Turning Customers into Suppliers

Feed Wilson has asuggestion to those among us in the enetrprise software business:

The enterprise software business has been built on a simple business model – build a new software product and sell it to companies that will pay you for the increased efficiency that the software creates for them.

But its harder and harder to get companies to pay for software today. Theyve got a lot it in place already and they are paying more and more every year to maintain it. Plus theyve been burned by relying on small companies to deliver for them.

I dont believe that we have come anywhere close to addressing every problem that software and information technology can solve for businesses. But I am beginning to feel that we may be reaching a saturation point in terms of what enterprises can pay for software and information technology.

So what should we do about this? I think we should turn our customers into suppliers.

A technology that solves a fundamental business problem can be monetized in more ways than you might imagine at first blush. And the most obvious business model is often not the best one.

So when you are writing your next business plan, think long and hard who your best customer is and who your best supplier is. It might not be the ones you first think of.

He gives a good case stufy of Multex.

Another point to ponder: “Its not the obvious business model that often generates the most value. Its the company that figures out to get inside of this beautiful open system and expose hidden value that often wins the biggest.”

Published by

Rajesh Jain

An Entrepreneur based in Mumbai, India.