BUSA580 Kenneth Johnson, Dmitry Makhotko, Frances Skeete, Cathie Gillette, Kjetil Storaker

1. BUSA580 Kenneth Johnson, Dmitry Makhotko, Frances Skeete, Cathie Gillette, Kjetil Storaker

2. Agenda • Market Assessment • Solution Possibilities • Product definition • Product features/benefits • Competitive advantage • Distribution • Partners • Revenue • Technical goals • Recommendations

3. New Business Concept • Network discovery tool capable of gathering information on: • Hardware (includes desktop, server, and mobile devices) configurations; and • Software licensing information • Solving information gathering requirements for corporate and governmental networks of any size • Supports the systematic detection and inventory of any device on the network

4. Conceptual Architecture

5. Market Assessment • Rivalry • Indirect rivals – others in the business but either platform specific or integrated for specific software manufacturers • Substitutes • Nothing direct unless a network is entirely Microsoft products. • No one product that covers all platforms. • New Entrants • Very few barriers to entry – startup costs, labor, design, marketing • NCMX has very little head start on any direct competition • Buyer Power • May already have a manual or electronic system in place • NCMX is looking to break into the market • Supplier Power • Hardware and device manufacturers • Broad and potentially harmful affects

6. Business Trends: Drive Costs Down, Boost Innovation, Manage Risk TOP-TEN BUSINESS TRENDS, 2003 Ranking Average weighted score (10 = max) 1 2 3 4 5 6 7 8 9 10 2002 2003 2001 Costs/budget pressures 1 1 1 Data security concerns  4 2 4  Faster innovation 5 3 6  - 4 Business risk management -  3 5 3 Single view of customer 2 6 8 Stakeholder pressure - 7 - Greater transparency of reporting 6 8 5 E-enabled business/government 8 9 10 Growing value of knowledge capital - 10 - Personal data privacy concerns   Selected change in ranking compared with 2002

7. Top Management Priorities: Provide Executive Leadership, Demonstrate Value TOP-TEN CIO MANAGEMENT PRIORITIES, 2003 Ranking Average weighted score (10 = max) Forecast 2006 2003 2002 2001 1 2 3 4 5 6 7 8 9 10 Providing guidance for the board/executive 1 2 3 1 Demonstrating business value of IS/IT 2 3 5 2 Improving IT governance 3 - - 12 Reducing total IT costs 4 5 11 6 Develop/enhancing IT architectures  5 8 6 8  6 Strategizing for IS/business linkage 1 1 3 Strengthening program/project prioritizationand management 7 6 7 15 8  4 9 5 Developing leadership in IS senior team 9 - - 4 Managing benefits realization 10 7 - 9 Tightening security / privacy safeguards   Selected change in ranking compared with 2002

8. Top Technology Priorities: Secure and Integrated Technology TOP-TEN TECHNOLOGY PRIORITIES, 2003 Ranking Forecast 2006 Average weighted score (10 = max) 2003 2002 2001 1 2 3 4 5 6 7 8 9 10 1 2 1 1 Security enhancement tools Applications integration/middleware/ messaging 3 5 9 2  7 8 12 3 Enterprise portal deployment 5 3 17 4 Network infrastructure/management tools 6 1 13 5 Internal e-enabling infrastructure Web design, development and content management tools 2 - 14 6   Storage management (SAN, NAS) deployment 11 - 18 7 Customer Relationship Management (CRM) 9 6 6 8 - - 2 9 Web services – internal or external Deploying XML based processes/ messaging 12 12 8 10   Selected change in ranking compared with 2002

9. Top-ten 2003 CIO Management Priorities Details 0% 20% 40% 60% 80% 100% 1 Very High Impact 3 Somewhat Low Impact 2 Somewhat High Impact 4 Very Low Impact Forecast 2006 Ranking in previous surveys TOP-TEN CIO MANAGEMENT PRIORITIES, 2003 2003 2002 2001 Providing leadership and guidance for the board/executive 1 2 3 1 2 3 5 2 Demonstrating business value of IS/IT 3 - Improving IT governance - 12 4 Reducing total IT costs 5 11 6  5 8 Develop/enhancing IT architectures 6 8 Strategizing for IS/business linkage  6 1 1 3 Strengthening program/project prioritization and management 7 6 7 15 Developing leadership and behavioral competencies in the IS senior management team 8  4 9 5 Managing benefits realization 9 - - 4 Tightening security and privacy safeguards 10 7 - 9   Selected change in ranking compared with 2002

10. Strengths • Asset management tool • Tool facilitates planning for server capacity, application rollouts, device upgrades, and network capacity • Easy to understand reporting capabilities • Reduces total cost of ownership (hardware / software) • Potential management team • Design for easy installation • Scaleable • Multi-platform, including mobile devices • Utilize fourth generation programming language - XML

