.