CENTRA SOFTWARE

Group 7
  Terry Archita   Saubhagya    Giri R Nikita Suman
(1811033)     (1811109)       (1811175)           (1811222)      (1811346) (1811426)
Industry Analysis - eLearning and eMeeting Industry
• Market Size (1999): $1.1 Billion
Buyer bargaining power
• CAGR (1999-2004): 58.5%  (LOW to MEDIUM) 
• Industry Type: New Technology Industry
• Industry Stage: 5-6 years old ('Early Adopters' stage)  Threat of new entry Industry rivalry Threat of substitutes
• Clear distinction between companies selling to (MEDIUM) (HIGH) (LOW)
universities and corporates
Supplier bargaining
Players in the Industry  power (LOW)

Content Providers Industry: Medium Attractiveness  

(Skillsoft,Click2Learn)
Firms providing
Delivery Platforms single sourced
(Centra,WebEx) systems (Oracle, Improving service Blocking customer’s
IBM)  support vital in the other departments-
Learning Management long-term increases switching
Systems (Saba,Docent) costs
Inference
Laterally expanding into different Consolidation in the Product specs of firms
business units of customers Industry- ‘majority’ difficult to meet-
Critical Success consumers prefer continuous
Factors Build capability to provide single- buying from a single improvements in
source solution to (early and late) source  product/service needed
‘majority’
Company Analysis •
•
R&D
Prominence among delivery
S •
Overview – Centra Software (1995) platform system- brand name
• Pioneer in eLearnings and eMeeetings
• eLearning – Estimated growth of
• Revenue doubled every year – no profits in 5yrs $11bn from $1.1bn in 5yrs
• Market leader in the sophisticated end of • 70% untapped eLearning market
delivery platform – 50% share of revenues • Global 2000 firms-
• Acquired MindLever 1800 to penetrate & disseminate
• Value proposition - cost, quality and speed 200 to disseminate
Lack of alignment - telesales
and field sales team
W
• Friction among strategy and
marketing
• Less support from SI
• Least success at partnering with
LMS vendors,
• Entry of single-source
eLearnings systems

O
Cost Analysis - Yr 2000
T
Product eMeeting Conference Symposium
Features Less Medium All
Total loss % of sales revenue 3% 19% 80%
$17.6mn Software license($'000) 201 3450 14836
ASP($'000) 365 98 28
Total revenue($'000) 566 3548 14864
Installed base of customer 28 48 398
Average Revenue per 20.21 73.91 37.34
customer($'000)

Centra’s strengths – R&D, brand value

Suffering loss in the growing industry due to SG&A expenses
Segmentation
SMALL FIRMS MEDIUM FIRMS LARGE FIRMS

140 100 200 Sophisticated

Annual Sales Annual Sales >$200M Global 2000 end of the
<$200M Not in Global 2000 list corporation market

e-Meeting Conference Symposium

Size – based segmentation  Implying varying propositions to different DMU structures

Centra’s key focus  larger end of spectrum (however, low level of diffusion (~10%))
Centra Sales Process
Field Sales Tele Sales Enterprise Sales Field Sales Tele Sales
Account type Revenue < $200
Global 2000 Global 2000
million
# of employees 25 2
Share of revenue 8% to 12% ($6 12% to 16% ($ 6
76% ($38 million)
million) million)
Product Conference & Quarterly salary 462,502  24,000
E-meeting All & commission per
Symposium
employee
Number of transactions 400 600 4
Revenue per Quarterly revenue 5,440,000  463,000
$95,000 $10,000 $1,500,000
transaction ($)
Sales strategy Company penetration Primary penetration E2E implementation
Source Alliance partners, Deal per employee 1.72 18
Tradeshows, web, direct
Cold calls Enquiry from client
mailing, email, Web
seminar, ads Conversion  12% 6%
Sales cycle 4 months Less than 4 months Almost a year ratio

The lack of synergy between Field Sales & Tele Sales is causing friction amongst employees
Tele Sales is effective relative to its current scope of operation
Technology Adoption Cycle

