Over recent years we have seen a tremendous tech evolution. We now have the power and capabilities to develop software and services in a much smarter and faster way - thanks to cloud providers like Amazon AWS, Microsoft Azure and Google Cloud. Today I discuss the customer and supplier side of buying and selling software. 

In the ideation phase of Occtoo, the primary objective was to solve our customer challenges, and the technology had a vital role to play. We were, and still are, determined to challenge the old and more traditional way of buying software, i.e signing a long contract and commit to a 100K-500K Euro project. 

The opportunity we have identified with Occtoo is to unify all experience data and make it instantly available from one single source, for marketing/business teams. This structure enables teams to launch new customer experiences faster, and access the multi-channel data in real-time - making the offering highly relevant and with zero friction in the customer experience. This means digital officers and marketers can create business value both from increasing efficiency and driving customer loyalty and revenue.

Today I want to focus on the customer and supplier side of buying and selling software. 

The companies we talk to fall into two catagories: visionaries or laggards. The visionaries have embraced technology as part of their core business and the laggards are still trying to figure it all out. Visionary companies have understood the need to recruit digital leadership that can connect technology with the business objectives. The Laggards believe they have a superior product or service and the current business model will serve their customer forever. We have seen leading companies disappear but also companies bounce back. Take Microsoft as an example. The company was for many years bashed by the market, but they reinvented themselves with new leadership (Satya Nadella joined in February 2014) that opened up the organisation and launched new business models. And boy did it paid off! Their revenue increase has been very strong from 2015, and as for their share price during the same period, well congratulations to all shareholders. 

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Microsoft is a great example of a company that started to listen to their customers and adjusted their offering to match the customer expectations. They transformed from a company shipping software on floppy discs to a business-resilient modern technology company with multiple revenue streams. An impressive comeback. 

So, what do companies look for when buying software? First we need to understand that the objective always serves to increase revenue, reduce cost or increase speed in execution. Beyond that, the companies we have talked to want: 

  • Software they can grow with 
  • Short agreements (if they can get commercial benefits they can be open to longer ones) 
  • Software they can test and launch fast 
  • Cost that is predictable 
  • Software that allows them to be smarter than the competition 
  • Software that empowers their team members to be more independent 

How do other software companies stack up against this? When gathering research for this blog post, I found an article on the topic in Forbes and in general terms - software is on the right path, but available solutions are often too complicated. Suppliers continue to require perpetual licenses or even worse, they put lipstick on their software by claiming it to be a SaaS (Software-as-a-Service) and offer a subscription-based model that is not supported by the actual product. The last part is unfortunately very common and actually jeopardizes the trust for the whole software industry.

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Going back to the example with Microsoft. Not only have they reinvented their own business but they have also provided a foundation for companies like Occtoo to innovate and create new solutions. At Occtoo we were able to launch our product very fast using the Azure cloud and best-in-class capabilities. It's also worth mentioning that we have over 15 years of software experience which made the fast launch possible.

How should software companies monetize? How you charge, or how you buy software is not simple to navigate. When asking customers about their preference you get different answers. As Sonja Kotrotsos, from Contentstack, mentions in the above article, the outcome-based pricing model is difficult for customers to keep on top of their budgets. It sounds great but creates unnecessary friction between customer and software vendor. The foundation for a great monetization model is transparency and collaboration between the customer and software vendor. A successful and long-term relationship is needed to create a win-win situation.  

At Occtoo we will continue to challenge ourselves and embrace constructive feedback on how we can better align our monetization with our customers business opportunities and challenges.

One thing is for sure -You need to continue to reinvent yourself.

Please reach out to me at niclas.mollin@occtoo.com if you want to discuss this topic further or connect with me on Linkedin

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