Monday, November 24, 2008

Reality sinks in for Authoria and its customers

An "I told you so" is in order here, as Authoria last Friday announced the replacement of longtime CEO Tod Loofburrow, with former GEAC alumnus (like his Bedford brethren) James McDevitt. If one takes a moment to review my post on 3 October (, you'll see that I was disagreeing with at least a couple of industry analysts about the true nature and effect of the Bedford Authoria acquisition. As the Authoria press release states, Mr. McDevitt has "...a proven track record of developing corporate strategies that have significantly enhanced efficiency, profitability..." and so forth.

Now that reality is setting in for Authoria and its customers, it is time to have another look at what this really means for customers. My opinions are contained in my previous post, but I am sure there are other ways of looking at it.


Anonymous said...

A company in "let's make profits" mode may be better than one in growth mode for current customers.

A software company that is trying to grow is often working on things to win the next customer at the cost of taking care of the last one. There's a lot of spend in sales and marketing that does nothing for current customers, and even the engineering work can be a mixed bag.

It can be a rude wakeup for some high-maintenance customers as management realizes they are costing the company money. If the company closed a lot of deals on prices well below current market levels, then some adjustment will occur.

In any case a company which decides to shift off a high-growth, burn rate trajectory must by definition increase its focus on keeping and maximizing the value of its current clients. So I don't see them getting stabbed in the back, at least not across the board.

The loss is to the market and new buyers, in the form of reduced price and feature competition, which conversely increases the viability of other vendors as well. And this market is not exactly afflicted with an excess of viability.

TechSphinx said...

Amen. But, do you think the effect is really forcing a redefinition of what should make a viable vendor? Clearly, vendors have to invest in new capabilities to drive new sales, but also focus on making existing clients successful. In the hype-driven high growth model, the emphasis has been overwhelmingly biased toward new features and the next cool thing.

It is particularly unfortunate that buying organisations fall for the HCM/Talent hype all too much, and often seem genetically incapable divining which vendors actually deliver the best mix of customer focus vs. innovation.

Even more unfortunate is the analyst focus on hype, as opposed to current reality. There is nothing wrong with that in itself, because discussing trends is worthwhile and interesting, but without proper business diligence on the part of buyers, the proper balance is rarely achieved. This leaves clients making and dealing with bad decisions, and vendors spending on the wrong things.

These are all more reasons I am obsessed with the need for proper business diligence for buying organisations.

Anonymous said...

My feeling is that the difference between customers is ten times greater than the difference between vendors.

I am sure there are some companies which would fail miserably with product X, or do vastly better with product Y, but these are the exception. Most would do just fine with product from just about any decent provider, so long as they take the trouble to learn to use it and develop discipline around that.

If you gather a bunch of serious amateur photographers together, you'll more likely than not find them talking about equipment, comparing test measurements, etc. Gather a bunch of professionals, and you'll just as likely hear them talk about working with models, composition, lighting. It's not that they don't care about tools, it's just that they realize the camera doesn't make the picture.

But this is the sort of stuff no one really wants to hear. "Proper business diligence" usually translates as 'RFP page count' and that is where the feature-driven game really gets into gear. All vendors will converge on answering "Yes - Standard Functionality" to every request on 75% of RFPs. Everyone knows that the RFP isn't where the real decision gets made but if you have significantly more NOs than the other guys, you're out, so that aspect of the selection process is very real.

This is of course followed by the sales demo which is like seeing Ron Popeil pull a crispy golden turkey out of his magic oven on a TV infomercial. Sales engineers are SE's because they know how to make it look easy.

I suspect these tendencies are sufficiently rooted in us culturally-slash-neurologically that they are not likely to change significantly within anyone's professional lifetime.