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Strategies & Market Trends : Gorilla and King Portfolio Candidates
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To: Mike Buckley who wrote (28597)7/23/2000 4:33:13 PM
From: Thomas Mercer-Hursh  Read Replies (1) of 54805
 
Is that right that if 50% of a company's revenue comes from new customers, the customer base is being doubled?

Not at all, especially in the software biz. Even assuming maintenance revenues are stated separately, license revenues to the existing customer base are typically for additional applications or additional users for existing applications. If, for example, a company's customer spent on average $1M for a new software license and $100K per year subsequently for additional users and new applications, then a 50/50 split in revenue between new sales and existing customer sales would imply 10 existing customers per new customer.
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