Operationalization

For an Independent Software Vendor (ISV) pursuing an Azure strategy is ultimately a business decision. In order to make a decision, an ISV needs to address how to operationalize and monetize their strategy. TELLUS brings clarity by using the Business Model Canvas (Dr. Osterwalder: Business Model Generation), as one of the primary tools. This highly structured approach enables the client to analyze their business in a structured manner. Furthermore, the approach provides an opportunity to collaborate and discuss about the possible challenges that the ISV might have in its market penetration, resulting in stronger cohesion across the management team.

The Business Model Canvas is the operationalization of a company’s strategy by means of visualizing the underlying business model. The Business Model Canvas has been created for the purpose of business model innovation. Consumerization, digital convergence, social media mega trend, etc. are ripping traditional business models a part and industry is slow to react. One of the most visible examples of this is music industry and how digital downloads changed the game in a matter of months. The cloud will similarly impact software sales and distribution business models.

The Business Model Canvas enables us to explore different scenarios, evaluating their business logic. The canvas has the ability to simplify overall equation into nine core factors. If we agree that all core factors as equally important and we agree that the potential of the business model is equal to the multiplied outcome of the factors, then any one factor with a value of zero or near zero will dramatically impact the overall potential of the business model.

The same way that a value proposition is built up from the Charter, Unique Point of Differentiation and Supporting Argumentation, we need to explore all nine factors in depth establishing a hypothesis and providing proof for that hypothesis. The proof can be qualitative based on experience or quantitative based on mathematical argumentation. Ultimately there are no absolute truths, just statistical probabilities.

Monetization

Software ownership is evolving to software leasing. Subscription models are replacing perpetual licensing. Becoming a cloud solution vendor will impact cash flow, which in turn impacts sales incentives for direct and channel. An integral part of a board’s cloud decision making is having clarity how that decision will impact the company’s revenues and financial viability.

Invest for Excel is a software solution for capital budgeting and valuation that is used in over 800 organizations, 35 countries worldwide. The tool combines the knowledge of discounted cash flow methodology, IFRS reporting standards and best practices in capital budgeting. Invest for Excel is independent of industry or the size of business. It is used by small and medium businesses, public utilities and by private investors. But even more often it serves as the corporate standard selected by big multinational organizations for its investment planning process.

The software enables managers, investment analysts, controllers, investors and also production, marketing or engineer teams to:

• Prepare professional and complete cash flow models, profitability and sensitivity analysis
• Introduce transparency and comparability in analytical calculations
• Standardize investments analysis process in the whole organization, assuring that the best projects for realizations are selected