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Business Overview & Proposed Strategy

Business Overview & Proposed Strategy. Bruce Cardinal Gale Group Corporate Division May 21, 1999. Confidential and Proprietary. Do Not Distribute. Agenda. Corporate Division Overview ComputerSelect Results The IT Market Opportunity Sierra Concept Overview Sierra Plan Next Steps.

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Business Overview & Proposed Strategy

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  1. Business Overview & Proposed Strategy Bruce Cardinal Gale Group Corporate Division May 21, 1999 Confidential and Proprietary. Do Not Distribute.

  2. Agenda Corporate Division Overview ComputerSelect Results The IT Market Opportunity Sierra Concept Overview Sierra Plan Next Steps

  3. Corporate Division Why IT Vertical? Leverages current assets • IT customer base • ComputerSelect brand • Product and company content • Market dynamics attractive • Fastest growing U.S. industry • High rate of change increases demand for information • High risks associated with wrong decisions • New opportunity for Thomson

  4. ComputerSelect Changes in Customer Base 9,710 8,593 6,178 4,781 4,391 • The number of customers is dropping as we target higher dollar accounts and spend less effort on smaller CD sales

  5. Corporate Division Lines of Business $40 Million InSite 18% ComputerSelect 25% • The Gale Corporate Division generated revenues of $40 million in 1998 Percentage of TotalRevenues Resellers 57%

  6. ComputerSelect Changes in Revenue Base • Loss of CS CD customers is major reason for revenue decline • CS Web is growing at an increasing rate

  7. ComputerSelect Sales Trends • Average revenue per customer is rising as the mix shifts to more web sales

  8. ComputerSelect Breakdown of CS Web Accounts • Majority of CS Web sales are small installations . . .1 to 3 concurrent users 1 Concurrent $2,995 Standalone $1,550 6 or More Concurrent $14,395+ 3 Concurrent $7,595

  9. The IT Market Opportunity Target Market Size Source: OES 1996 Employment Statistics Outsell Jan. 1999

  10. The IT Market Opportunity Research and Advisory Services

  11. The IT Market Opportunity Major IT Publications 1CMP acquired by Miller-Freeman in April 1999

  12. Project Sierra Content Sources • New Content • Customer Experience • Market Research Panel (IntelliQuest) • Expert Opinion • Licensed content (Giga or Gartner) • Training Resource Center • Original content • Links to CBT sites and Amazon.com • Bug Reports and Alerts • Original content • Cambridge/IT Group support • Web Search Results • Aeneid technology • Integration of Indices • Computer Database and DataSources • Outside experts (Giga/Gartner) • Expanded journal coverage (80+) Existing Content • Computer periodicals (100+) • DataSources product data • Indexing and term mapping from Computer Periodicals Database and DataSources

  13. Project Sierra Economic Model 1Assumes 4% penetration of IT user market

  14. Project Sierra Next Steps • Announce InSite transferMay 24 • Re-focus sales force on ComputerSelect • Present MBDI June 7 • Further validate market opportunityJune 15 • Market analysis and research • ComputerSelect customer feedback • OCTO and Thomson CIOs • Verify cost modelJune 30 • Negotiate panel and IT analyst deals • Clarify internal editorial/development costs • Negotiate ZDNet partnership June 30 • Commence implementationJune 30 • Create phased development plan • Implement Phase 1

  15. Technology Purchasing Process New Technology needed by organization

  16. Technology Purchasing Process New Technology needed by organization Research and identify technology and vendor options Research using third party data Search Web for vendor sites and user groups Network with peers

  17. Technology Purchasing Process New Technology needed by organization Research and identify technology and vendor options Create “short” list (3 - 5 Vendors) Conduct research on vendors Compare products (specs, integration) Research cost-of-ownership issues Evaluate aftersale support

  18. Technology Purchasing Process New Technology needed by organization Research and identify technology and vendor options Create “short” list (3 - 5 Vendors) Selectvendor and deploy technology Obtain customer references Look for bug information Refine cost-of-installation model Investigate and purchase training

  19. Technology Purchasing Process New Technology needed by organization Research and identify technology and vendor options Research and identify technology and vendor options Maintain new technology Create “short” list (3 - 5 Vendors) Create “short” list (3 - 5 Vendors) Selectvendor and deploy technology Selectvendor and deploy technology Follow developments at vendor Monitor bug alerts Evaluate potential upgrades Obtain ongoing training

  20. Technology Purchasing Process New Technology needed by organization Research and identify technology and vendor options Maintain new technology PROJECT SIERRA Create “short” list (3 - 5 Vendors) Selectvendor and deploy technology

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