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Technology Stocks : Base Ten (Basea)
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To: John S. Baker who wrote (59)5/7/1998 10:30:00 AM
From: Rick Bullotta  Read Replies (2) of 152
 
Certainly. An "indirect implementation channel" is a network of qualified systems integrators that are capable of implementing Base Ten's products. Ideally, the companies selected also have a sales capability and can become an incremental revenue generator to BaseTen in addition to being a mechanism for system implementation.

One of the biggest problems with many "software" companies is that they become too involved in the implementations with lots of customization, which leads to a couple of significant problems:

1. The vendor becomes "bandwidth limited", where revenue growth is limited by the size and availability of their in-house implementation staff. Sales people tend to get caught up in hand-holding of existing business rather than generating new business.

2. Revenues are delayed/deferred as it becomes no longer a "product" sale but a "project" sale.

3. Risk is increased for the same reasons as #2.

4. Support costs rise due to the customizations done to the product on each project, and the product really never becomes "shrink wrapped".

5. Margin is generally less than a "product" software company.

This is not unique to Base Ten, but systemic of many complex software products. Yet, biting the bullet and establishing this "indirect channel" is the key to a breakout to significantly higher revenues and profits.

Hope this helps. I'll send them a bill for consulting...<g>
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