Kindle

Twitter Peek

Google Allo

Innovator Visionary Pragmatist Conservative Laggard

• Risk takers • Enthusiast • Risk Averse • Risk Averse • Unimpressed
• Lack of resources • Unmet needs • Seek products from • Resource rich • Ready to pay high price
• Fear of missing out • Bowling Alley strategy market leaders with • Bargain Hunters • High pre, during and post
• Unmet need • Minimum viable proven track record • Minimum viable sales engagement-hand
• Exploring new product • Return on Investment product for satisfying holding
products • High post-sales need
engagement
 Recommendations - Decisions
Chris Reed
Needs targets for penetrations and dissemination
Sales to Global 2000 only
Telesales – primary penetration tool;
Dissemination via field sales
Going forward:
Customers to focus on
Global 2000
• To focus on ‘sustaining
innovation’; tapped only
10% of the customers @
10% dissemination
Smaller customers
• Huge potential for increased
adoption of eMeetings
(‘hot market’)
How can Centra Software cross the CHASM?
Steve Lesser
Sales force to choose on dissemination/new account
Not lose focus on eMeetings (hot market)
<$200M – Telesales;
Global 2000 – Field Sales
Sales Strategy & Channels
• Simultaneous focus on
penetration and dissemination
• Field sales to focus on the
Global 2000 companies;
Telesales to handle the smaller
eMeetings customers
• Field Sales to focus on
increasing the dissemination in
each Global 2000 client
Key reasons for conflict:
• Lack of coordination between sales channels
• Ideological differences (independence of
sales force & customer selection)
Avoiding sales channels
conflict
• Better implementation of
leads direction system
• Increased monitoring by
Cathy Considine
• Enhanced coordination
between telesales and sales
force
Recommendations - Market Strategy

Value Proposition
Core Benefits:
• Savings in cost of training
• ASP + Software License service
• Faster field knowledge transfer to HQ
Add On Benefits:
• End-to-end provider of facilitating LMS
service
• Continuous innovation via R&D for
augmentation of value Innovators Visionaries Pragmatists Conservatives Laggards

Crossing the CHASM

• Perceived type of product has changed from functional to foundational
• Integrate across the value chain to provide content as well as LMS service - one stop solution
• Pragmatists make up majority of buying centers in tech companies - solve 100% of their problems for faster adoption
• Increased focus on dissemination within the Global 2000 companies to embed Centra throughout the organisation

Market leader among Global 2000  practicing induced strategic behavior;

Employing the tornado strategy where future buyers want to replicate the market leader
Thank you
Personal Interview
Q: Types of Services Delivered by the company
A: Content Developer, Delivery Platform, LMS, AR, VR etc.

Q: Type of Competition in the Industry

A: Very price sensitive industry as there is not much difference in the technology

Q: Through what sales channel you target your customers

A: For large Organization, Sales executive make personal visits while for the
smaller organization, Tele Sales people sow the seed and we take communication NAME: Vivek Kashyap
forward COMPANY:G-Cube
Solutions
Q: Who are the people involved in the buying decision process
ROLE: Senior Manager
A: Majorly CXOs are involved in the buying process
Business Development
Q: What kind of relationship exist in this industry
A:  The relationship works on a long-term basis because the efficient existing
supplier is always trusted for all the requirements compared to a new supplier
Personal Interview
Q: Is Tele-sales more effective or personal selling
A: Personal Selling has higher conversion rate compared to Tele-Sales, but ROI is
better in case of Tele-Sales because of less cost

Q:  Bundling services is more attractive or single service

A: Bundling the services is attractive as it reduced the cost of dealing and managing
various vendors and there are also compatibility issues.

Q: What if the organization is best in supplying only one type of service but as
NAME: Vivek Kashyap
you mentioned organization demand bundles. What should be the right strategy
COMPANY:G-Cube
for this organization
A: The organization should have in house development of the other services keeping
Solutions
in mind the target market and the scope of market share it could gain for good ROI ROLE: Senior Manager
Business Development
Q: Is Collaborating with other service providers best way to meet the bundling
demand of the organizations?
A: No it would not last long as there is always trust issues from the buyer side on
some or the other service provider so not every organization will go ahead with your
every partner which leads to lose of opportunity. In the short run it can be a solution
till the time you built in your in-house services.