Precise Software Solutions

Brief description:-
About Precise Software Solutions
Precise Software Solutions primarily located in Westwood, Massachusetts,
Precise developed software helped its clients to monitor, evaluate and
manage the performance of their information technology (IT) systems. In
2000, the market for “performance management and availability” software
was a small but growing one. Precise had thus far focused on a specific
niche of this market. The bulk of its revenues had come from products
managing the performance of Oracle database applications.
 Founded in November 1990.
 Precise had focused most of its efforts on a small set of products
 Maintained a single sales force centric towards DBA
 Precis/SQL is the star product

Industry testimonials
Due to the close interdependence between the Precise Software
application and the database.
Precise/SQL had a significant impact on the performance of the application
as well. Precise/SQL also gave the DBA an impartial evaluation of her
performance.
Example, there were complaints about system performance, the DBA could
point to Precise/SQL as proof that the database was not to blame.

Precise/SQL
In 1996, Precise introduced its first product into the performance
management market called Precise/SQL.
This software product was designed to manage the performance of
applications utilizing Oracle databases. By 1999, this single offering had
expanded into a suite of performance management tools for Oracle
databases and other software applications. With these products, Precise
had built a strong reputation as a developer of high quality products that
delivered what they promised.
Precise/SQL remained the company’s core offering. In 1999, revenues
from Precise/SQL accounted for 86% of all of Precises’ software
licensing fees.
Key features:-
 Precise/SQL was being developed, most of the Oracle-based
applications at which the product was targeted were developed either
by in-house IT groups or by contract developers building proprietary
applications for a firm’s own use.
 Precise/SQL was targeted at the users of these applications with the
promise of finding and fixing underlying problems.
 The three main benefits to these clients was found to be

 savings associated with DBA productivity

 savings due to the deferral of hardware upgrades
 Savings in end user productivity.

Current market scenario

Precise/SQL and Precise/Interpoint faced direct competition from Quest, BMC
and, to a lesser extent, Oracle itself. However, as of 1999, none of these
companies offered an end-to-end solution.
By moving quickly and being first to market, Alon felt that Precise Software
Solution could establish itself as the company in the end-to-end performance
management space.
Challenges introducing Insight at Open world 2000:-
As agreed, Alon, Nye, Ratner and Campbell met for an early breakfast to
discuss whether to launch the insight in open world, with lots of pointers to
validate on
 There are roughly three pointers which needed to be touched
 With inclusion of alpha test time, beta test time, should precise race
against time
 fully-functional product or basic product
 existing sales force or setting up of team insight salesforce
 addressing to sales complexity problem
 price to be setup of insight
While addressing to these pointers the points which the management team
are also aware are as follows
 right platform to showcase as an uber emerging player in open world
 right time and place to set up benchmark in the right space
 high call of reputation at stake

What should precise strategy be for insight? Should they launch a

separate sale force for the new product or sell it through their existing
sales force? How good is their current salesforce?
 Although they are successful in varied products but the sole torch bearer of
Precise software’s is Precise/SQL
 High chances of fluctuating outcomes and fragile funnels by sales
people
 As the majority revenue is driven by Precise/SQL so the sales rep are
mostly in sync with the DBAs, in either way its boon or bane as well,
as for insight as a product and budgeting is concerned the discussion
and approval will be done by CTO,CIO and in charges
 Sales rep will have a hard way in reaching out to concerned persons
  Sales rep will not be able to justify the new launch, as existing workforce is
comfortable with Precise/SQL
 Allocating right approach, time and effort with POCs will be more
aggressive and successful with small and deliberately calibrated team with
expert on Insight as a product.

How should Insight be priced? Develop an ROI model for Precise/SQL

product.
ROI MODEL

ROI for Precise/SQL

Savings from DBA
DBA’s work hour per week 40
Total worked hours per year (40 hours X 52 weeks) 2080
Average Salary of DBA $60,000
Salary per hour (60,000/2080) $28.85
DBA’s saved hours 9.4
Total hours saved per year (9.4 hours X 52 weeks) 488.8
Savings per DBA (488.8 X 28.85) $14,102
Number of DBA's 10
Total savings for DBA (1) $1,41,019
User Savings
Salary of the end user (x) 30000
Employee burden rate (y) 33%
Improvement in End user time per transaction (z) 25%
Savings per End User (x * y * z) $2,475
Number of users 215
Total savings through users (2) $5,32,125
Hardware Cost Savings
Average Precise/SQL’s effect on Annual Hardware Budget
$14,30,000
(x)
Effect on hardware cost if postponed by one year (x*30%)
$4,29,000
(y)
Probability of postponing hardware purchase by 3 months
60%
(z)
 Hardware cost saving (y*z*25%) (3) $64,350
Net savings (1+2+3) 7,37,494
10 DBA installations @ average cost of $ 20000 with 25%
$ 150,000
discount
ROI 491.66%

The Price Model

The price of Precise SQL ranges from $15,000 to $25000

. Already the ROI is very high and charging increasingly as 15% increase in list for
every additional CPU over a designated number would further increase it. Moreover,
it also varies with the performance of the machine it is being installed on.
Which again ranges from $12,500 to $ 50, 000 So Precise/SQL enjoys a high profit
market share with ROI touching almost 500%
Product INSIGHT is a product with full functionality and has no direct competition
for initial 1 year, if pitched right it can touch and enjoy a super-premium pricing
ranging from $20000 to $30000,followed by they can plan for recurring opex based
model.

ARNAB PRAMANIK
EPGCMM-11-10