Product transformation.

Value creation

We transform hardware and software product portfolios, with supporting services and infrastructure, to maximise shareholder value and valuation on exit.

We focus on increasing customer lifetime value, average revenue per user and annual or monthly recurring revenues, through distinct transformations:

SaaS carve-out.
Enterprise technology to SaaS conversion.
Portfolio extension & enhancement – combining hardware, software and services from multiple companies into single market offerings.
Portfolio rationalisation.
Software virtualisation of hardware.

SaaS carve-out

When carve-outs can generate value

SaaS product suites are designed to address a large part of the customer’s value chain in order to increase customer switching costs and make initial and incremental adoption more attractive.

Development of the portfolio requires trade-offs between pursuing commercial opportunities of individual products (for individual parts of the customer’s value chain) against the utility and ROI of the overall portfolio. The picture is seldom clear as it is difficult to ascribe value, particularly revenue creation, to some parts of the customer value chain. Hence the prioritisation of product feature development is seldom uniform, or consistent, across SaaS product suites.

Carving out sets of product features into stand-alone products allows a company to develop a product that is significantly more focused on a specific set of customer needs, for which a market premium can be charged. This increases average revenue per user and, because of increased product-market-fit, it also increases annual recurring revenues. If the product is operated as a stand-alone business unit, it can often be positioned to increase valuation on exit.

Assets we deliver

ROI assessment (revenue forecast, cost to implement, cost to operate).
Product strategy.
Product roadmap.
Pricing models.
Infrastructure transformation.
Approach to implementation.

SaaS carve-out

Enterprise technology to SaaS conversion

Drivers of SaaS conversion

Some companies have developed great proprietary software for internal use, which can be extended into a SaaS offering that generates direct revenues and also indirectly increases accrual of existing revenue streams. Due to the penetration of large-scale enterprise SaaS suites which themselves were once enterprise or deck-top solutions, such opportunities have become quite rare and now tend to be the preserve of niche markets.

Thus the main driver of converting enterprise software into SaaS has become the need to redevelop legacy software that costs too much to maintain and which is increasingly difficult to enhance due to out of date architecture and technologies.

If the internal business case is robust then the additional cost of creating or integrating SaaS functionality, such as billing management, is often minimal. If the market exists, is obtainable and serviceable, it makes sense to increase the investment to transform from cost-based software into a revenue-generating products.

The ROI assessment can be based on achieving a net-positive return within the investment period or on proving revenue potential to increase valuation on exit.

Assets we deliver

ROI assessment (cost to implement and operate, achievable revenues and revenue potential).
Product strategies.
Product roadmaps.
Pricing models.
Infrastructure transformation.
Skills for implementation.
Approach to implementation.
Go to market strategy.

Enterprise to SaaS

Portfolio rationalisation

Criteria for retirement

The main purpose of rationalising a portfolio of products is usually to reduce group-wide costs of development and operation. Sometimes rationalisation can also simplify the value proposition and be used to grow market share.

Rationalisation (a product 'shoot-out') has two core components: retiring products from the market and extending products to replace coverage from retired products.

When built organically, large product portfolios typically have legacy products that still generate some revenues but are relatively capital-intensive to maintain. When built through acquisition, large product portfolios usually have duplicate product features and entire products deployed in separate geographic markets. Regardless of origin, almost all products will have an immediate tactical value, such as generating revenue, and many products also have a strategic value such as being feeders of demand for other higher-revenue products.

Hence the criteria for retirement are specific to the wider investment thesis, corporate strategy and market characteristics. But they also need to consider operational practicalities and contractual commitments – some products are simply too difficult to withdraw from the market.

Assets we deliver

Rationalisation objectives and metrics.
ROI assessment (cost to implement, revenue risk).
Rationalisation map (products to retire and timing of withdrawal).
List of ring-fenced products.
Migration plans for product features.
Product retirement plans.
Assessment of contractual and customer obligations.
Customer outreach plans.