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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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© Copyright 2006 Cambashi Ltd
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