201011 acquisition and business models software industry
TRANSCRIPT
(C) Dr. Karl Popp 2010 1 http://www.drkarlpopp.com
Chances and risks of software business models during mergers and acquisitions
Dr. Karl Popp
Corporate Development
SAP AG
http://www.drkarlpopp.com
(C) Dr. Karl Popp 2010 2 http://www.drkarlpopp.com
Business Models
Type of Goods/Services offeredFinanci
alPhysical Digita
l goods
Human
Creator
Entrepreneur
Manufacturer
Inventor
n/a
Distributor
Financial trader
Wholesaler,
Retailer
Intangibles
distributor
n/a
Lessor Financial lessor
Physical lessor
Intangibleslessor
Contractor
Broker Financial broker
Physical broker
Intangibles
broker
HR broker
Based on source: Weill et al., Do Some Business Models Perform Better than Others? A Study of the 1000 Largest US Firms, MIT Center for Coordination Science Working Paper No. 226, 2005.
(C) Dr. Karl Popp 2010 3 http://www.drkarlpopp.com
Specifics of the software industry
–Software as digital good – marginal cost of production very low
–International company structures even in small companies
–Intellectual property is in the focus of all companies
–Companies use similar Business Models for intellectual property
(C) Dr. Karl Popp 2010 4 http://www.drkarlpopp.com
Chances and risks of software business models
Business Model Chances Risks
Inventor Monetizing intellectual property
Safeguarding and defending IP
Lessor Growing license revenues
Revenue does not scale
Services Growing service revenues
Cost too high, quality issues
(C) Dr. Karl Popp 2010 5 http://www.drkarlpopp.com
Management of acquisition risk
Business Model
Risks Risk Mitigation
Inventor Safeguarding and defending IP
IP Management
Lessor Revenue does not scale
Early, detailed revenue planning and revenue commitments
Services Cost too high, quality issues
Detailed planning and early implementation of scalable model for services
(C) Dr. Karl Popp 2010 6 http://www.drkarlpopp.com
Background information
Business Models in the software industry
http://www.drkarlpopp.com/BusinessModelsintheSoftwareindustry.html
Profit from Software Ecosystems
ISBN-13: 978-3842300514
Business Models, partnership models and ecosystems in the software industry
Examples from over 50 software companies