Blog Yes & Know

Mark Kvamme, one of the true blue-bloods of Silicon Valley, recently shared his take on what will fuel the next wave of technology innovations. Mark, as some of you might know is the former CEO of CKS, and is a current partner at Sequoia Capital, focusing on the same markets as Rubicon, the Software and Services space.
His premise is this: content will drive the next wave of technology innovation, because organizations fail to access 90% of the content in their organization.

Mark Kvamme, one of the true blue-bloods of Silicon Valley, recently shared his take on what will fuel the next wave of technology innovations. Mark, as some of you might know is the former CEO of CKS, and is a current partner at Sequoia Capital, focusing on the same markets as Rubicon, the Software and Services space.
His premise is this: content will drive the next wave of technology innovation, because organizations fail to access 90% of the content in their organization.

Microsoft just announced changes intended to reconcile new technology and old licensing models, effective December 1. Microsoft will now calculate the cost of server software products by the number of running instances of that product on any given server, rather than the number of physical processors contained in that server.

While vendors are trying to move customers to term licensing (subscriptions), enterprise customers continue to sing the praises of concurrency due to its cost savings and easier management. According to research by Macrovision, subscriptions or term licensing will be offered by a majority of software vendors for the first time in 2006. By 2007, the forecast is that fully two-thirds of software vendors will offer term licensing even though 57% of enterprises prefer perpetual licensing. Moreover, by better than 2-to-1, enterprises see concurrent licensing as preferred over seat-based licensing. Concurrency is the only licensing model to see an increase in customer preference during the past year, so we are already looking forward to the hallway conversations next year.
In the longer term, utility pricing looks to address the needs of both software vendors and enterprises, but utility pricing is clearly not ready for prime time yet.

Given the constant squeeze on end-user prices, increased channel competition, and investor demands for steady–if not increasing–earnings, it is hard to believe that many high-tech companies have an untapped source of additional profits on current business.
In a recent worldwide channel economics study, Rubicon studied industry giants like Microsoft, Symantec, Apple and Macromedia, as well as their top channel partners, and found that each vendor, in their own way, was leaving money–profits–on the table. Neither the channel nor the vendor was using their channel investments optimally to bring products to market. The Rubicon study found that the investments many companies make in the channel do not prevent loss of mindshare or improve returns. Most importantly, the study revealed that channel economics are changing in ways that challenge conventional wisdom.

Nilofer Merchant will be speaking at SoftSummit on October 11 as part of a panel on Innovation. Learn more. Nilofer Merchant’s article on Value Innovation is a featured in the …