HOW ISVs CAN MINIMIZE TIME TO MARKET:
The Advantages of Partnering BY JONATHAN SHAPIRO
The metaphor of a "window of opportunity" is an especially apt one for
independent software vendors (ISVs). Market interest can often seem as unpredictable and
capricious as the pattern of opened and closed windows in the buildings along a hot city
street. And market interest is not all that an ISV is attempting to predict. There is also
the issue of getting to market early enough to avoid being "scooped," while
being sure that the product developed is broad-based and flexible, so that it doesn't
quickly become obsolete. Standards must be met, and defined, and the users' needs must be
met, all while maintaining a competitive edge.
Then there are additional considerations - financing, specific hardware requirements,
compatibility with one or more operating systems. If all of these issues are the
responsibility of a single vendor, they can often become overwhelming, drawing precious
time and resources away from the original product idea and focusing it on areas that
outside vendors might be better qualified to handle.
NEW MARKETS = SPECIAL CHALLENGES
Independent software developers in the computer telephony industry are faced with even
more special challenges. For one thing, the field is still sufficiently new that customers
require extensive education in the latest solutions. Additionally, the market is so young
that there are no big brand names--no one is going to beat down a vendor's door clamoring
for his products. But perhaps the biggest challenge is that most ISVs in the CT arena
begin less with a product than with a technology-a software solution that needs other
pieces to make it whole. With few CT consumers equipped to assemble systems from the
component level, it is up to the company to make their technology ready for the market.
Let's use the analogy of a car. Someone who invents a new motor or a better cruise
control doesn't really have a product to sell-at least not to the end user. You need the
rest of the machine, and you also need to support it, advertise it, and find a showroom to
sell it in. With a car, all those pieces are usually in place. With CT software, they
rarely are. Without a hardware platform, pre-sale consulting, installation, tech support,
and all the other necessary pieces of the package, the killer app you thought you
developed will be stillborn.
What follows is a quick checklist of issues that must be addressed in getting your
product ready for market, a look at potential problems you may encounter, and an
exploration of the advantages of partnering.
THE ROAD TO MARKET
Once your code is written and you're ready to unveil your concept to the world, you need
to assemble the infrastructure that will turn it into a product. The first piece that must
be in place is a hardware platform. A CT application requires a machine built specifically
for CT environments, with the extra cooling capabilities and fault tolerance that a
mission-critical CT system demands. But a 233MHz Pentium-based machine from Company A will
not be the same as a machine with the same specs from Company B. You need to find a source
with solid experience in the intricacies of combining voice and data, and you also need to
standardize on one or two platforms to avoid creating a tech support nightmare.
Next you need a contract manufacturer who can marry hardware and software, add the
appropriate boards and peripherals, and burn in assembled systems to be sure they're ready
for delivery. You also need installation personnel, who not only travel to the customer
site but also have the expertise to do pre-installation support such as ordering the
correct telephone lines from the local carrier.
Then there is the critical area of the sales channel. The choices here include selling
direct, developing a network of resellers and VARs, finding distributors who sell to
resellers, or creating a hybrid solution. Whatever your decision, you need to offer
pre-sale consulting services to tailor configurations to each customer's needs, plus
post-sale tech support to address installation and operation problems.
Other bases that need to be covered include training, both of the people who are going
to sell your product and those who will support it; financing, because your resellers are
going to need a means of maintaining cash flow while waiting for their customers to pay;
and marketing, to generate a demand for your product both among end users and in the sales
channel itself.
PERILS IN THE CT MARKETPLACE
For most CT startups, pulling together all these pieces of the product puzzle presents a
number of dilemmas. First and foremost, it takes time, and that commodity is scarce in
today's marketplace. With competition from other small ISVs, as well as giants like Lucent
and Cisco trying to get into the act, the window of opportunity is continually shrinking.
It is necessary to get to market quickly - otherwise, while you're sourcing the hardware,
constructing a sales channel, and rounding up the rest of the package, the window may
close completely.
Building the proper infrastructure also requires considerable financial resources and
distracts the software developer from his core competency. This is a particular problem in
the hardware arena, where securing the proper platform and then staying on top of the
technology curve is a daunting challenge. In the race to debut, the danger is that the
vendor will either never get out of the starting gate or will choke in an early lap.
THE PARTNERING ALTERNATIVE
At the dawn of the CT era, software vendors had little choice but to take these risks.
There was no critical mass of CT resources with whom to form alliances, so each company
usually was forced to go it alone. Now there is an alternative, and that is to partner
with a firm or firms with technical or sales expertise.
The benefits are considerable. Your time-to-market will be faster because you can ride
on the coattails of a partner or partners who already have what you need. Operating costs
will be lower and profits higher because you don't have to support a large infrastructure.
You spread the risk, increase your flexibility, and gain the ability to focus on your core
competency.
One common use of partnering by CT software companies involves going to outside
suppliers for hardware needs. This approach relieves the software vendor of an enormous
set of responsibilities, including the need to design a hardware platform, purchase
components, hire technicians to build the systems, burn them in, support them, and stay on
top of every change in both the hardware and non-application software inside the box.
Outsourcing these tasks to a company with the appropriate expertise enables the software
vendor to deliver a reliable hardware platform without assuming the hardware burden.
The same principle applies in seeking partners for assistance in marketing, financing,
or other areas. If you're trying to get a CT product off the ground, assess your strengths
and weaknesses, and then consider partnering with people in areas where you are lacking.
Otherwise, even the best code in the world may come to naught, and your window of
opportunity may close forever.
Jonathan Shapiro is president and founder of Alliance Systems, Inc., one of the
world's largest distributors of computer telephony products. Alliance is a leading
supplier of high-performance voice processing computers, and a leading integrator of
customized computer telephony systems including IP telephony solutions. For more
information, visit the company's Web site at www.alliancesystems.com.
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