4/27/15. Documentum. Jenna Berkenkamp Daniel Graifman Austin. Austin Ray. The Decision. *Accept the $300,0000 Marsh and McLennan deal

Transcription

1 Documentum Jenna Berkenkamp Daniel Graifman Austin. Austin Ray The Decision *Accept the $300,0000 Marsh and McLennan deal 1

2 VIE Analysis Vision Internal External Enable large corporations (that are vital to society s functioning) to increase efficiency by managing and organizing their unstructured information Strengths: Great management team and board Strong, proven solution (w/ Boeing, Syntex) Funding ($4M - Xerox, $5.8M - VCs) Weaknesses: Cash burn rate > $1million per quarter $4 million Xerox lifeline almost gone Won t reach profitability at current sales trajectory Revenue is 40% of projected Costs (as % of revenue) are ~2x higher than projected Strengths: Large market ($555M in 1994) Rapidly growing market (projected to more than double by 1997) Weaknesses: Lots of capable competitors Manual file management still widely used - difficult to displace Horizontal vs Vertical 1. Happy sales staff 2. Existing precedent 3. Leverage Xerox resources 1. Have to battle entrenched, capable competitors 2. IT managers likely not receptive to this paradigm-busting product 2

3 Horizontal vs Vertical 1. Allows Documentum to outmaneuver competitors and dominate an otherwise unavailable market. Compensates for lack of resources 2. Gets around paradigm-busting problem by going around IT managers 3. Core tech enables swift expansion 1. Adams & funders not happy 2. $3M sales pipeline in jeopardy 3. Have to spread marketing/r&d resources then (hori + vert divisions) 4. Time-intensive strategy + high cash burn rate = could go bankrupt Which Vertical Telecom Insurance? Chemical Pharma Aerospace 3

4 Aircraft Maintenance Documentation Total Moore Rating: Foothold in the industry 2. Verified problem-solution match 3. Highest total IT budget 4. Rated highly overall on Moore scale 1. Difficulty finding customers 2. Partnership required Chemical Regulation Management Total Moore Rating: High margins 2. Compelling reason to buy 1. Government regulation 2. Partner required (3rd party software) 3. Low budget for IT 4

5 Telecom Manufacturing Total Moore Rating: Big IT spenders 2. Invest in innovative tech 3. No partnering necessary 1. Possible allegiance to traditional modes of operation Pharmaceutical NDA Total Moore Rating: Foothold in the industry 2. Well defined need 1. Conservative in adopting new IT 2. Government regulation of tech 3. Partnering required 4. Pharma companies clustered on East coast and in Europe 5. Low # of companies (11) 5

6 Insurance Policy Documentation Total Moore Rating: Gateway to financial services industry 2. High interest in using innovative tech 1. No customer success story yet 2. No systems integration partner yet 3. Reasonable fit Which Vertical Telecom Insurance? Chemical Pharma Aerospace 6

7 The Deal $300K deal with Marsh & McLennan (NY-based insurance company) o Got $1M from Syntex deal o Got $250K from Boeing deal Potential to be million-dollar deal Insurance must be first target application Additional functionality must be developed Would let Documentum hit 50% of its FY 1993 plan Closes existing pipeline and might make salespeople quit Making the Decision You do not have to pick the optimal beachhead to be successful. What you must do is win the beachhead you have picked. - Geoffrey Moore We ve worked with Moore to ready the troops, and we ve just been handed a solid invasion plan. We should attack now. 7

8 Plan of Attack 1. Take the deal. 2. Get systems integration partner. 3. If possible, focus first on reasonable fit applications and dominate them. 4. If not possible, get temporary technology partner for M&M deal. 5. Meanwhile, develop high-volume, imaging technology in-house. 6. Dominate entire Insurance Policy Documentation market. 7. Eventually, bring systems-integration in-house. 8. Expand to the Financial Services Industry. 8