Over the past years we have seen a tremendous tech evolution. We can develop software and services in a much smarter way. Thanks to cloud providers like Amazon AWS, Microsoft Azure and Google Cloud we have power and capabilities at our fingertips to develop software very fast.

In the ideation phase of Occtoo the primary objective was of course to solve our customer challenges, but the technology part had an important 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 enables them to launch new customer experiences faster and make the data accessible in real-time in any  channel to become relevant everywhere and create zero friction in the customer experience. This way digital officers and marketers can create business value both from increasing efficiency and driving customer loyalty and revenue. But today I want to focus on the customer and supplier side of buying and selling software. 

Companies we talk to are either more or less 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 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 reinvented themselves with new leadership (Satya Nadella joined in February 2014) that opened up the company and launched new business models. And it paid off. Their revenue increase has been very strong from 2015, and their share price during the same period, well congratulations to all shareholders. 

Zoom: 
3M 
YTD 
20Y 
All 
200 
150 
100 
50 
2010 
2012 
2014 
2016 
2018 
2020

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 have 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 does companies look for when buying software? First we need to understand that it always derive from an objective 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 try and launch fast 
  • Cost that is predictable 
  • Software that allows them to be smarter than competition 
  • Software that empowers their team members to be more independent 

How does the 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 - we are on the right way, but it is still 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 jeopardize the trust for the whole software industry.

TO What Extent are You usi ng the Following Monetization Models? 
Of Re sponses 
Perpetu a 
Subscription 
u sage •B 
Software monetization models differ in four key ways. 
Outcome O r 
FL_zxERA

Going back to the example with Microsoft. Not only have they reinvented their own business but they have also provided a foundation that companies like Occtoo can use 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. Worth mentioning is that we have over 15 years of software experience that made the fast launch possible. The monetization - how you charge for, or how you buy, software is not super easy to manage. When asking customers about their preference you get different answers. As Sonja Kotrotsos from Contentstack mention in above article the outcome based is hard to predict for the customer. It sounds great but create 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 need to create a win-win situation.  

At Occtoo we will continue to challenge our selves 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

Subscribe to our newsletter Fast Forward!

Every month we produce stories like the one you just read and source the best CX insights. Subscribe for free today and always be on top of your CX game.

More Like This