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Cambashi ezine

Jun 2006 issue
-PLM Universe
-Everyone likes sausages..

Jan 2006 issue
-New Year's Resolutions
-Biometric Technologies

Sep 2005 issue
-The markets in China
Profitable R&D

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e-Xpertise in Industry June 2006 ezine print version

 

 

Hot Topic: Everyone likes sausages…

Geoffrey More (after Bismarck) once joked that market numbers are like sausages: No-one who consumes them wants to dwell too closely on their content! But behind this flippancy lies a certain truth: most market numbers contain a certain laxness in their definition.

For instance "installed base" figures are often bandied about by companies and press alike as though they were cast in stone, yet even this seemingly simple definition can be misleading. At an industry event one analyst was prompted to exclaim that "some companies seem to count installed base differently to others!" Is that the installed base figure for cumulative sales; or those in use; on the current version; on maintenance; or on subscription? All these different definitions would produce widely differing numbers - so which is the correct one, or rather, which one does the vendor use?

That may depend upon the role of the individual within the company. The PR department probably prefers the cumulative total; the bigger the number, the more impressive it will sound. We have all seen the press releases proclaiming, "n thousandth copy sold".

The sales team requires much more precise market data to plan sales campaigns, set targets and project revenue streams. Installed base in these terms could be seen as systems actually in use and a product's share of the total in use, rather than cumulative totals.

The marketing team also likes these definitions for installed base. They will however, require an additional view of the market in terms of the potential in a particular sector or for a particular product; installed base and market share are then viewed from different angles, especially when penetration and saturation are an issue.

So there are a number of potential uses for a simple "installed base" figure. At Cambashi, we understand these differences and tailor the data format according to the requirements of the final users, rather than hand out an off the shelf report. Everyone likes sausages; the trick is to get the right blend!


Nick Ballard

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Also in this issue . . . .

Feature Article:

The PLM Universe: Nick Ballard gives his latest view of the Engineering Applications market

Book Review: Competing for the Future: by Gary Hamel and C K Prahalad is reviewed by Ian Wallace

Cambashi researches best practice and assists IT suppliers in best practice implementation. For more information on Cambashi services please email info@cambashi.com

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