11. Weaknesses • Security of data if leaves enterprise • Lack working capital • No workforce • Scope creep • Product can be easily copied

12. Opportunities • First mover advantage • Establish distribution channels • Build barrier to entry through switching cost • Became standard • Products projected ease of use • Increase company efficiency • Reduce inventory hours • Help to expose unused software and eliminate fees • Update company software in time

13. Opportunities • Unlimited potential • Applicable to every industry • Scaleable • Assist CIOs in meeting their goals • Show value of IT • Reduce IT costs • Be a strategic partner within their organization • Centralize software license management of geographically distributed network with minimal IT staff

14. Opportunities • Current methods are not reliable or there isn’t an answer to all asset tracking problems • Accurate info can take a lot of time • Many fee structures available

15. Threats • Other competition with deeper pockets already exists. For example, Tivoli Distribution 4.0 and Inventory 4.0 – Agent (< 2MB) per client • Tivoli has relationship with Dell and Intel - machines are shipped with agent installed • Large corporate customers will want enterprise license – fixed cost • Existing products deliver extensive, flexible reporting - need to bring more value than just flexible reporting

16. Threats • OS Constraints – large enterprises may have 10+ functioning OS (Windows 95, 98, 2000; NT; XP; Solaris 2.6, 8, 9; HP-UX, etc) • Server based environments typically have many resident tools: database and file management, application queue management, etc this tool must function without impacting those tools • Network Constraints – impact of pushing updates (>130MB) difficult

17. Threats • Existing competition • Microsoft • MSIN – only for MS products • SMS – tracks MS, Winzip, Acrobat, etc. ,but not UNIX products • Takes a lot of time to set-up, but easy to use once implemented • Sits on SQL server • Very expensive

18. Existing Competition

19. Existing Competition

20. Product Definition • Network discovery tool • Monitor, collect and update data • Hardware profiles • Software installed on nodes • Update of software • Track mobile devices • Gives user the ability to “see” license compliance • Reports desired data in actionable format understandable to the average person

21. Features & Benefits • Cross platform functionality • Networks consisting of various OS and configurations • Use of XML standard • Simplified installation process • Engine resides on server • User interfaces only on select nodes • Customizable reporting tools

22. Evolutionary stage • Birth • Work with customers and suppliers to define value proposition for them • Protect your ideas • Tie up critical lead customers • Establish channels of distribution

23. Applications • CIO • Track network assets – hardware and software • Address cost/budget pressures • Demonstrate business value • Provide technical leadership and guidance for the board/executive team • Data security • Improve governance and reduce costs • CFO • Budgets • Review and forecast with more detail • CEO • Through visual means – be able to better understand the business value of IS/IT

24. Competitive Advantage • Technology would work across platforms • Any Hardware: HP, Sun, IBM, Compaq, Dell, etc. • Any OS: Windows, HP-UX, Solaris, etc. • Any Database: Oracle, Sybase, SQL, etc. • Any Device: Cell Phones, Hand-Held PCs, etc. • No installation on nodes necessary • Flexible pricing structure • Scaleable • Management tool that allows to obtain specific reports for different goals

25. Competitive Landscape • SMS, Tivoli, Xassets, Gasp 6, Bentley • Concentrations on single platforms or proprietary software • Developers are integrating software metering into product offerings • No universal, cross platform network discovery tool

26. Development Requirements • Technology • Determine how to address security concerns • Personnel • Should be able to easily translate business need to technical parameters • Familiar with various environments / platforms • Have the support staff to implement • External • Establish feeling of trust, so suppliers want to build long-term relationship

27. Distribution Strategy • Partners • ASPs • Software manufacturers • Integrators • Direct • Off the shelf version - retail • Seek out clients – sales staff • Utilize endorsement from software organization • FAST (U.K.) • BSA (Business Software Alliance – worldwide) • CAAST (Canada)

28. Marketing Strategies • Strategy & execution • Trial versions • Free or reduced cost • Build in expiration • Advertise in industry specific magazines and trade journals • Narrow scope - try to reach the right people • Conventions - conferences • Software, hardware and industry conventions • Sponsor PLU MBA student to do further market research – produce conference or white paper

29. Partners • ASPs • Bundle NCMX with other software packages • Software manufacturers • Integrate NCMX technology into existing or future version of software products • Integrators • Monitor disparate networks • Technology supplies superior accountability of assets

30. Direct Channel (FAST) • FAST (Federation Against Software Theft) • NCMX partner • FAST has a similar role to the BSA in the United States and will recommend NCMX exclusively to all its member companies (over 2,300) • This will make marketing NCMX’ services in the United Kingdom much easier • Over 2,300 companies will have been recommended NCMX by FAST and are therefore very likely to utilize choose NCMX when software auditing, updating, installing and downloading is necessary

