Chapter eleven

In this chapter, the author told that today’s business is not business as usual. Thus, there are some initiatives for the sellers. First, the sellers should cut the expense base by 20 to 40 percent because many technology companies would never become profitable in the new spending environment unless they change the way they manage their business. This requires an operational focus and skill set that many companies today do not have. Second, the sellers should change selling and support models. The successful technology business model of the future will be oriented toward services and subscription revenue. Third, the sellers should focus on a small target market and plan to be acquired. The vendor landscape of the future would be dotted with a few large companies and many small vendors with revenues no greater than $500 million, most under $100 million. Finally, the sellers should emulate consumer technology sales and support models. To decrease costs, vendors will need to standardize offerings, minimize expensive customization, and make their technology easy to use and install. The buyers also changed because they paid more attentions for making cuts. For example, they explore ways to set up their development abroad and hope to cut as much as 40 percent of their total R&D costs. They also have little operational focus and overspend on technology, buildings, furniture, and benefits. They also can have the Web-based service and support programs to help many companies improve their cost structures. For those suggestions, I feel that whoever the buyers or the sellers have to change their business models and consider what IT projects companies or what innovation companies should maintain for their success. If the technological organizations are not considering shifting their markets, there needs to be a balance between buyers and sellers.