Blog, Events & Press

6 Oct

How to Maintain Momentum in a Down Market – the Success Formula

Fist Punching Through Water

SevOne's vision is to remove all limits to data collection, reporting, and affordability. The perception of limits is always changing. The way enterprises and service providers define affordability limits have changed dramatically because of market uncertainty.

Some believe that software companies have trained enterprise customers to buy software at the end of a quarter, when the best deal can be negotiated. But now, some companies can't buy anything at the end of a quarter, regardless of price and value. The market severely punishes high profile public companies that don't have predictable financial performance, especially during times of uncertainty. There are a limited number of short-term controls or levers to control financial performance. The only real lever is to cut expenses, which means postponing purchases. The levers are not very discerning. There isn't a lever to postpone only “nice to have” purchases so, “must buy” purchases can get held up too. So, a great value and a great price isn't enough. Whatever your product could save could be lost in market value if a company misses its expected financial performance.

The US market is bouncing along at few points of growth – if we drop a few points into negative growth – then it's called a recession. No real difference from where we are now, but the press will make a big deal out of the word "recession," which will hurt confidence. The US economy doesn't have any more real bubbles, so it's relatively stable. Europe is a different story. The debt load of Spain, Portugal, and Greece is unsustainable and the ECB (European Central Bank) doesn't have the tools to fix it. Their objective is to control inflation (unlike the Federal Reserve in the United States) it does not have a second objective to sustain growth and employment. Furthermore, Europe doesn't have an FDIC (Federal Deposit Insurance Corporation) – which allows a US bank to fail and be reorganized over the weekend and re-opened as a new bank on Monday. So, this is a big problem that doesn't have any easy solutions. We don't know how the European politicians will handle this, but it will be painful and it will impact the US – Contagion!

So, why aren't we panicking? We have the success formula, that even works in down and uncertain markets. Last week I had lunch with a very senior financial executive who serves on high profile public boards. He is not seeing panic in the boardrooms. He is seeing confidence. Smart CEOs are hunkering down, making difficult choices, but investing because they are confident that the market will get better. These companies will dominate as the market improves, as will SevOne.

So, how are we maintaining aggressive growth in a down market? How is SevOne becoming one of the smart investments that transcend market difficulties? Our competitors would like to know how we booked more business in Q3 than any preceding quarter. Here is the secret: To maintain momentum in a difficult market, your offering has to be an MB+E2B (Must Buy & Easy to Buy)

Providing the best price/value (best of breed) alternative is a given – being a “Must Buy.” A Must Buy has to be...

  • Tied to key services and high priority initiatives, such as a VoIP or video conferencing, mobility
  • Clearly prove how it will save money by telling them what infrastructure is needed to assure quality services
  • Easier to implement and easier to scale than alternative

Easy to buy is a different story for every customer. One way we make our offering easy to buy for everyone is by making a simple all in one offering (physical appliance, virtual appliance, or cloud delivery). So our price catalog is one page. Simple strategy; Include everything we develop in one scalable solution. Let the customer decide what they need to use or can afford to use. If they find value, they will use more and buy more as they need it.

Easy to buy also means removing artificial business limits. Today we structure our offering to closely align with the customer's appetite. One new financial customer asked us to offer what he called a convertible ELA. This way he could solve immediate problems in three areas, limiting the immediate expense, but the purchases count toward an Enterprise License Agreement, capping the total cost.

Another customer made a large, seven-figure subscription commitment in September, but in October intends to use capital budget dollars to make a seven-figure purchase. It's important to point out that this customers' initial subscription was very small. The SevOne implementation scaled organically completely controlled by the customer.

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