Software One Inc. is taking advantage of big opportunities in the mid-market. The New Berlin-based software licensing firm determined that a computer reseller program could
give it the ability to triple its revenue and double its number of employees by 2008.
Currently, Software One is just shy of $50 million in annual revenue and has 37
employees, said Michael Quinn, president and owner of the company.
The company increased its revenue by 100 percent in 2005 and plans to increase an additional 80 percent in 2006. By 2008, Software One will be a $190 million company with 100 employees, Quinn said.
The company plans to grow through both its VARassist program division and its direct sales division, Quinn said.
Software One officially launched the VARassist program about a year and a half ago, but had been slowly developing it for several years, Quinn said. VARassist is a partnership program between Software One and the various value-added resellers (VAR) of the software publishers that the firm works with. Those publishers include Microsoft Corp., McAfee Inc., Symantec Corp., Veritas Software Corp., Adobe Systems Inc., Lotus Development Corp. and Novell Inc.
"We will take over the selling process and become an outsourced licensing partner for a solution provider," Quinn said.
Software One does not charge VARs to participate in the partner program, but receives a percentage of a sale, said Peter Ells, director of VARassist and Microsoft business development for Software One.
Software One is a large account reseller (LAR). Large account resellers are certified to sell enterprise software, which is more sophisticated than the software programs available to small and mid-sized businesses and home users, Quinn said.
Normally, LARs sell mainly to enterprise-sized companies and VARs sell to small and mid-sized businesses and home users, Quinn said.
Most LARs and VARs focus their sales on hardware, and neither know the detail involved in each kind of software nor the benefits of different licensing program choices, Quinn said.
Software One comes in to aid VARs by educating them on licensing programs and acting as an outsourced software and license provider, Quinn said. And because it is a LAR, Software One can sell enterprise software licenses to clients of VARs.
"It is a win, win, win situation," Quinn said. "The customer service is better because more attention is being paid to the licensing program than before. It is a win for the publishers because before they were selling products that were used but not licensed and it is a win for us."
When business owners are not aware of licensing regulations, they may install a software program on computers without a license and can receive a heavy fine if audited, Ells said.
At the same point, if business owners are not aware of licensing options, they may not be getting the most for their dollar, Ells said.
Part of the growth effort by Software One is fueled by the split focus of its two sales departments, Quinn said. The company has already seen positive results from dedicating one part of the office and employees to VARassist and one side and group of employees to direct sales.
In the last three years, Software One has had access to higher end licensing programs and more comprehensive programs after achieving LARs certification. Software One is one of 21 LARs in the country, Ells said.
"We can change the focus and look at the organization more holistically and see what is best for it," Quinn said. "In most cases, these organizations don’t have anyone to take the time to do this."
The VARassist program also helps Software One educate both customers and VARs to help them purchase the most comprehensive licensing plan for what they need now and in the future, Quinn said.
"What begins to happen is, as the customers begin to understand the concepts, what might have been simple will grow into something more sophisticated," Quinn said. "VARs traditionally don’t have the time or knowledge to focus on a software component."
Software One was established in 1985 when Quinn said he saw that the future was in computers. He was attracted to the software component of computer systems and was interested in helping consumers with the ongoing needs of a computer.
"This is a market that is under licensed or inappropriately licensed," he said. "They do not have the experience to know it and rely on outside providers who are not informed."
Licensing used to come with each CD or disk that contained a software program but now customers can purchase a number of licenses and only receive one copy of a software program.
When companies can install the program on multiple computers, the owners of the license agreements are on their honor to adhere to it, Ells said.
By the same token, licensing agreements have become more complicated, and deciding which one to purchase can be difficult if the individual is not informed, Ells said.
The VARassist program will help VARs keep their customers informed by giving them the best license agreement for them that will give them the most benefits, Ells said.
"VARs can save their customers money if they are getting in the right agreement and the customers will have a higher level of satisfaction with what they are purchasing," Ells said.
"We are looking forward to VARassist, there are a large number of growth opportunities," Quinn said. "It allows us to reach a market of customers who traditionally use outside providers. Solution providers never went to an account reseller so it opens up a huge horizon for them."
As part of the growth plan, Software One will hire 23 employees in 2006, 20 employees in 2007 and 20 employees in 2008, Quinn said.
"We are growing significantly," Ells said. "We continue to add partners that want the increase in value for their customer base. They do not view licensing as a commodity, but as a tool."
Software Licensing Myths
There are many common misconceptions among consumers and business owners about what software licensing means and the extent to which it should be used. Software One clears up some common myths.
MYTH: The license is the same whether a company buys software from the original equipment manufacturer (when it comes installed on a computer), with a retail box product from a local retailer or by volume licensing through a reseller.
FACT: The licenses are not the same. How a company purchases software makes a difference in the amount of money spent, how much the owner owns and the ease of managing the licensing.
MYTH: A company has to have a large number of computers to qualify for volume licensing.
FACT: Volume licensing for businesses is available to customers with as few as two computers.
MYTH: When a company purchases a license, it owns the software.
FACT: A company purchases the right to use the software according to the terms of the license agreement purchased.
MYTH: Once a license is purchased it can not be changed.
FACT: By adding software assurance to a qualifying original equipment manufacturer or retail box software within 90 days of purchase, licenses can be converted to full-volume license rights.
MYTH: Software assurance is only for upgrades.
FACT: Depending on the volume license agreement, with software assurance a company has access to a variety of rights to include home use rights, eLearning, and more.
Software One Inc.
Location: 2665 S. Moorland Road, New Berlin
Annual revenue: $50 million
Employees: 37
President: Michael Quinn
Web Site: www.softwareone.com
Small Business Times, December 9, 2005, Milwaukee, WI