31. Direct Channel (FAST) • FAST is based in London, England • Provides consulting services for business customers • Both for profit and not-for profit • The company has several well-known customers, such as Vodafone, BP, BT, Lloyds of London, etc… • NCMX will go into partnership with FAST, and FAST will get 15-40% of the sale of NCMX’ products, depending on what FAST did to produce the sale • FAST is NCMX’ main strategy in the United Kingdom (UK) market

32. Direct Channel (FAST) • Profit margins are higher in the UK • mainly due to lower competition • However, marketing costs are also higher in the UK • Support & Staff costs are considerably higher in the UK than the US • more infrastructure is necessary to produce a sale

33. Revenue Models • Direct sales • Setup fees – installation and configuration • Subscription license fee per user interface modules (monthly, yearly) • Lease – annual fee based on users and/or the size of the network (number of nodes) • One time licensing fee – no reoccurring fees • Sell it out right - package • Partner sales • Flat fee per installation of integrated XML engine / interrogation tool by partner • License fee per user interface installation for client use

34. Revenue Model - Direct • Discover potential clients current costs of software management – if any • Calculate revenue potential using various models • Deduce how long it will take to reach breakeven or acceptable compensation point • Trade off setup fees for long term contract Use NPV to discover feasibility, breakeven and contract length needed • NCMX would have the option to pursue or break off the relationship before costs get to large

35. Success Metrices • Six Month Goals • Solution designed and functional testing completed • Working Prototype September 2003 • BETA testing completed, product revisions completed • Referral/recommendation secured from FAST November 2003 • General availability release December 2003 Twelve Month Goals • Solution deployed successfully on six enterprises • Additional referral/recommendation secured from BSA (or other software piracy organizations) • Client ROI data available August 2004 • Cost savings • Asset management control

36. 2003 Timeline Business Plan Secure partners ”official” recommendation Beta Test Jun July Sep Oct Nov Dec Funding Initial Design / Development Prototype Funding 2nd Round Marketing Launch

37. Recommendations • Concentrate on the partner channel unless an endorsement by software federation • Browser based user interface • Ensure ability of technology to be integrated by software developers (partners) • Extremely flexible pricing options • Off the shelf version – free or limited trial version • Don’t overlook hardware asset tracking • Educate potential clients – don’t try to sell them • Use real life studies and examples (ROI) showing how software and hardware asset tracking can save users money and make developers money

38. Recommendations • Concentrate on building user base • Innovators and early adopters • Partner with hardware manufacturers • Target senior management on direct sales • Build customer support mechanisms • Alliances with partners, integrators, consultants • Internal system • Reporting compatibility with installed office software • Wizard based reporting tool • Well thought out data retrieval schedule

39. Recommendations • Obtain Beta clients and ensure their feedback is evaluated and used to drive product improvements • Offer a wide range of reporting possibilities • Products already present in the market…Product must be better (easier to use / install / pull data), cheaper, and demonstrate compelling value • Build relationships with mobile device companies • Technology must support and function with no impact on various OS’

40. Security Recommendations • Security of transactions (Channel security) • Standardized • Keep XML schema secret • Encryption • SSL (Secure Sockets Layer) • Security for mobile devices (Content security) • No standard • Encryption • Antivirus • Server security • Identification numbers on agents • Separate segments of server for each network • No interference • No access

41. Recommendations - Exit • Sell • Sell • IPO • Sell • Build and Expand • Sell • Adopt “sell” milestones • Number of users • Sales value

42. Possible Alliances • Business Partners • System integrators • Software providers • ASPs • Technology Partners • Search out complimentary technologies • Network management systems (NMS) • Operations support systems (OSS) • Hardware manufacturers • Platform Partners • Operating systems • Databases • Service Affiliates • Implementation consultants • Educate consulting firms on the product and its capabilities

43. Selected References • www.xassets.com • KPMG, Cost saving realization – managing you r assets, http://www.xassets.com/docs/kpmg.pdf, report to UK Plc, 2001. • Romeo, J., Keeping Tabs on Software Yields Efficiency and Savings, Engineering News-Record, volume 249, Issue 24, 2002. • Hoffman, T., Report: Asset-Tracking Troubles Cost Plenty, Computerworld, volume 36, Issue 25, 2002 • James F. Moore Predators and prey: A new ecology of competition • Content security at hand – Handheld device security http://www.f-secure.com/products/white-papers/hhsecurity021122.pdf • Interview Guruprasad Joshi - June 6, 2003 • Drive Enterprise Effectiveness: The 2003 CIO Agenda – presented by Gartner • Vendors With Existing Products: • http://www.on.com/ • http://www.novell.com/products/zenworks/handhelds/ • http://www.synchrologic.com/ • http://www.novell.com/products/zenworks/handhelds/ • http://www.novadigm.com/ • http://www.starremote.com/start.htm • http://www.wavelink.com/ • http://www.xcellenet.com/

44. Questions ?